Student loan payments will resume this fall.
Forgive me if it’s too soon, but there are 2 money lessons in there for all of us, whether you have student loans or not.
(Separately, my heart goes out to those who have student loans and got very used to not making payments over the last 3 years.)
Money Lesson #1
“Until the commission check clears, the deal ain’t closed.”
A sales coach once told me that. What he meant was stuff happens, so don’t count your money until it’s 100%, unequivocally yours.
I like to use that concept when planning around the bozos in Washington.
Until it’s passed into law, don’t count on it.
For instance, two years ago when President Biden was talking about changing the estate tax laws, I know someone who panicked and made a bunch of very large, irreversible decisions…
..only to have none of it actually pass into law. All that worry and work for nothing.
Similarly, I was never banking on the student loan forgiveness or suspensions to happen.
Cautiously optimistic, sure, but definitely not spending that money until it was mine…
Money Lesson #2
Whether it’s suspended student loan payments or a paid off credit card, use a reduction in debt payments to increase your savings, NOT your lifestyle.
Ideally, when student loan payments were suspended, I didn’t increase my lifestyle costs by the amount of my payments.
Instead, I increased my savings rate by the same amount.
If I had and my payments were the average $300/mo, then I’d have $10,800 PLUS interest to show for it now.
And while it would stink to not be saving that $300/mo, at least I didn’t get used to spending it on my lifestyle.
End on a high note…
Even though interest rates have gone from 0% to 5%, it looks like they will still honor the fixed rate on your federal student loans.
So at the very least, your payments won’t be MORE than they were before they were suspended.
