In this 2 Minute Q&A Tuesday, we’re going over how to shift your mindset when it comes to student loan debt.
Student Loan Debt is Overwhelming
Paying off $30K in student loans can feel extremely overwhelming on its own. But, when society makes us feel like our student loan debt is non-acceptable it can feel like added stress. I know this because I also felt this pressure to get out of student loan debt. It’s very apparent that there is a huge student loan crisis. With the average graduate having around $35K in student loans and interest rates around 2-6%. But the criticism that graduates get is only felt once they graduate, not before they get into the debt.
A Car Loan is Doable, but Debt isn’t?
This makes me question why society and the media have given student loans a scarlet A? While other debt like car loans a pass? With the average new car loan being $32k with interest rates around 2-5% and a repayment date of 5-6 years. Why are car loans so acceptable while student loans are dashed? If we use the same strategy of how we pay off car loans to student loans does that make it any better? Not really.
Mind Over Money
For most people, just changing how they view their debt can make a big difference. Ask yourself, if you’re able to find the money to pay off a new car loan in 5 years. Then what is stopping you from approaching your student loans the same way? We find the money for car notes, gas, maintenance, car insurance, and car registration. But we mentally can’t overcome paying off our student loans within 5-10 years. This is the mindset shift that allows you to take control of your debt instead of feeling overwhelmed.
The truth about personal finance is that it’s 80% mental and 20% taking action and number crunching. When we open ourselves up to seeing our finances in a different light, we’re able to gain our confidence back. This is one of the biggest and most difficult steps when it comes to managing your finances.
This is a similar approach that my family took to pay off over $99K in debt in 5 years. It wasn’t easy, but looking at our debt in a more positive light allowed us to change our mindset about debt and our finances.
I challenge you to take a look at your debt and financial goals like a car loan. If you can pay off a car plus all it’s hidden costs in 5-6 years. Just imagine what else you can do?