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  • Getting Out Of The Millennial Mountain Of Debt

    So... this post is not pinup related, but I think it could help a lot of people, so I still want to share it on here! I put my business, Pink Bow City, on hold for the last few years, because as soon as I graduated from college I felt discouraged trying to launch a business on my own with gigantic student loans hovering over my shoulder. I felt stressed out, unwilling to take more financial risks, and trapped. I was trying to live out my dreams in California, but I decided to put everything on hold and move back to my hometown of Minneapolis to save money and get a "normal" 9-5 gig.

    Through my immense determination to get myself into a better place financially, I have buckled up and built myself a very detailed budget that I follow to be able to make payments on my loans and credit cards. I have tried many apps and websites that claim they will help you budget, but I find them to be intrusive, annoying, and hard to follow. The best thing I have done is made a very simple Google Sheet, which is free and easy to use and access across any device. I have this thing saved to my desktop, bookmarked & saved on the home screen of my phone to keep me on track.

    If you're not a math nerd like me, you might feel lost setting up a spreadsheet. Here is the template I use, you can modify it however you see best fit. On the first column (A) I have "Bills" labeled at the top and then all of the rows underneath I have my bills listed out. Example: Bremer Credit Card, Amazon Credit Card, Water Bill, Gas, Heat, Electric, Rent, Car Payment, Insurance, Netflix, etc. In The next column (B) I have the current year "2017" listed at the top, then under neath I have all of the amounts for the corresponding bills listed in order next to the name of the bill. In the next column (C) it is titled "Interest Rate" and I have the interest rates for all of my credit cards listed in corresponding order. You can get this amount from your statements. The next column (D) is titled "Balance" and I keep my current credit card and loan balances updated monthly here. The following column (E) I have as "Payoff Notes" so I can keep track of cards once they are paid off or keep track of when I plan to have it paid off by (be sure to always leave your cards open even if they have a zero balance! You should never close a credit card, because it will hurt your credit. Unless you have zero self control and are afraid you will be tempted to use your card and refuse to cut it up, don't close your account! As a millennial we have a very hard time having high credit scores, because the length of our credit is inevitably short due to our age. We want to keep our long-standing accounts open as long as possible to help with this at 30% or lower percentage of utilization (ex if it has a 1,000 limit the balance should stay as low as possible, preferably at 300 or under.) My next column (F) I have titled as "Due Date" which helps me make sure that I am paying all of my bills on or before the due date each month. If you're like me and live paycheck to paycheck, sometimes its too scary to have auto with drawl on your accounts, so you need a constant reminder of when to pay them, so they are not late. My next column (G) Is titled "Website To Pay" and I have the URL linked to each website where I can click to log on and pay my bills. This saves me a lot of time each month when I want to just sit down and pay my bills quickly. My columns (H) & (I) are my login & passwords for these accounts (because I am always changing them to keep my accounts secure) make sure any device that you have quick access to this spreadsheet is password protected, so no one can access this spreadsheet with your passwords. The next column (J) is "Conformations" and I keep track of all of the conformation numbers I am given every month when I make online payments. (I do this because I have a negative remark on my credit for a payment I DID MAKE, but was reported as late because of an error. Without keeping track of these conformation numbers you have nothing to present to credit reporting companies when something like this happens!) The remaining columns (K-R) I have the rest of my year planned out with the date of my paychecks as the titles "6/16" 6/30" "7/14" etc. This helps me figure out which bills I will be able to pay each check and how much I will have left over to budget with. I have included a screenshot of my spreadsheet with the info blacked out for my privacy, to give you an example of how it could look. I hope this helps! (Click on the image to enlarge it)

    budget template for millennial student loan debt credit cards

    Once you're able to get a grip on your budget, the next thing I would recommend doing is consolidating your debt into one private loan at a lower interest rate than your credit cards that have balances. You won't be able to get good rates until you have been strictly following your budget for a few months and being able to make payments on time and pay down your balances. Once you are able to do this though, you can try applying for a private loan through companies like Best Egg (the one I use) or anyone similar. Just shop around and fill out their online applications to find out what rate they can give you (this doesn't hurt your credit to get an estimate) and go with the one that gives you the lowest interest rate. You want to make sure that you have this spreadsheet built first and you have an idea of what your current interest rates are on your loans first and make sure you can get qualified for a loan that is at least a few percentages lower. If you can roll your student loans and your credit cards into one 10-15 year term loan you may be able to save a TON of money on interest and have lower monthly payments and charges (like late fees, annual fees, etc.) 

    Once you get used to following your budget, you get your debt consolidated, and you get your monthly payments lowered, you will finally feel a wave of relief that you're making positive steps towards paying off your debt. I was so sick of seeing my monthly statements with numbers like "principal paid: $300 interest paid: $9,687" this means that you're not even paying enough to pay off your loan, you are just paying interest to a bank for even having the loan but not paying money towards paying it off. The whole student loan epidemic is pretty much a similar scam to the housing market loans that happened, only we were not trying to buy houses we couldn't afford, we were just trying to get an education to better our futures. 

    I hope this article helps you get onto a track that will help you actually start to pay off your debts. There is no magic get rich schemes and all of these articles about how millennials can make money to budget on penny hoarder or whatever always just tell you to sign up for crap and take online surveys to make an extra $30 every month. I say, stop wasting your time and barely being able to dig yourself out of the hole, and make major leaps to financial freedom by following a budget, refinancing/consolidating your debt, and getting a knowledgeable look at what you're paying each month.

    I went from having a mid 500's credit score, to being able to qualify for a loan for a new vehicle in just a matter of months. Getting back on track financially is possible and getting started today is the best way to invest in your future.

    I wish you luck and please comment if you would like me to elaborate on anything or follow up with any other information! <3

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