Student Loan Debt Sucks But It Can Be Destroyed

student loan debtWhen my wife graduated from college with her four year nursing degree in 2011 she graduated with over $80,000 in student loan debt. It was a heavy burden for both my wife (girlfriend at the time) and myself. We knew it was a ton of debt and that it’d likely take a super long time to pay off.

Back then our minimum payments were right around $700 a month which was a ton of money. In fact, it was even more than our first ever house payment. We knew we wouldn’t want to pay that debt off for over a decade or longer, so instead of wallowing in our sorrows of our massive debt load we made a plan to pay it off as quick as possible.

Made A Budget

The first thing we did was make a budget. Since we weren’t married at the time, we actually made two budgets, one for myself and one for my wife. Our budget was pretty strict but it was in line with our #1 financial goal of destroying her student loan debt.

Any money that we ran into, whether it was a cash gift or our paycheck, that wasn’t in our budgeted spending got put immediately to pay off my wife’s student loans. The surplus in my budget got put into a savings account to pay her loans down once we got married. Sometimes we’d make as many as four payments to her highest interest rate student loan in one month!

Unfortunately, with just the income from our jobs it would still take many years to pay off the massive amount of student loan debt so we looked at ways to speed up the process. We found a couple ways to make more income that ended up helping us out a ton.

Finding Extra Income

We wanted the debt gone and the quickest way to pay more money toward that debt was to find extra income. Once Tori finally got a job we had her base income to put toward the student loan debt. I already had a job, but I was a salaried employee so I couldn’t work extra hours to earn more money.

Tori, however, was an hourly worked which meant she could pick up extra shifts at work to earn some more money. On top of that, if she worked over 80 hours in a pay period she earned overtime at 1.5 time her base pay which was pretty sweet. Tori picked up extra shifts when she could and we put all of the extra money toward extra student loan payments.

I wanted to help in the debt pay off journey, so I brainstormed some ways to earn some extra money. I got a new job that resulted in a higher salary and less hours which was pretty sweet. Working less allowed me to start doing something I had always wanted to do, start a blog.

I never thought it’d end up making money from my blog, but with a lot of hard work and a bit of luck we started making money! It was exciting because it meant I had found a way to contribute toward paying down the student loan debt.

Both sticking to our budget and finding extra income helped us to pay off Tori’s debt very quickly. In fact, we managed to finish paying off her student loans this year in less than 3 years total!

Did you graduate with ton of student loan debt, or did you graduate debt free like I did? Either way, I’d love to hear your stories about your money adventures. Shoot me an email (adventuringdollars at gmail dot com) or leave a comment below!

Photo courtesy of jscreationzs via freedigitalphotos.net.

I’ve Been Declined Life Insurance – What Are My Options?

The following was contributed by a reader.

Neon Insurance Office SignIf you’ve just been declined for life insurance coverage, then you may be feeling very disillusioned. It does not necessarily mean you will never be able to find coverage, though.  There can be several reasons for an insurance company refusing your application.

Refusal on Health Grounds

If you have a pre-existing medical condition a company may be unwilling to take on the increased risk of insuring you.  If this happens you should always obtain a full written explanation of why your application was refused.  It is always possible that an underwriter has made an error interpreting your medical history.

If you believe that the refusal was unfair, it may be worthwhile approaching your doctor to provide more detailed information to the insurance company concerning any medical issues and your current health; there is of course no guarantee that this will change the decision.

You may also wish to obtain a copy of your medical records from the Medical Information Bureau (MIB).  This facility is owned by several insurance companies across North America and holds a database of individuals who have applied for certain types of insurance.  When an individual makes an application the insurance company can check the medical details provided against those held by the MIB.  Companies are only allowed to use this facility for information and are not allowed to make decisions based solely on these records but it may still be useful for you to see what the insurance company has seen.

It is important to remember that refusal by one company does not mean you will be refused by another; it is worth shopping around.  Likewise being declined at a particular time does not mean you will be declined again; the same company may accept your application if your state of health changes.

Another way of securing cover may be to apply to be a part of your company’s group life insurance.  You can get your own life insurance quote over at AAMI by visiting their new site today. This is generally a scheme on to which all employees are accepted but you may find your premiums are high.  Insurers who provide group policies do so at the risk that not everyone in the group will be in good health.  As a result they mitigate this risk by increasing the cost in order to protect profits and remain in business.

Refusal on Financial Grounds

You can only secure as much life insurance as your income will allow; generally coverage varies from between 10 and 30 times your annual income.  You need to apply only for the amount of coverage required and to be able to justify the amount of coverage applied for.  If you have no income you may want to try obtaining a letter from an insurance adviser to explain and support your application.

Know Your Life Insurance

If you are refused life insurance for any reason it can be useful to checkout the information available on what insurance policy options are out there.   Guaranteed issue and simplified issue policies can provide a solution if you are not in perfect health.  As the title suggests acceptance for a guaranteed issue policy is more or less definite with the need only to answer a few simple questions.

However there are points to be aware of in that premiums are higher in recognition of the increased risk to the insurers, payouts are restricted to usually around $25,000 maximum, and many insurers like applicants to be over forty years old.  Simplified issue policies require answers to more questions but do not involve medicals.  Both of these policies are subject to graded payouts dependent on how long they have been held.

Remember, just because you have been declined for life insurance once does not mean that any options are closed to you but you may need to persevere and pay higher premiums.

photo by: David Hilowitz

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