Yes, I still have the same $20K student loan balance since the end of December 2022. It's not budging until the Supreme Court decides on the legality of President Biden's student loan forgiveness program, which should come in just a few months.
I know I’m not debt free yet but having a $20K balance versus a $120K+ one feels pretty darn good! It has enabled me to start focusing on other financial and personal goals. Here are my top four items:
Buying a House: Student loan debt has left its scars, making me wary of having a mortgage, which equates to being in six-figure debt again! And it’s definitely not a buyer’s market at the moment, particularly if you compare today's mortgage rates (5-6% range) against what they were in the early years of the pandemic (2-3% range).
Given I’ll likely be a homeowner in my late 40s, I don't want to have such a large expense as I head into retirement in the next 20+ years. Yes, I’m aware of the positives…owning a home can be a good investment that increases in value; I can count on the same monthly payment; and the best thing is that I'll be a freakin’ owner!
Still, I like the flexibility of renting. Even now, I’m exploring moving to another city. (And I regularly dream about living abroad!) When something breaks, it’s not an expense I incur; I just log into my residential account and submit a maintenance request. I don’t have to worry about property taxes. And when I'm ready to relocate, I do not need to deal with the stress of selling or renting out my home.
In the last few years, I’ve read more content on how to build wealth without owning a home. This may go against conventional advice, but home ownership is such a big purchase that I have to take into consideration not only my finances, but also the type of life I want to live in both the short and long term. At the end of the day, home ownership is a very personal thing, and I no longer buy into the notion that home ownership is the only way to build wealth.
In my ideal world, I would purchase a small home or condo in a lower cost city/state - sorry Seattle! - in cold, hard cash. I’d rather rent longer in order to save up to buy a home outright. Of course, this would take some serious planning as well as a significant increase in income, as I have no intention of being house poor by throwing all my liquid assets at it. (Yes, this item will be at the top of my list when I find a financial advisor.)
Retirement Contributions: Per a Fidelity article I read, I should have approximately four times my annual salary saved for retirement based on my age (mid-40s). Well, that sure ain’t me. And now that I don’t have the specter of a six-figure student loan debt over my head, I can seriously start tackling this. Last month, I increased my 401K contribution from 10% to 15%. It felt good knowing I can comfortably afford doing this now that I’m not aggressively paying down student loan debt.
Financial Planning: While I’ve been aggressively paying down this debt for the last four years, it has been challenging to see the big picture. I’m overdue getting professional advice on how to navigate my soon-to-be post student loan life. I want the latter part of my life to progress on a better financial footing than my earlier years (20s/30s). As I do more research on finding a financial planner/advisor, I’ll share what I’ve learned.
Bucket List: I started studying Spanish in middle school, and I loved it! I studied it all four years of high school, my first two years of college, and eventually earned a Masters in Spanish & International Trade. Now, I would never say I’m gifted at languages, but I worked hard to not only learn the language but also the history and culture. (As a Black woman, I’ve been intrigued by the Afro-Latina experience in these countries.) I decided years ago that I wanted to visit every country in the world where Spanish was the official language. So far, I’ve only been to three - Mexico, Spain and Honduras - out of 20. It’s time to get back to this goal. I’m tentatively planning to add one more to the list this year, or early next year. Stay tuned!
Takeaway: There is life after student loan debt.