78% of American workers are living paycheck to paycheck.

78%!

While this may be surprising to you like it was for me, I think we should step back and realize how uncommon it is for us to want to talk about money. Maybe you grew up believing that it was rude or impolite to discuss money. Maybe money is a sore spot for you, as your family struggled with it growing up. Maybe even reading the word “money” in this blog is enough to make your palms sweat and your cheeks blush.

Let me respond by saying this: I hear you.

Going to a private college that (before scholarships or anything) had a total price of over $50,000 PER YEAR, I surely did not fully understand what I was getting into as a freshman… especially as a young woman who was paying for college all on her own.

Now thankfully, I DID have scholarships and a multitude of jobs on campus throughout my time in school to keep me from paying THAT much per year, BUT I did graduate college last year feeling kind of clueless as to how all the loans I took out worked and how much I actually was going to have to pay back.

I want to be real with you: When I started asking questions, I was terrified.

How could I have THAT much to pay back?

How am I EVER going to pay this?

Are they joking? Is this REALLY accurate?

It was terrifying, but it was so, so good that I went ahead and asked the questions anyway… 

Before we dive in, I want to emphasize here that I am not a financial advisor - I am simply a newly married, recent college graduate who did these things to help her get more ahead with money and wants to pass along what she’s learned to help you. 

I also wanted to talk about money because the Bible talks about money a lot. And Jesus did not die on the cross for our freedom just so that we let money keep us captive as our master.

Galatians 5:13 tells us, “You, my brothers and sisters, were called to be free. But do not use your freedom to indulge the flesh; rather, serve one another humbly in love.”

With that in mind, here we go:

Tip #1: Figure out where you stand with your debt.

I’m talking down to the penny. Figure out exactly what you have to pay back. 

Whether that is credit cards, student loans, car payments, house payments - whatever it may be, WRITE IT DOWN. 

Call the companies. 

Crunch the numbers. 

Know where you stand exactly. 

Start asking questions.

Tip #2: Look into refinancing if it makes sense

After I figured out where I stood with my debt, I started researching other people’s interest rates (the amount you are charged by the lender for borrowing their money). I was SHOCKED at the amount I was going to be paying on my private loans and immediately contacted another company to refinance. I went from having a 9.75% interest rate on one of my bigger loans to refinancing them and getting a fixed rate of 4.3% with another company! More than HALF of what I would have had to pay!! 

This tip may not be helpful for everybody, but by doing tip #1, I totally was able to know exactly where I stood and look at other options to save me money (thousands and thousands of dollars actually).

Tip #3: Get specific

Once you feel pretty good about the numbers, it’s time to really get detailed. 

Open up google drive, make an excel sheet, and write down the source of the debt (credit card company, student loan servicer like Sallie Mae, your bank, etc.), the total balance due, the interest rate, the minimum monthly payment, and the duration of how long the loan payment is projected to be. 

I made one for you that you can download for free at the bottom of this page.

Tip #4: Make a budget

Open up google drive again and search for their monthly budget template. On the right hand side, you can put your income (start tracking what your total monthly take-home pay is), and on the left side, you can put all your expenses (start tracking what you’re typically paying for student loan payments, car payments, groceries, gas, utilities, tithing, gym memberships, savings, etc. per month). Be realistic with this budget and make sure that every penny you bring home has a category - that means you know exactly how much money should be spent in which bucket every. single. month.

I’ve included this excel sheet for you at the bottom of this page.

If you LOVE getting your nails done or LOVE getting ice cream every once in a while, then BUDGET it into your plan if you can make it work with your financial goals. This gets rid of the guilt during those times you get the nails done or get the ice cream or go out to eat because you know YOU HAVE PLANNED FOR IT.

This budget can keep you focused on your goals and get you closer and closer to financial freedom… Proverbs 22:7 reminds us, “the borrower is servant to the lender…”

Tip #5: Make a plan to get out of debt

This tip is more lucrative than the others, because it involves some math, but I’ll try to break it down the best I can. I have made a debt-free excel sheet for you at the bottom of this page that does most of the math for you.

• Take your monthly household take-home pay and multiply it by 12 to give you your yearly take-home pay

• Take that yearly amount and multiply it by the number of years you would like to have your debt paid off by (for example, I want to be debt-free before I turn 30, so my goal is 7 years since I’m nearing the age of 23)

• Now take that total take-home pay amount for those years and subtract the total debt that you have today out of it

• Take that amount and divide it by the number of years you chose to give you what you will have to live off yearly (excluding loan expenses)

• Divide that by 12 to give you your monthly budget for all expenses outside of your loans

• Look at your monthly budget and exclude the loans to see if that monthly budget allowance for those items is realistic

• If it’s not, re-do this using more years (ex. maybe 10 years instead of 7)

• This will give you an idea of how long it will take you to pay back your debt while staying on top of your other expenses

It’s important to note that this is just an estimate and that it excludes interest. It’s just a way for you to have an idea of what’s realistic for you when it comes to paying off your debt in general.

Tip #6: Target the biggest source of interest

Make tabs on that excel sheet and label them by the year, for example, if your goal is to pay off your debt in 10 years, label each year all the way up to 2030.

Next, we’re going to make a plan for each month.

• First, take your total debt amount and divide it by the number of years you chose as your goal - this will give you how much you will need to pay back YEARLY on those loans to get them paid off

• Take that YEARLY goal and divide it by 12 to get your MONTHLY goal

• Then subtract the minimum monthly payments on all of your loans (see tip #3) from this monthly loan payment goal

• What you have leftover is money that you need to put towards one of your loans ON TOP of the minimum monthly payment to reach your debt-free goal

• There are two ways you can go about this: you can either look at the one with the highest interest rate and add the remaining money you have to that specific loan OR if you have a smaller loan amount and can quickly pay it off, you may want to pay on top of that minimum monthly payment to get rid of it quickly - then you can contribute the money from that smaller loan to the others

• Once you have that first year calculated for, take your monthly payments for each loan and multiply them by 12

• Subtract this number from what your loan balance started with and go to the next year to mark down what your balance will start with for that next year - be sure to add some interest to this starting balance

• Continue to do this throughout the years until one by one your loans are paid off, making sure that each time you check off a loan, you are despursing that money to other loans to make sure you hit that total payment goal

Again, I have made a debt-free excel sheet for you that populates a lot of this information for you at the bottom of this page.

Tip #7: Stick to the plan

There you go! You have a plan in place. 

Everything on paper may look great, but it’s so important to stick to the budget you have for yourself and make sure you’re doing check-ins each month with where you’re at with your budget. And if you mess up and spend a little too much one week - give yourself some grace and get back on the horse! 

Tip #8: Give back

Tyler and I have really discovered the joy in tithing these past few months. We are called to give back and serve as people, so make sure you designate some money each month to charities or churches or organizations where you can give back and be a light for the people around you.

Acts 20:35 tells us, “It is more blessed to give than to receive.”

It really does make all the difference.