Living the Student Life after Graduation..sort of

As recent grad school alum, I wanted to do a quick post to give those of you still in school a little heads up. :) However, this is not a Debbie Downer post it is simply some really useful information! We have discovered that our student way of life has not really ended. The reality of the debt you rack up officially hits about 6 months after graduation. Our house payment and our student loan payments differ by about $200.....It is important to remember this when you take that first job. It is also really important to remember to plan for this payback well in advance. I guess my main point is that for the first 6 months in a new job, you can be feeling pretty financially secure. Secure enough to maybe make some big purchases. But don't strap yourself down to things until after you see how your loan repayment is going to fit into your budget. Some things might be a year long contract on Internet or signing a contract for housing--we lived in my parents basement for the first few months we were in KY. I would suggest calculating what your loan payment is actually going to be (there are a lot of calculators online and we have found them to be pretty accurate) and budget this in from the get go. Another suggestion is to put this amount in savings for the first six months (before the government actually asks for it back). Then when you first payment is due, hit your loans with this amount as a big down payment. All of that goes to principal and you have just taken a chunk out of your loan with out much extra effort. In addition, you have been living in "payback" mode from the start so there is no false sense of security in the beginning.

One other thought on payback: put as much of your extra income into getting those loans paid off as you can. The interest rate on Rick's student loans is is double the interest rate on our mortgage..hence the very close numerical value on the payments. The more you put towards those the quicker that debt can be eliminated. An extra $100/month turns into $1200 a year and can cut your payback down by 10 years!