Tuesday, March 15, 2011

Money Tip: Make loan payments during Grace period

A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life ---Suze Orman

Hello lovely people, 

I just wanted to share a great money tip. If you know me, you that I am all about saving MONEY. Don't get me wrong, I love to spend on nice things, but saving money for when I will need it later on in the near/distant future feels safe. I'm all about delayed gratification. Just knowing that I have financial security is a wonderful feeling. Its like having job security or food security and the other securities out there. Not knowing if you will lose your job position today or tomorrow or not knowing where your next meal will come from is one of the worse feelings in the world. 

The TIP: We all have loans from an undergraduate institution, such as a Perkins Loan or a Stafford Subsidized loan. Therefore, repayment does not begin until you are completely out of school (with a 6 months grace period). My tip don't wait until the first month of payment before you begin payments. For example, I have a Perkins loan of $2,300 (not bad right?). Over the past 3 months I have being making $50 monthly payments on this loan (Sometimes more if I can). Every time I make a payment, the principal amount of this loan decreases each time. If I continue on with this, I can completely pay off this loan WITHOUT paying any interest, which means Mo' Money in my pocket. Nice Right?!

So, if you have a little to spare each month, put it towards small college loans, because when time actually comes to paying that loan, it won't be that much (if any). No reason to be paying uncle Sam all this extra money; money that you can use on whatever you like.

Hope this helps, 

Lilia