New Goal November!!!

Since last month's financial (existential) crisis, three great things have happened: 

1. I have a new, shiny, just out of the box goal!
2. My business has taken over my life.
3. I sleep better at night...even though it's for less hours - ha! 

Get your credit cards and some scissors, this is gonna be a good one. 

1. The New Goal: Avalanche vs. Snowfall

I have a new goal!! Yeah yeah! Woot woot! It's not a cop out, I swear. So for those who haven't been keeping score at home, the original plan was to pay off $42k before I turn 30 (which was in 2 years). I was driving myself a little bit crazy. Soooo, after weighing a few options using mostly this amazing tool (I heart the internet!), I realized that I would be throwing away money, time, energy and resources if I paid off my undergrad loans within that time frame. Since my interest on my undergrad loans is so low -- 1.1%, aka almost free money -- then I would actually *loose* money (aka forgo opportunity costs if you wanna be fancy) by paying it sooner. 

Okay, in plain vanilla language here were my options for my undergrad loans:
A. Pay down all of my undergrad loans super quick (18 month)  = Pay ~$6,087 over 18 months
B. Pay down all of my undergrad loans as slow as possible (6yrs) = Pay ~$6,200 over 6 yrs

Answer: B. Why? If someone was robbing you on the street and said, "You can either give me $100 right now, or give me $1 a day for the next 101 days," Which would you choose? I hope you said $1 a day, because today (on day one) you'd still have $99 to spend today, you buy your self TIME to make up the rest and replenish it over days 2 through 101, and it only costs you $1 to buy yourself time and more resources. Let this be a lesson to you in low interest!

On the other hand, if they said, "You can either give me $100 right now, or give me $2 a day for the next 100 days," then giving up the $100 now may be a better idea, since you'd loose $100 more if you went with the $2 a day for 100 days. Let this be a lesson to you in high interest -- aka my grad school loans. 

To put this in perspective, my grad school loans have an interest of 6.55%, and accrue as much interest in *one month*, as my undergrad loans will accrue over the next *six years*...yep, wtf grad school?! So, I have a huge incentive to pay them off sooner rather than later. 

Another way to think of my grad school loans is in terms of the minimum payment. If (A) I paid the minimum on my grad school loans (graph on the left), then I'd be done in 2022 and I would have paid $8,680 in interest alone. If (B) I try to pay them off by my goal date, then I would be done by 2015 and have paid $1577.75 in interest. Again, I'll go with option B!

For me, paying off my undergrad slowly and grad more quickly makes sense. I encourage you to use this awesome tool to figure out what works best for you. 

Another choice that contributed to my new goal was the avalanche versus the snowball method of debt repayment. In the avalanche method you pay off loans with the highest interest first. In the snowball method you pay off the loans with the smallest interest first. In other words, Avalanche = pay my grad school loans first (graph on left), Snowball = pay my undergrad first (graph on right). Here's what this looks like for me:

Left: Avalanche method
Right: Snowball method
As you can see, if I pay the minimum on my loans, with the Avalanche method I end up paying $6,536 in interest, and with the Snowball method I end up paying $7112; $576 more in interest. No thanks. So basically, any way you cut it, I should not pay off my undergrad loans asap. But I should pay off my grad loans asap. So, that's what I'll do -- {drum roll!!} the new goal:

For some added perspective, in January of 2013 (when I started this) I had $34,384 in grad school loans, and now I'm down to $29,316.44. 

And, one last time, let's here it for the best loan calculator on the internet! Bookmark, memorize, share, and love it! Go:

If you really want to be overwhelmed, and have become as obsessed with this stuff as I have, here are some more resources from student loan expert Heather Jarvis.

II. My business has taken over my life (aka dreams do come true!)

When I was but a naive teenager, I wanted to be an artist when I grew up; a penniless creative with frivolous pursuits and not enough to eat. But through the guidance of social norms/pressures, I didn't formally go down the artist road...and then I grew up, and I learned that all of that was a lie. A big. fat. lie. Having creative pursuits is just as challenging as any other pursuit. Where it gets complicated is not being entrepreneurial. You must be entrepreneurial. In other words, you have to be able to hustle your art. 

One of my favorite portraits I've ever taken. 
But, if you have a deep desire for something, that not even going to grad school in a field that isn't what you love in your heart of hearts (ehem, speaking to myself here), then you must do that. Your life will not let you shake it off, you'll never get over it, and it's not something you will ever grow out of. Again, those are all, say it with me now: lies, lies, lies. 

So, instead of focusing so much on my debt burden over the past month, I've focused more on my abundance potential, and boy oh boy, it sure does feel like having a giant ice cream sundae fed to you by a harem of men in a private cabana in Tahiti as you get a full body massage. Actually, no, it's better. 

In the past month, I've gotten three gigs grossing ~$1700 and netting ~$700 after taxes; a 40% mark up. WIN! That's more than I've ever made in any other month for the past three years of having my photography and film production business. And, a big part of that is having landed a commercial, which I'm just reeling about (pun intended - tee hee). 

That's right, I'm banking, and loving it. Take that childhood/social doubt! #likeaboss...of myself!

Even if you don't have a side hustle, there are many ways to make extra cash. After all, that's what I'm doing with my business at this point since it's not that lucrative (yet - tee hee). Here's a list of side hustles that I compiled from my own research and from a woman who paid $90k in debt in 3 years:

  • Babysitting You can use SitterCity to find jobs. You “work” for two hours, and then the kids go to bed, so you have downtime, and they pay well. I actually have a friend who babysat about 30 hours a week during our last year of undergrad, and was able to save up to have a two-year round the world adventure thereafter. And, as you may have guessed, she didn't have student debt. 
  • Focus Groups These sessions, where you talk about consumer products, pay anywhere from $100 to $250 for a couple hours. You can research groups that pay on
  • Odd Jobs Check the temporary gigs section of Craigslist for everything from back-end data entry to serving drinks at a party. O-Desk is also a great source of legit, online, and varied jobs. I often outsource some of my own work for my business there. 
  • Mock Jury Jobs You pretend to be a juror so lawyers can practice trial strategies. They can pay $200 for a day of work. Check Craigslist or google “mock jury” in your area.
  • Mystery Shopping You pretend to be a customer at a hotel, restaurant or entertainment venue, and then report back to the company on your experience. (To try it for yourself, check out the Mystery Shopper Providers Association.) You don’t earn money—the company pays for the meal or hotel stay—but this enabled me to still have nights out with friends and or a loved one.
  • Apps:  Of course there are Apps for finding quick, easy jobs: Field AgentGigwalkiPoll.
  • Rent your stuff: Rent stuff from a hammer to a boat, anything you're not using here: LoanablesSnapGood, and Zilock, just to name a few.  

  • III. Sleeeeep....mmmmmm...delicious

    After reading a few little gems (links below) and getting a morale boost from my business, I stopped fretting so much about my debt, and realized that just having financial goals, and working towards them put me on the right track. It's like being fat. When you're fat, you want to be skinny today! But as long as you have a weight loss goal, and are doing all of the sensible things you can be doing to get there (running, eating well, and not starving yourself, etc.), then you will get there. The same goes for getting rid of debt (aka financial fat). Just know you're paying it down sensibly (hence the new goal!) and have your financial goals aligned, then have faith that you will get there, and sleep. Don't forget to sleep. 

    Here are some of the little gems that put me at ease over the past order of luster: 

    1- 40 Financial Things You Should Know by 40: I'm already doing like a third of them. WOOOO! See where you stack up. AND, if you only read one of these gems, let it be this one! You can even PDF the article and save it. Consider this your personal finance check list!

    2 - 5 Financial Rules to Live By: This one's the video below by Learnvest's founder. I LOVE Learnvest and literally read their daily update every day. 

    3 - Other people's budgets: What can I say, I'm a financial voyeur I suppose, and enjoy seeing how other people spend their money. 

    4 - A Couple Built a $500 Glass House: This one is also a video. There are so many ways we can take full advantage of the big beautiful world we live in and the precious lifetime we have to relish it. This project was not only beautiful, but takes you by the brain and shakes out all the pesky conventional paradigms about what a home should be or look like, and breaks down the essence of a home, and the love it can be meant to hold, down to it's most fundamental parts.

    Love your life, be proud of it, and do something as splendid as you are with it...and watch this video:

    5 -   From Zero to a Billionaire: An info graphic on the paths of self-made billionaires. The source of this is also cool. You can move their heads around compare them along gender, citizenship, industry, etc. 

    6 - A Man Who Lives Without Money: This guy went a year without any income, nor expenses. Although I love this idea, I have some critiques about it, he got a free caravan to live out of, for one, and then he rigged it to the the electric grid which is public infrastructure that's maintained and paid for by the taxes he wasn't paying. And, of course, now he wrote a book that he's probably profiting off of. Nonetheless, it's an interesting little experiment. 

    Phew! Thanks for making it to the end of this epic post!! For being nice enough to read all this, here's a sweet little video of what loan repayment feels like, and why its so worth it:

    Enter your email below for a free PDF of the complete one-page checklist
    designed to help you start controlling your money (so it stops controlling you),
    and getting on a path to money peace-of-mind.

    Here's a preview:


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