Debt-Free Parenting: Managing and Reducing Debt While Raising Kids
Today, on Redhead Mom, I’m sharing a partnered guest post about managing and reducing debt while raising kids.
It’s an expensive business, this business we call life. Even the good things cost money. Maybe especially those. But, just as mothers sometimes describe the agony of childbirth as good pain, so raising a family is a rewarding process. It just doesn’t feel like that sometimes. Here’s an idea for the young parent to get started: use your student loan.
Why Should You Consider This?
This is a loan you’ve already got, and if you are paying it back steadily like a good citizen, you will be building your financial reputation at the same time. Your credit score will be good. You might not be a tycoon (yet), but even tycoons had to start somewhere. So, start looking for alternatives to the loan that got you through those college years. There is a whole world of financial opportunities and student loan refinancing options out there, with lenders keen to take over your debt on different terms, making your repayments easier, extending the term etc.
Do this research so you understand the possibilities, then get down to the bank who gave you the loan in the first place and explain what you have in mind. If you were looking for credit to start a business, you would draw up a business plan setting out your ambitions and how you see the whole process going. So, you will need X amount, and within a certain period that will have generated X+.
Future Planning Your Finances
You can do the same with a life plan. You just must give the lender a cohesive idea of what you’ve got in your head, how much money you will need and how you’re going to pay it back. They will need to see you’ve thought it through, and it sounds realistic. Don’t forget, they make their money out of lending because they get the amount back plus interest, so they are looking for customers. They just want them to be a good risk, a good bet, and if you can convince them that you are, they might become very interested in your project and keen to help.
If you can get a mortgage, that’s a huge milestone that suddenly makes you a good proposition: homeowners are the building blocks of a community, and if your small initial loans are consolidated and all you’ve got is a mortgage to pay, that’s like not having a debt at all. Meanwhile, as the kids get older, they can start contributing to the family exchequer, influenced by your shining example. Jobs after school and at weekends, earning money, starting to save a little themselves and feeling good about impending adulthood: such is the circle of life, and a fine and admirable one it is too. Raising a family and keeping your family safe and healthy is a project and a long-term one, but if you’ve got a plan and can demonstrate a level head and some business knowledge, you could become the bank manager’s project, a kind of protégé or star pupil. Be honest with yourself and with them and between you, a comfortable life might be just around the corner.