You know that feeling on pay day, when you fantasize about all the things you’re going to do with your newly earned cash? But just as fast as you think up all the wonderfully extravagant things to buy, you’ve spent it all. Do you ever find yourself thinking, “where did all my money go?” That used to be me. Big time.
I told myself that as someone making minimum wage, with rent, bills, and student loans money would just evaporate, and there was nothing I could do. I wouldn't have extra money in my pocket for long term goals until I increased my salary by tens of thousands of dollars. That story worked okay for me. Other than my student loans, I had no debt and lived within my means while still doing things I enjoyed. The problem was, I never had any leftover pennies to put towards future me.
Then, on one fateful day in October 2016, I had to borrow $2,000 from a family member to help me cover a large expense. I promised to pay her back $500 a month over 4 months, interest-free. And every month, just like I paid my rent, student loans and bills, I made that payment to her - without a change in income and with relatively little change in lifestyle. Where had this extra $500 a month suddenly appeared from?
And then it dawned on me. If I could budget, plan, and pay others every month without excuses, then I could make that commitment to save every month in service of my future goals and ambitions. No excuses.
That shift in mindset led me on a year-long money journey to learn how to make my money work better for me, no matter how little it was.
The first thing I did was become a student of personal finance. I perused every money blog and podcast, from NerdWallet, to Money Girl’s Quick and Dirty Tips to understand how to budget, automate, and save. After six months of intense studying, practicing, and failing, I found my groove and started putting $50 to $200 a month into an emergency fund. I increased my credit score by 60 points and started thinking about the long term. But then I needed to tackle the elephant in the room, my student debt.
In 2010, as a bright-eyed first year entering college, I had taken out a $5,000 loan to cover fees that weren’t covered by Financial Aid. I did the same for two other years during college. The interest rates on these loans were 12%, 7%, and 8% respectively. As far as interest rates go, that’s pretty appalling. To give you a clear picture, my $15,000 of debt after 12 years would amount to $12,000 to $15,000 of interest over the life of the loan. That’s insane! Why was I being punished for pursuing higher education and wanting to work in the nonprofit sector? Did everyone have to become a banker or tech genius to afford student loan repayment?
Once my loan repayment started in 2014, I called the predatory loan company incessantly. Because I’m stronger and less petty now, they shall rename nameless (rhymes with Lee-Fah). I asked for guidance on how to reduce my rate, how to plan my repayments, and any strategies for paying it down given my minimum wage circumstances. I was always met with cold automated voice messages, or worse: cold customer service agents who basically said… sucks for you, we’re collecting anyway.
I would make the minimum payment of $135 a month and call it a day. The problem with minimum payments is that it increases the cost of your loan overtime. So though it’s easier in the short term, you’re stuck with debt for much longer. If I were to achieve financial independence, I’d have to find a way to consolidate my loans, reduce my interest rate and become the sole signee so I wouldn’t burden my aunt who co-signed the loan in 2010. I would have to refinance.
So, in 2017, with the confidence of NerdWallet knowledge and other free online financial resources at my disposal, I went refinance shopping. I looked at what felt like hundreds of different companies. And this time, I made sure to call each of them. I was determined to find a company that had a warm and friendly staff who were willing to answer all my questions before I signed up with them. I found that company in CommonBond.
On my first call with them, Eli spent 35 minutes on the phone with me explaining how the process would work. He then continued a back and forth email chain with me containing 134 messages with my follow-up questions. The vetting process took about 2 weeks. By the end of it, I was sure CommonBond cared about my education, my financial situation and contributing to fix a broken student loan system. They weren’t predatory and had no hidden agenda. Their contract was so easy to read! And there were no hidden fees. What you see is what you get. The cherry on top was that they offered me a $300 cash gift when I signed up!
I’ve been with CommonBond now for almost three years and I’m more than halfway done paying off my loan! To put it in perspective, with my previous loan it would have taken me 7 years to pay off what I’ve already paid off in 2.5. Of course, that’s also because I have a few tricks up my sleeve, like paying more than the minimum payment, setting up autopay to further reduce my interest rate, and more. What I’ve appreciated most about CommonBond is that they are people first, lenders second. That’s made all the difference.
Over the course of 1 year, I completely transformed my financial life with a mindset shift, some financial tools, and a whole lot of planning. If this reformed emotional spender can do it, you can too.
Follow Ama on Instagram & Medium @aadidako
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