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Building a Scrooge McDuckian money vault is too gauche.

I Paid off My Student Loans. Now What?

After spending over a year scrambling to put every extra dollar I could find into my student loans, I’ve paid them all off almost five years ahead of schedule. I’m now in the enviable position of having a big chunk of extra money every month. It literally feels like I just got a massive raise. So what do I do with it?

Building a Scrooge McDuckian money vault is far too gauche. And besides, I want to use this money to improve my financial position in the fastest, most badass way possible (with badass defined as “most profitable in the long-term”). There’s no shortage of options.

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Why? Because fuck student loans.

I Paid off My Student Loans Ahead of Schedule. Here’s How.

I paid off my student loans almost five years ahead of schedule.

I dedicated every waking hour for a little over a year to stomping out these loans like the parasitic infestation that they were, and now that this monumental task has been accomplished it feels really, really good. I wiped out about the last $18k of loans in 14 months, and doing that required intense discipline and concentration. I channeled the mental fortitude of a Buddhist monk and the austerity of an Irish peasant circa the Potato Famine. Here’s why and how I did it.

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Let the scales fall from your eyes, dear readers, for truly name brand products are beneath you.

Name Brand Products Are Beneath You: The Honor and Glory of Buying Generic

Gather round, children, while I tell you one of adulthood’s greatest secrets. It is a pearl of wisdom that can only be gained by leaving the nest, spreading your wings, and comparison shopping. Retailers don’t want you to know it, advertising agencies spend bajillions trying to keep you from learning it. You can live your whole life in ignorance of this simple fact if you don’t spend a little extra effort to look around yourself and pay attention at the goddamn grocery store.

Are you ready? Of course you are, you badass paragon of frugality and virtue.

You don’t have to buy name brand products. Most of the time the generic or store brand is the exact same thing for less money.

Armed with this knowledge, you are ready to embark on a spiritual and financial journey of fiduciary gratification the likes of which the world has never known. You will suddenly discover whole dollars in your grocery budget you never even knew existed. Let the scales fall from your eyes, dear readers, for truly name brand products are beneath you.

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There is a way to build up good, healthy credit while neither increasing your debt nor your risk.

How to Build Good Credit Without Going Into Debt

As we’ve discussed, adult human beings need credit—good credit—to do lots of important adult things such as renting apartments and buying cars. But having debt, whether it be in the form of a balance on a credit card or just Ye Olde Stvdint Loane, can be fucking terrifying.

Fear not, gentle readers. For there is a way to build up good, healthy credit while neither increasing your debt nor your risk.

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If you're confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.

How to Instantly Increase Your Credit Score

One of the ways you can improve your credit rating is to lower your credit utilization ratio, that is: the amount you owe compared to the amount you could borrow.

It’s usually better to just pay down the principal, but sometimes that’s not possible. If you’re confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.

I’d assumed this was a complicated process requiring some degree of cringing, but it turns out increasing your credit limit is extraordinarily easy. This method was described to me by an educator in my city’s free first-time homebuyer program. I will try to transcribe it exactly as she said it:

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Whenever someone gives you financial advice, you have to ask yourself, "What is their angle?"

Bullshit Reasons Not to Buy a House: Refuted

Look, there’s a lot of terrible financial advice out there. I had to seek out a bunch of it to write this article, and I think my eyeballs rolled too far and are now permanently pointing into the back of my head. It is very hard to type. Are my fingers still on the home row? Everything is pink and dark. Please send help.

Recently, I’ve seen some advice against buying a home, and I really wanted to examine that. On the one hand, it makes some sense—in the wake of such a damaging recession, many traditional investment truisms proved to be overstated. Financial gurus were overconfident, and occasionally dead wrong. We are collectively wise to question everything.

But in the opinion of these Bitches, home ownership is right for most people. It can be done unwisely, even ruinously—but there are very few situations where renting in perpetuity is a great choice.

Whenever someone gives you advice of any kind, you have to ask yourself: “What is their angle?” If you ask a professional tattoo artist if you should get a tattoo, they’re probably going to be very enthusiastically in favor of the idea. If you ask your Bubbe the same question, she’s probably going to be very enthusiastically against the idea. Everyone has personal preferences, biases, passions, experiences, and agendas that influence how they advise you. Their intent may not be malicious, but it could be short-sighted or unsuitable to your situation.

Let’s get a spoon and dig into this heaping pile of problematic advice.

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I've come to think that's the ideal role for credit cards to play in a debt-free person's life.

Why You Might Not Need Your Emergency Fund

Excluding my mortgage, I’m a debt-free individual. That means my credit card is a pretty lonely lil’ guy. He doesn’t even get to live in my wallet. He’s entombed in my office with my library card, my old student ID, and that Best Buy gift card with only $3.52 left on it. He has a zero-balance and a $10,000 limit.

I used to keep $6,000 in cash squirreled away as part of an emergency fund—enough to make a few rent payments if I lost my job or had to cover an unexpected accident deductible. I was very lucky, and none of those things ever came to pass; but this meant my emergency fund sat in my savings account, slowly depreciating. Meanwhile, I was toying with the idea of closing my credit card altogether—after all, I never used it.

But eventually, I saw a wonderful opportunity to justify that card, and put my emergency fund to better use: I invested the $6K and designated my credit card as my new emergency fund. I’ve come to think that’s the ideal role for credit cards to play in a debt-free person’s life.

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If you really need to borrow money but you're scared of the bad kind of interest, don't fret! For there are ways to lessen the pain of paying interest on a loan.

Dafuq Is Interest and How Does It Work for the Forces of Darkness?

Here at Bitches Get Riches, we’re constantly extolling the virtues of the law of compounding interest, which Albert Einstein, Mother Theresa, and Nelson Mandela all coined the Eighth Wonder of the World.* This might lead personal finance novices to believe that interest is universally a great and wealth-building thing. Not so, dear readers. Not so. Just as interest can work for you, contributing mightily to your financial goals over a long period of time, so it can spell your very doom. DOOM.

Like a monetary Dr. Jekyll and Mr. Hyde, interest has both your best interests (see what I did there?) and your utter financial destruction at its heart. Let’s explore the dual nature of interest with a healthy dose of hyperbole, shall we?

*Not intended to be a factual statement

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When you get down to it, there is really only one way to "save" money: not spending it.

It Really Does Add Up: On Saving Your Little Savings

“If you don’t start saving your money when you’re young, you’re going to die impoverished, overworked, and alone!” says every personal finance blogger ever to young people just starting out in the world.

And while it’s only a slight exaggeration, this kind of enormous pressure can be overwhelming and demoralizing when you’re just starting to get your financial life under control and barely bringing in enough money to make ends meet.

So what’s a young, financially inexperienced person to do? What’s anyone with bills and debt to do with the specter of an empty savings account looming and no solution in sight?

The answer, as with most personal finance, is to start small. Because when saving, your little savings really do add up.

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