Some of the greatest advice we were given, upon getting married, was to eliminate all debt in our life. We walked into our marriage with quite a bit of debt when we added up all of our student loans, and car loans. Inspired with the mission to eliminate our debt, we decided to tackle debt that we thought we could pay off first --- our student loans. It was a manageable sum and therefore we thought that if we just saved as much as possible, within several months we could eliminate it completely.
We spend the next several months steadily paying the amounts due on our other debts, but focusing large amounts of cash toward the student loan debts that we had. Well, within the year we smiled when we realized that we had completely paid it off! What an accomplishment – we eliminated our student loans completely!
It wasn’t until tax-time came around that we realized the foolish error that we had made! Not only would we have been able to deduct a portion of the interest from our student loans, but our student loans carried the smallest interest rate of ALL of our loans! What a terrible mistake! We should have been putting all of that money toward our loan with the highest interest rate attached – our car!
It was then that we learned an extremely valuable lesson – one that I would keep with me from that point forward. The lesson was to be aware of the details of our loans! If I would have just taken a few minutes to read the loan terms, I would have quickly noticed that the interest rate was smaller on our student loans, and therefore would have saved our family hundreds in the long run!
So that’s my advice for you! This week, take a close look at your debt and pay careful attention to all of the details of your loans! Notice the interest rates, annual fees, and any other important details. Then, set them side-by-side and determine which ones to pay off first! Then, put your head to the ground, and glue your wallet closed and pay them off! You can do it!
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