Why I decided NOT to pay off my student loans…for now
$52, 448 PAID and $7,552 to go!
I had it all planned out. The money was in the bank, my plane ticket was booked and my student loan pay off celebration was all set with my dearest friends in Southern California. Everything was ready. And then… something happened.
My grandmother passed away.
All of sudden there were a lot of decisions my family needed to make fast. How do we best support my dad? Do we book four plane tickets to the funeral? Where will we stay? Does my dad need any help with the expenses? Since my grandma had passed away in Arizona, there was a lot my dad had to do for grandma’s final journey back to Long Beach, California.
It was all so sad — so heartbreaking. The only parent my dad had ever known was now gone.
I realized in that moment I would give anything to help bring comfort to my family during a hard time.
Though I know money can’t solve life’s biggest problems, it sure can make things a little easier. We offered to pay for my dad’s travel expenses, among other things. Sure it meant dipping into the student loan pay off money but if it helped even a little it would be worth it.
As it turns out my dad never took us up on the offer. Thankfully, grandma’s life insurance was going to cover most of the surprising costs related to a funeral. For me, just being able to make the offer to help financially without putting myself in the hole was completely new.
As it turns out, having a little extra in the bank for emergencies felt really good.
After my grandma’s funeral was behind us, I really thought about making my final loan payment.
Let me tell you, I came so close to paying off the full amount. I even logged in, typed in the pay off amount then let my cursor hover of the payment button a few minutes.
In the end, I didn’t do it.
Maybe it’s because having more in my savings feels better for me right now that the thought of paying off my loans.
Especially now that I am freelancing. I need extra pockets of income to pad my slow months.
I had read a lot about why some people choose not to pay off their student loans, and I don’t think I really understood until now. Some of the best reasons I’ve seen include:
- Cash flow and savings
- Keeping your credit diverse (installment payments are a big part of your credit score)
- Investing money instead
Other reasons people say they hang on to student debt include:
- Low interest rates
- Very low payments
- Tax deductions benefits
In the end, I decided to make a compromise. Pay off half the loan and put the rest in the bank to add to our emergency fund, just in case I have a slow month in freelance work. And boy has January been sloooowww=)
A month later the decision still feels right. Especially since we were able to do something a little extra for my dad after everything he went through at the end of 2017.
I may not have a $0 student loan balance yet BUT paying off half my balance was a HUGE milestone! I log in a few times a week just to see my small balance and I still smile.
Just $7,552 to go!
