I look at social media and constantly say to myself, “How the f#$@ do these people afford that!?” I think comparing my situation to friends from high school and college is such a toxic thing to do, but I can’t help it sometimes. I am always left wondering how people, who are the same age as me, are affording cruises, tropical vacations, new homes, new cars, fancy gym memberships.
Deciding to be a teacher is not something I did for the money, thats for sure. My husband definitely didn’t choose to join the military for the lavish lifestyle either. We absolutely understand that our career choices mean we will not be “living the high life” any time soon, but we chose these careers out of love for kids and learning (me) and our country (him). Unfortunately, as a first-generation college student (whose parents had zero understanding of higher education let alone how to pay for it – I don’t blame them at all), I was left with a ridiculous amount of student loan debt. No one ever explained to me what it meant to take out a student loan. Sure, I obviously knew I had to pay it back, but it was never broken down for me. Had someone explained that the $25,000 I chose to spend on my first year of college at a big, out of state university would cost me over $60,000 by the time I was 30, I never would have done it. I’m sure there are people reading this thinking, “Wow, if you didn’t know that, you must be some kind of stupid!” You’re right. I was. Part of me regrets my college education every single day of my life, however, I could not be a teacher without it. I chose to go to graduate school and that added to my student loans, because in my career field, the only way to climb the pay scale is to get an advanced degree. So here I am, over $100k in student loan debt, not making much, married to a man not making much. But to me, getting to hang out with kids all day, show them awesome things about science, teach them how to express themselves through writing and art, find interest in great novels, crunch numbers and relate it to real life, and have my summers off..that is totally worth it.
So what does all of this mean? Well, I have had to learn how to “make it work” so to speak. I am by no means an expert, and I am definitely not debt free right now, but I am learning to make strides here and there. Here are my tips for low-income millennials (like myself) who feel crushed by crippling student loan, credit card, or medical bill debt:
Take Social Media Breaks
I think the best and worst thing about social media, is that it only shows someone’s highlight reel. We all like to post when we are at our very best, but that often leaves us feeling down and out when we see everyone else living the life we wish we had…or so we think. I take breaks from social media quite frequently. No, not the kind of breaks where I make some kind of big, dramatic status explaining my exit. I simply delete the app for a few days, weeks, whatever. If it isn’t there, I don’t think about it. Taking a step away from scrolling through my timeline and getting lost in jealousy and admiration of friends (and strangers!) is absolutely necessary sometimes.
Stop Using Credit Cards…Sort Of
Like so many other people, we have used our credit cards to bail us out more times than I can think of. It is so easy to swipe and not think about it, especially when you’re young. I got my first credit card at 18 years old, I was unemployed, and had a $2,000 line of credit. Who thought that was a good idea!? As we work to get those cards paid off, I stick them in a drawer and try to forget about them. Sure, its tempting when there is a HUGE sale at your favorite store and you know that money is sitting there, but it is NOT worth the financial burden it creates a month later.
I started poking around on Credit Karma back when it first became “a thing” about 6 years ago. I learned how store only credit cards don’t affect your score as much as major cards like Visa or Master Card. I also learned that, believe it or not, having more accounts is better than no accounts and keeping them for several years is important (sometimes its better not to cancel a card). One thing that blew my mind…I used the tool to estimate my credit score if I paid off all of my debt (it wasn’t much at the time) and my score went down! How is this possible? Carrying a small debt (30% or less of your limit) and consistently paying it off proves “credit worthiness” which is something you need to keep a high score. Installment loans (like personal, car, and student loans) have less negative impact than credit cards do. Also, understanding that credit checks can hurt your score is important. I went in to a car dealership just to price out a car and shop around…BIG MISTAKE. The dealership made 6 hard pulls on my credit score, causing it to go down quite a bit. Those pulls sit on your account for a few years. Better choice? Go to your bank and get pre-approved.
It is all a game. The best way I have found to increase my score (besides paying it off!) is to pay down major cards before store cards and before making big payments on loans, keep accounts open once they’re paid off (unless they have high interest rates or annual fees), and use one or two cards for small purchases I have cash for, such as gas or groceries, and immediately paying it off. Sounds like a no brainer to some, but being young and making financial mistakes early has caused me to dig a bit deeper into the credit score game.
Rewards & Perks Cards
Right now, I am not really in the position to open another credit card, but I have been shopping around looking for the right rewards card. Living across the country from our family means we fly A LOT. I have been looking into cards that offer airline miles. The tricky part is looking for ones that avoid black out dates (we travel during high traffic times like holidays), don’t have crazy annual fees, and still have low interest rates. I’m still on the hunt for the best deal. I love my Amazon credit card! I earn points with every purchase that turn into cash back on Amazon purchases. Nothing is better than going to check out and seeing a “$13.58” reward I can use! My Old Navy/Gap credit card works similarly, awarding me after purchases with cash off coupons. If you are not interested in yet another credit card (trust me, I get it), the Target Red Debit card is fabulous! You get all the same perks, such as 5% off and FREE shipping, without the stress of a credit card. Be warned…sometimes it takes a day (or more) for your purchases to actually come out of your bank account, so watch carefully.
Not going to lie, I watch “Extreme Couponing” and it brings me life. I WISH I could dumpster dive for coupon inserts, have family and friends come over to help cut them out, shop around for store deals, sit down and crunch the numbers, and leave with a $500 haul of groceries for 12 cents…but its not going to happen. I work full time, have a crazy two year old, and honestly, do not have the brain power. I can, however, scroll through an app and digitally clip coupons! Many of the stores we frequently shop at have apps that tie coupons to your store rewards card. Fred Meyer (or Kroger), Safeway, Walgreens, and Target are my go to apps (even though Target is RUDE and only allows Cartwheel offers in store) In all of these apps, you can check the weekly store circular for sales and clip coupons (store and manufacturer) to use right away. I have been known to park my cart in the bakery section, shove a cookie in my kid’s hand, and add coupons before I check out. Believe it or not, I have saved quite a bit. Some people say, “Yea but its like 25 cents here or there” which is true, but it adds up quickly. I think my greatest “haul” thus far included both paper coupons from the Sunday paper and digital coupons on my Fred Meyer app, which saved us over $30 in one shopping trip! That is a win for me!
Cashback or Scam?
I have always thought those cash back apps and websites were a scam…until a friend of mine introduced me to Ebates. Living on an island means we are limited in the stores we have around us. Sure, I could drive 45 minutes to an hour to get to more stores, but who wants to waste the time or gas doing it? So yes, online shopping is my jam and Ebates has already earned me over $20 in just one week on purchases I had already planned on making! All you have to do (after you make your account) is go to the Ebates website, or open the Ebates app, then shop your favorite stores through their site. You will see what percent cash back you can earn, for example – Walmart was 10% cash back for me this week. They even show coupon and promo codes for the stores you are shopping at. How awesome is that? A new discovery is that you can use Ebates in store as well. This may be a deal breaker for some people, but if you add your card info, Ebates will automatically track purchases you make in store (be sure to swipe as credit even if it is a debit card!) and give you cash back. Some people may find this sketchy, but if you follow my advice on using credit cards for cash purchases, then the risk is low if your information were to be compromised. Your cash back can be sent to you via check or deposited right into your PayPal account! There are a lot of other cash back options, but this has been the easiest and most legitimate I have found so far. Use my referral link to get started >>> Ebates
Check Your Bank Statements
My bank (Navy Federal) offers this cool feature online where you can see exactly where your money is being spent each month. Purchases are broken down into categories such as entertainment, household, clothing, etc. You can create your budget for each category and set an alert when you approach and/or exceed it. This is a super simple way to start budgeting!
Student Loan Repayment Plans
I was SHOCKED to hear that a friend of mine was not taking advantage of income based repayment on her student loans. Depending on how much debt you have, this may be the best option for you. If you have a relatively small debt, then your minimum payment is probably small (since it is spread out over a ridiculous number of years), in which case making a larger payment to pay off your loan faster is a much better idea. When you are tens to a hundred thousand dollars in debt, with a minimum payment equivalent to a mortgage, you might not be able to afford it standard repayment. You can always make more than your minimum payment even on income based repayment plans, but this can be a life saver for anyone going through unemployment or a rough financial patch. If you are a public service employee (such as a teacher, nurse, etc.) then Public Service Loan Forgiveness allows your loans to be paid off after 10 years (120 payments) on time and in full. Here is the great part, income based repayment is accepted, so why pay $700 a month when you could pay $350? Paying more when it will be forgiven anyway is pointless and actually could throw off your 120 payments. I am not sure about new legislature and if this program is being stopped for current or future borrowers, but for those who took out loans from 2007 through 2017, you should still qualify. I was just introduced to this forgiveness plan recently and am working on my applications now. There are other forgiveness plans, you just have to dig deep and find them! Also, watch out for “Student Loan Consolidation Loans” that are not suggested through student aid.gov. The reason being, if you consolidate and refinance through some of these companies, you now have turned your federal debt into private debt, which disqualifies you from federal student loan forgiveness programs.
There is no simple fix. I am certainly not a billboard for a debt free life, but I am working on it. I mean, we are young, made mistakes, made moves out of necessity, and now are working our way out of it. It is life. My goal from this was to share some of the easier ways to tackle some of the overwhelming burdens of financial stress. What are some other ways you pinch pennies and make financial moves?