My student loans are pretty big, around the $30,000 mark. That’s a lot of money, what I used to earn in a year.
The truth is it doesn’t really feel real. I never got to see the money – my loans were arranged by simply signing a few forms and presto, a decent amount of debt.
I spent a few years traveling and completely ignored my debt. The thing about student loans in New Zealand is if you’re in the country they’re interest free. When you’re galavanting around the world, not earning any real money and making no repayments or looking at refinancing student loans, things don’t get any better. They get worse.
But now that I’m back in the country so there’s no rush to pay things off. There’s a compulsory 12.5% of your income repayment rate once you’re over the income threshold but it’s still interest free.
This year I have three finance related goals:
Build up a decent safety net
I’d like to have 6-12 months of living expenses in an emergency fund that I never touch unless I am in an emergency situation. This will help cover any major emergencies that might happen in my life such as my business dying down, something happening with my family or if I’m no longer able to work.
I want to get into investing. The other week I bought some bitcoins as an experiment and the price has hovered below what I paid for the whole time – not an awesome investment, but it was good to see how it works and probably not something I’d pursue too much. I’m just going to hold onto them long term and see what happens.
I want to make my money make me money. I also want to move towards more longer term investments, so need to set aside some money for this. I think I’d like to own either a rental property or an airbnb property in the next few years.
Double my monthly income
This might sound outrageous, but I believe it’s possible. I think my monthly income is around the $10,000-$15,000 mark. I’d like to see that hit the $20,000 mark and then the $30,000 mark. By doubling my income but maintaining the same level of expenses, I’ll be able to save a lot more money.
The thing about my student loans is with my 12.5% repayment rate I’ll probably have them paid in 2-3 years going at the minimum rate, which I feel is pretty fast anyway. With a 0% interest rate when I’m in the country, it actually makes the most financial sense for me not to pay off the loans and use the money for other investments.
I am looking forward to the day where my loan is fully paid and I’m completely debt-free.
Do you have student loans? Have you paid yours off yet? Did you pay them off as fast as you could or are you still paying them off slowly?