'Student loans have been the bane of my existence'
I read this article, How a year without student loan payments changed people’s lives. I then got to thinking how did it affect my own life. I then realized that as someone who lives abroad and had to stress monthly to send a payment via international wire transfer, my life did change. For the better.
I got a sense of what debt freedom was like, as it is my only form of debt.
1. Finally build my 6 month emergency fund
I had been trying to reach 6 months on my emergency fund and with the student loan payment moratorium, I was able to several months ahead of schedule.
2. Reached positive net worth
Net worth is an indicator of financial health. you can read more on how to calculate that here.
It essentially gives you a look into where you are in your finances. However, this is only one of the many tests to check this. These tend to be separated by country, as some rely on a credit system, and others rely on a more cash system. This is neither, it is divided by assets vs. debts. When you add up all of your assets and debts and subtract them from one another, that tells you your net worth.
Assets – Debts = Net Worth
I had been working on this for a while, but I was able to invest more this year than I ever could. For the first time, I felt my ‘little’ income was actually livable. You can read more on my net worth journey here.
3. Able to change my living situation
At the beginning of the year I was in a dorm, which worked well before the pandemic. After the pandemic it became difficult, we could barely use the kitchen because it would be 9 of us. The cleaning schedule was not being adhered to, and those that were sick were still out and about socializing in the common areas.
I had had it when I walked by the common area to go on a walk and I heard coughing coming from the kitchen.
At that moment I knew it was time to move into my own apartment, so I did. I was able to afford the move because of the savings I built up. Fortunately, I did not need a deposit, so I only had to cover the overlap of the two apartments rent.
4. I became less anxious
I do not talk about mental health but most people have some level of anxiety. Which is generally healthy and nothing to worry about. However, my student loans have been the bane of my existence since I have had to start paying them. I realized I had to put so many things on hold like purchasing a home, having children, etc. Once I moved abroad I realized that I needed to figure out how to pay it from abroad, which created some logistical issues that I was able to overcome. However, it was not easy.
Pausing the payments allowed me to not have to worry about this every month, putting together a payment to send via international transfer, have it post to my account in the U.S. and then send it to the student loan company. I would have to check back on this during the week as I began the process. After a while it became the norm but putting it on pause gave me that time back.
I would love to hear how it changed your life
If you would like to be interviewed, I have set up a Google Doc with some questions. See below.