Debt can seem so daunting. It can also make us feel bad about ourselves. Negative thinking can cause us to go on autopilot and want to bury our heads in the sand. But when we decide to tackle the problem, we can look debt in the face and tell it: “Debt! You’re going down.”
On today’s episode of The His & Her Money Show, Jonte Lee paid off $60,000 in private student loan debt in one year. Teaching is his passion and as it says on his Instagram account, he is changing the world, one student at a time.
The Loan Amounts
From 2004 to 2006, he took out 5 private student loans, totaling $67,000. Jonte went on studying but didn’t realize that due to the interest capitalization the loans were collecting interest. The repayments were $500.
His first year and a half after his studies, he took deferment, forbearance but the interest kept on climbing. His debt now totaled $88,000.
Basically, he had incurred $20,000 more due to interest capitalization. In 2018 (after paying the minimum amount for 10 years) he looked at the balance and it was $55,000. Due to the interest, he had paid off $129,000 from a $67,000 loan.
Decision Time
It was easy for him to pay off his credit cards and a car loan, but the enormity of the student debt was just too big. The weight of this loan affected many areas of his life and shame crept in.
He saw other people doing things, going places, buying houses and he felt trapped. Once the decision was made, he made some changes. Jonte wasn’t going to waste another decade of his life.
Honesty Time
After an honest conversation with himself about his spending habits, he discerned that he had allowed his possessions to become his identity.
The realization dawned on him that his clothes were not his identity. Financial flexibility became his goal. Suze Orman’s book, Young, Fabulous and Broke, helped him to break the wrong cycles in his life.
Planning Time
Jonte jumped into action by contacting the loan company. He needed to know how they viewed extra payments. Would it be deducted from the capital amount or from the interest amount?
He used financial tracking apps to see where his money was going. The envelope system assisted him to pay off the smaller loans first and then tackle the next loan and the next.
When he saw movement, he started getting encouraged and he kept going. He made extra money by teaching online, driving Uber, and teaching at summer school.
The Next Step
Jonte is going to rest for a while. And then he will be tackling the world of investing. His advice is: firstly be honest with yourself but remember to be compassionate with yourself as well.
Get in touch with Jonte Lee on Instagram
What You Will Learn
- Fast ways to pay off your loans
- What financial honesty will do for you
- How financial apps can help you
- Why you need to know the contents of your loan account
- How to be compassionate towards yourself
- Get creative and use your talents to make extra money
Resources Mentioned
- Suze Orman’s – Young, Fabulous and Broke
Thanks For Listening!
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