If you’ve completed your college education within the last five to ten years, it’s probable that you’re still grappling with student loans. Even after six years post graduation, I continue to be burdened with nearly $20,000 in loans, despite making substantial repayments exceeding $10,000. It often perplexes me how individuals in their late twenties or early thirties manage to clear their debts and yet achieve financial stability simultaneously.
How is it feasible to clear debts, purchase a car, set aside money for a down payment, plan for a family, contribute to a retirement fund, and still enjoy life in your twenties? Possibly, the experience is disparate for women. I certainly feel like I’m against the clock, trying to get everything in place before the age of 35, which is often regarded as high-risk for pregnancies.
At 28 years old, I find myself in a place significantly different from what I had envisioned. According to my post-graduation five-year plan, I wouldn’t have even been wed yet! I realize that many may relate to their lives deviating from their initial course, and yet, life seems to shape itself exactly as it needs to be. I definitely feel this way, but the question remains–how do I work towards my goals while still in debt?
There are several popular strategies suggested by personal finance experts that can aid in reaching savings objectives while still setting aside retirement contributions. Here is what we found successful:
First, clearing credit card debt. While designing our financial blueprint—which includes goals for retirement, starting a family, buying a house, etc.—we recognized that our debt would hinder our progress. We listed our debts—credit card, car loan and student loan—in the order we planned to pay them off. Our journey began with settling credit card debt, then the car loan, and now, tackling student loans. We endeavor to control our spending in order to avoid falling back into credit card debt. Adhering to a lifestyle within our finances has been beneficial.
Always make the most of your company’s 401K match. Whenever I initiated a new job, I made it a point to contribute the maximum company-matching amount to my 401K. Typically, a match is 3%, so a 3% input from my side would result in a 6% annual contribution to my 401K. Regardless of my debt levels, I’d never miss out on this additional contribution as it’s essentially free money—akin to a work bonus that should not be overlooked.
Constantly save. Our savings journey started modestly—almost imperceptibly. But we challenged ourselves to live humbly, well below our means. Extra funds in our checking account were transferred to savings, ensuring we wouldn’t spend it carelessly. Our saving efforts have intensified over time, and now we have multiple savings accounts dedicated to various objectives.
Lastly, remain flexible with your plans. This was undoubtedly the toughest part. I always envisioned being a homeowner before starting a family. However, I’m beginning to understand that this may not happen, and I’m at peace with it. Our current two-bedroom townhome provides ample space, and renting offers us the opportunity to further increase our savings until we can afford to buy our dream home.
