How to Make Extra Principal Payments on Individual Student Loans

Lately, I’ve felt so free discussing my debt-free goals with close friends in China. When I shared how I finally paid off my undergraduate student loans 9 years and 1 month after walking across the stage, my friend, Ti, told me about a former co-worker who was taking longer than that.

This single father is approaching 40. One day, he looked at his statement and grew frustrated. The balances weren’t going down. He had been paying extra for a few years.

He called the company to complain. Little did he know that his extra payments weren’t being applied to his principal.

“Oh, no!” I groaned. “You gotta tell your money where to go.” I’m sure many of us have played the leading role in this cautionary tale. But a few years ago, I wised up (pun intended). I learned how to make sure extra payments applied to my principal—not just my interest. Find out more!

The 5 Most Important Things I Did to Organize My Finances as a Newbie

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

One of my best friends called me “the money expert” the other day and I chuckled. I thought, “Me?! Girl, bye!” Truth is: My last name is Wise, but I was anything but just a few years ago.

As a recent college graduate in North Carolina, I thought I had everything in control. I had a job in my field, which some of my friends couldn’t say, and I didn’t have to depend on my parents for anything. That’s because I was depending on Visa.

My level of financial literacy was non-existent. Neither Mom, Dad nor my teachers had ever taught me about managing money. When I decided to take responsibility for my financial life a few years ago, here are some of the most crucial steps I took to organize my finances.

1. Started seeking knowledge.

Everything starting with Call Number 332 was fair game at the local library. I think the first personal finance book I checked out was Girl, Get Your Credit Straight! That title gets to the point, doesn’t it?! I needed someone to be real with me and break things down simply. Author Glinda Bridgforth explained how credit scores were calculated and what I could do to get caught up. I even ordered my first credit reports. The more books I read, the more resentful I became for not knowing all of this already. More importantly, I grew more confident in my money management and decision-making skills.

2. Stopped using bills as coasters.

Avoiding money problems leads to more money problems, so I stopped tossing bills on my nightstand like frisbees and leaving them there to collect dust. When I opened up the Bank of America, Old Navy and CFNC statements, I finally confronted the numbers and saw how reckless I’d been. I also found out my mom had maxed out one of the credit cards in my name. The balances seemed insurmountable at the time. But I had, at least, conquered my fear of knowing the numbers so I could make a plan to clear the balances.


Click here to read more.

10 Steps to Paying Off Balance Transfer Cards Early

It seems simple, right? To pay off balance transfer cards—or any debt— you spend less than you earn and send the leftover money to the lender. That’s true, but there’s a lot more to it. You have to get your mind right and set up systems that support your debt-payoff goals.

I’ve successfully and unsuccessfully used balance transfer cards to pay off debt quicker. I don’t recommend them unless you’re disciplined and follow these tips. I nearly maxed out the latest balance transfer card and was determined to pay it off before the 0% interest rate expired in December 2018. In this post, I’ll break down each step I took to pay off a balance transfer card 5 months early.

Balance Transfer Card Debt Breakdown
Here’s the timeline:
  • August 2017: I got approved for the Barclaycard Ring Mastercard, a 0% interest balance transfer card with a $0 balance transfer fee. Yep! I transferred my debts for free! I transferred two credit card balances and a grad school loan onto the balance transfer card (Bank of America Visa $2,194 + Old Navy Visa $1,943.87 + Grad School Loan $2,809.87 = Total $6,947.74).
  • December 2017:  I paid off the two credit card balances. Those interest rates were 19.40% and 25.24%, respectively.
  • July 2018: I paid off the balance transfer card in full.
  • December 2018: The date in which interest would have started accruing on the remaining balance if it were not paid in full.

10 Steps to Paying Off Balance Transfer Cards 2 Early 1

Click here get the 10 steps to paying off a balance transfer card early.

Create a Goals List in Canva for Free

It’s important to keep your goals front and center to stay on track and keep a positive mindset on this journey. That’s why I love sharing my intentions on Instagram every month. Canva.com is the place I go to design everything.

Canva is an incredible tool for all of your design needs. Instagram posts, blog headers, ebooks—it can all be done in Canva. I’m not sponsored by them. I’m just saying.

You can create a goals list like this on Canva.com with a free account in a few minutes.

Goals list created by Canva's free account

The list only consists of 5 elements:

  • yellow paintbrush stroke
  • heading or title i.e. “August Goals”
  • checkboxes
  • body text i.e. individual goals
  • watermark i.e. WISE WOMAN WALLET

When you want to check off an item, you can return to Canva and add check marks.

HERE’S HOW TO CREATE A GOALS LIST IN CANVA FOR FREE

Click here get step-by-step directions with images.

Which Debt Do I Pay Off First? Here are 4 Methods (Free Worksheet)

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

If you’re new to the debt-free journey, you might be lost in the sauce. You don’t know where to start in this debt-payoff process. “Which debt do I pay off first?!,” you shout. I feel you.

When I started to become financially literate, I didn’t know anyone personally who was paying off debt. I had to educate myself.

The first things I learned were YOU MUST PAY MORE THAN THE MINIMUM and ATTACK ONE DEBT AT A TIME. Don’t spread out your extra cash across two or three bills. 

Why? Studies show that when you focus on one debt at a time, you knock out debt considerably faster than those who spread the wealth over multiple accounts. Your brain likes to focus on one thing at a time. Go with it. 

  • Put extra money (“the debt eliminator” according to Patrice C. Washington) toward one debt.
  • Make minimum payments on the rest of your accounts until you pay off the first debt. 
  • Then roll over the extra money into the next debts until you’re DEBT-FREE! YAY!

Mathematically, the rollover method makes sense too. Look at the simplified example below.
Rollover versus Even Spread Payments

Rolling over shaves off 2 months! Putting all of your extra money toward one debt leads to a closer debt-free date. That’s what you want. Attack one debt at a time.

So which debt do you pay off first?

There are a few ways to prioritize debts. One of the first personal finance books I read was The Total Money Makeover by Dave Ramsey. He introduced me to the Debt Snowball. I read more and discovered the Debt Avalanche. Then I started making my own methods up. Let’s go through these four methods to prioritize which debt to pay off first. Then download the free worksheet or Excel spreadsheet to pick your favorite repayment strategy.

Click here to see the four debt repayment strategies.

2018 Mid-Year Reflections: Crushing goals and learning lessons

Wow, guys! We’ve made it halfway through another year. HOW SWAY?!? It was just winter yesterday!

Check out what I’ve accomplished so far and read the BIG NEWS about what’s coming up in the fall. Please share your wins and opportunities for improvement in the comments.

How have I done with my 2018 goals so far?

The goals include:

  1. Reduce debt balance by $18,000.
  2. Become a certified teacher in Florida through an online program.
  3. Pay cash only for all certification costs.
  4. Pay off Barclay balance transfer card by June 30.
  5. Climb the Great Wall of China.
  6. Create passive income stream(s).

Through dedication and the universe working in my favor, I’ve checked off 2.5 goals so far. I’ll explain the .5 in a bit.

  1. Reduce debt balance by $18,000. This was a goal I made before deciding to pursue my educator certification. If it weren’t for paying nearly $6,000 for the program, I would have kept up with my debt snowball and been on track to accomplish this goal. Instead, my debt balance has only been reduced by $3.074 from January to June. Womp womp! Maybe I should have amended this goal after I enrolled in the certification course so it would be more realistic and attainable. I could have reduced more debt if I hadn’t traveled and overspent in other areas. But I wouldn’t trade my trips to Beijing, the U.S. and Hong Kong for anything. Bonding with family and friends worked wonders for my soul.
  2. Become a certified teacher in Florida through an online program. ALMOST DONE! Here’s the aforementioned .5. From January to mid-June, I managed to complete all of the lessons, pass three Florida Teaching Certification Exams (on the first try!) and turn in all of the paperwork to complete the TeacherReady program. What a relief! The Florida Department of Education has to evaluate my certification application to finish the process. I’ll be certified by the fall, God-willing.
  3. Pay cash only for all certification costs. DONE! Each lesson cost $600. Thank goodness I could pay I as I went, so each month I sent home cash. Some months, I finished a lesson before I sent home money, so I used a credit card and paid off the balance in full each month. No long-term debt was accumulated to get this certification.
  4. Pay off Barclay balance transfer card by June 30. I’ll miss this goal by 2 weeks. Paying off the teacher certification course and traveling took priority over paying off the balance transfer card. It’s not a big deal considering that the card won’t charge interest until December. As soon I get my paycheck on July 10, I will be sending money home to pay this bad boy in full ($1,670).
  5. Climb the Great Wall of China. DONE! I honestly think just putting this goal out in the universe help it manifest. While a friend was styling my hair, she mentioned that she was going to Beijing to sell her candles at a new business expo. My ears perked up. She hadn’t gone to the Great Wall either. My wheels started turning. In less than a few weeks, I was on the plane with two friends and we were doing the Electric Slide on the Great Wall on Easter Sunday. EPIC! One of the best weekends of my life!
  6. Create passive income stream(s). The second half of 2018 will be dedicated to this goal. I’m a knowledge whore. I read, read, research and read some more, but I have yet to really plan and act. Having multiple streams of income is paramount to getting out of debt quicker, pursuing financial freedom and giving myself the opportunity to work and travel at will—not out of necessity.

AND THERE’S MORE!

2018 mid-year reflections Wise Woman Wallet_2

Find out what else happened.

How to Form Rich Habits in 30 Days or Less

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

“Most people don’t struggle with money. They struggle with habits.”— Anthony Coleman, Financial Lituation

Let that marinate. “Most people don’t struggle with money. They struggle with habits.” What we do day in and day out weighs heavily on our lives a year from now, five years from now and so on. If we want to be financially independent, then we have to create good, daily habits that support that goal.

Tom Corley studied the habits of the rich and poor for five years. That’s when he realized that the majority of the rich share certain habits. The poor have their own mindset and habits, too. Corley’s book, Rich Habits: The Daily Success Habits of Wealthy Individuals, outlines 21 wealthy habits anyone could follow to help them attract money.

“Our habits, good or bad, determine the financial circumstances of our lives.” — Tom Corley

Here’s the thing. We don’t have to reinvent the wheel. If you want to be rich, then do what the rich do.

6 Rich Habits You Could Form in 30 Days or Less

Here are a few Rich Habits you could form in under three weeks, Corley says.

  1. Do aerobic exercise 15-20 minutes a day for at least 18 days. This promotes brain and body health. 76% of the wealthy exercise aerobically 4 days a week, according to Corley’s research. 23% of the poor do this.
  2. Eat healthy every day for at least 18 days. This promotes brain and body health. 70% of the wealthy eat less than 300 junk food calories per day. 97% of poor people eat more than 300 junk food calories per day.
  3. Read to learn 15-20 minutes a day for at least 18 days. This a personal and professional growth activity. 88% of wealthy people read 30 minutes or more each day for education or career reasons vs. 2% of poor people.
  4. Listen to audiobooks or podcasts during your commute or some other time during the day for self- or career development. 63% of wealthy do this. 55 of the poor.
  5. Write a to-do list every day to keep you focused on accomplishing your goals—big or small. 81% of wealthy maintain a to-do list vs. 19% of the poor.
  6. Limit television time to less than 1 hour per day. Yep! A whole hour! 67% of wealthy maintain skip TV vs. 23% of the poor. Guess who watches the most reality TV! 6% of wealthy watch reality TV vs. 78% of the poor. Wow!

Forming these habits could take 18 days or fewer! Not bad, right?! Brian Tracy considers these habits to be of medium complexity (can be formed in 14-21 days). If you get these habits down, then you could build discipline and form more habits based on the ones you’ve already mastered.

Click here read more and get your free worksheets.

How to Get Out of Debt with Sheri Riley’s P.O.W.E.R. Process

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

Getting out of debt is quite simple. There are three steps:

  1. Spend less.
  2. Earn more.
  3. Pay off debt with the difference.

Simple, but not easy. Debt slayers are acutely aware of this. If it were all about the  numbers, then everyone would be debt-free in a heartbeat. But the debt-free journey also calls on you to fix your mindset and find strength, courage and creativity you probably didn’t think you had.

Sheri Riley’s awesome book Exponential Living: Stop Spending 100% of Your Time on 10% of Who You Are lays out a solid process for setting yourself up to achieve any monumental task. She calls on you to live in your P.O.W.E.R.

  1. P – PerspectiveAdopt a point of view that empowers you.
  2. O – OwnershipOwn what is important to you.
  3. W – WisdomIdentify your one or two next basic steps.
  4. E – EngagementCommit to the implementation of those steps.
  5. R – RewardStay consistently engaged with the process in order to experience the positive outcomes.

Let me explain how to use your P.O.W.E.R. to slay debt.

P – Perspective – Adopt a point of view that empowers you.

If you want to make a change in your life or respond effectively to a challenge, the way you look at the situation—your perspective—is critical.

Sheri writes that if you see the situation as an opportunity or chance to elevate your game instead of a crushing blow or bad luck, then you’re halfway to a positive resolution. I believe her.

On a podcast, a journalist who eliminated over $100,000 of debt in two years said he stopped thinking of his debts as burdens. Instead, they became targets. Then he set his sights on getting rid of the first one on his list. And then the next one. And then the next one. I had started using that tactic, too. Each line in my debt snowball has a name, for example, Operation: I’m So Over Undergrad Loans and Operation: Old Navy is Old News (a credit card). Those names make me feel empowered. It’s like I’m a soldier on a mission, no longer the prey.

How do you view your debt and your current circumstances? It’s easy to feel down on yourself. Being $40,00, $50,000 or $100,000 in debt is no fun at all. But if your perspective is “I’ll always have debt,” well, chances are you’ll always have debt.

Forgive yourself for your past money mistakes. Shed limiting beliefs—yours and those you’ve adopted from family, friends and society. And instead of spewing negativity into the universe, speak positively about where you want to be and how you’ll get there. Say “I’m going to be debt-free. Wealth is mine!” That’s the self-fulfilling prophecy you want to manifest.

Get Out of Debt with the POWER Process

Click to read more about the P.O.W.E.R. process.

Wise Woman Wallet Featured on the Clever Girls Know Podcast

Another incredible thing happened recently. Bola of Clever Girl Finance hit up my DMs on Instagram and asked if I could tape an episode of her “Clever Girls Know” podcast. She wanted to talk about my stint in her 6-month accountability program.

I said “YESSS!!!”, of course.

Bola’s one of my sheroes and money mentors. I stumbled across her Instagram feed about two years ago and got hooked. It was an honor and pleasure to talk to her via Skype.

She called at 10 p.m. my time, 10 a.m. her time. Bola noted that it was the first time we had actually had a real-time conversation. I couldn’t believe it!

It was as if I already knew her. Her voice is so familiar becuase of all of the webinars, live calls and podcasts I’d listened to. Plus, she’s so easygoing and relatable.

I had just gotten home when she called. I told her I was tired and asked her to excuse me if I broke out into song due to deliriumm. She giggled.

Bold told me what she planned to ask during the recording and tested the audio. Then we got started. I could have gone on and on. I’m fired up about my debt-free journey, and Bola’s the cheerleader rooting me on. It was a great convo. We talked about the limiting beliefs I’d learned growing up and my plan to change my family legacy.

It was 11 p.m. when we finished. She thanked me for joining. I thanked her for the invitation. She said she didn’t want to keep me up any longer. I joked that I’d probably sit on my futon and watch another movie with Clint Eastwood or Robert Redford. She laughed as I explained that I’d developed a strange propensity for watching films with handsome, old men. LOL! But I digress.

This was my first interview about my debt-free journey. I hope I can continue to share tips and give encouragement through other outlets.

Bola and I hope this episode with inspire others to take more control of their finances and kick debt to the curb. Check out the interview below.

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What did you think of the podcast? Tell me what you took away from the conversation, and subscribe to “Clever Girls Know” if you haven’t already!

2017 Mid-Year Reflections

We made it halfway, folks! It still amazes me how time flies at warp speed. And with each minute, I hope I’m getting wiser, better and closer to my goals. Unlike other years, I locked my mind into this debt-free journey for the long haul. My 2017 goals reflect that decision. Check out what I’ve accomplished so far and read the BIG NEWS about what’s coming up in the fall.

How have I done with my 2017 goals so far?

The goals include:

  1. Saving $1,000
  2. Paying off my Chase credit card
  3. Paying off two of four parts of my undergrad student loan group
  4. Reading 12 books
  5. Visiting Thailand
  6. Visiting family and friends back in the U.S.

So far, I’ve checked off four out of six goals! Crazy! These were stretch goals in December because I wasn’t sure of my cash flow. I’ve got to think bigger next year.

  1. Saving $1,000. I completed this task shortly after getting my tax refund in February.
  2. Paying off my Chase credit card. I made four payments in May to wipe out the remaining $825.31 balance I had on May 1.
  3. Paying off two of four parts of my undergrad student loan group. These two small debts were knocked out in the first quarter.
  4. Reading 12 books. How about reading 16 books? Yeah. I devoured 16 books thanks to my long commute and my appetite for self-improvement. And my goodness, I’ve learned so much!
  5. Visiting Thailand. That’s still on the docket. Right now, I’m eyeing a Christmas getaway. I told myself, however, that I wouldn’t take an international trip until I’d paid off my credit card debt. I must pay off about $4,300 to stay true to myself.
  6. Visiting family and friends back in the U.S. This goal may be pushed back to February when I’ll have a month off for the Chinese New Year.

I also paid off two medical bills in the first half. Overall, I paid off $2,926 in debt. Not bad for a teacher on a low income! AND THERE’S MORE!

2017 Mid-Year Reflections

Find out what else happened.