- Ian Group paid off $190,000 in student loans.
- Budgeting has become a key component of his debt management strategy.
- He shared a screenshot of the budget template he created and explained how it works.
After graduating from law school with $190,000 worth of student loans, things didn’t go the way Ian Group envisioned.
“I thought that when I got out of law school, I would start making a lot of money and I would be able to pay off my loans,” he told an insider.
Instead, he said, the group who graduated in 2011, when the job market remained difficult due to the effects of the 2008 recession, took office jobs that paid $53,000 a year. “I remember crying and saying to my parents, ‘I really regret doing this because I don’t have enough money to pay it back.'”
Feeling devastated, he moved back home with his parents to save money, initially ignoring the loan. Twice he has given grace to temporarily stop payments (but interest will still accrue and be added to the principal balance at the end of the grace period).
“I took no responsibility,” Group said. And that set him back even further. Thanks to high interest rates, his principal balance increased from his $190,000 to his $210,000. “Ultimately I had no other choice. I had to find a way to pay off the loan.”
To manage his debt, he took various steps. He refinanced his loans at lower interest rates, created a budget, and planned to increase his income.
By December 2021, when the insider first spoke with the group, he had paid off $150,000 in student loans.
He’s been steadily piling up, and as of August 2023, he’s paid off $190,000. His remaining balance is his $20,000, which the insider confirmed by looking at a copy of his student loan balance.
A group of 38-year-olds expect to be completely debt-free by the end of 2023. He can afford to pay off the balance today, but the interest rate is so low that he chose to continue making monthly payments to keep the money to use. To make a lump sum payment to invest in the stock market.
In addition to paying off his debts, he built an emergency fund and set aside a budget to cover major expenses such as the house he bought in Florida with his wife in 2021, and his two children’s college education. I am saving and investing for For his own future so that he and his wife can retire in peace. He’s financially stable enough that he was confident about taking a big pay cut when he left a big law firm about six years ago to work for a tech start-up.
He works full time, runs a financial literacy company on the side, and helps others manage their debt through the free content he provides on his Instagram account. ian build wealth and podcastand 30 days paid”debt busters boot camp. ”
Budgeting was a key component of the Group’s debt management strategy. He made a new budget every year, he said. “I put it in an Excel spreadsheet. I put my checking account balance at the top, and then I estimated my expected expenses—credit cards, rent, and other expenses.” Student loans and my income. ”
For each month of the year, I was able to track how my checking account balance increased or decreased according to the difference between my income and expenses.
“We wanted to prevent overdrafts from our checking accounts,” he says. “If you spend too much money, you’ll see your balance dwindle.”
The group recently reviewed the budget it uses personally and also offers to bootcamp clients. He shared screenshots of the various sections and for each he explained to Insider.
His budget is divided into several different sections. The first is income.
Note that the numbers included are not for groups. These are sample numbers to give you an idea of how budgets work.
The group has two columns: Estimated Monthly Income and Actual Monthly Income. The monthly estimates entered in column C are automatically entered in the monthly actual column to give you an idea of what your annual income will be. However, once you know the actual amount, it is basic to enter the actual results at the end of the month. Exactly how much money did you bring?
Also note that you can include multiple sources of income, for example if you have two jobs or earn commissions.
The second section of the budget is devoted to expenses.
Again, in Group we have two columns: Estimated Monthly Cost and Actual Monthly Cost. As with the income section, you will need to go back each month and make changes if your actual results do not match your estimates.
Column A contains expenses that may occur during the month, from rent, internet to dining out, to Amazon purchases.
It also shows the eight categories each expense may fall into: living expenses, transportation, medical, debt service, groceries, dining out, shopping, and temporary expenses. Additionally, each expense can be categorized as a “want,” a “need,” or a “debt.”
The third section is dedicated to tracking investments.
Column A contains a variety of investment vehicles, from Roth IRAs to taxable securities accounts. He also includes a section here to track emergency fund savings.
Note that pre-tax investment vehicles such as 401(k) plans are not included.
“This should really be for after-tax investments,” he explained. “At the end of the day, we think we have this much income and this much spending, and the goal is to see how much is left after that.” For example, a 401(k) If you donated to , the money is automatically deducted from your salary (and thus the income section of your budget) so you don’t have to deduct it again.
The group then contains an estimated budget summary and an actual summary.
“It brings your income, expenses, savings and investments and shows you the net total,” he explained.
It’s important to pay attention to line 31 in the “Actual Budget Summary” section.
“If that number is above zero, you have a net profit for the month and you have extra money,” Group explained. “If it’s negative, you’re wasting money, and you need to figure out a way to fix it.”
The numbers don’t lie, which is why his budget works.
“It’s effective because you can see the numbers,” Grup says. “We are forced to see what is going on.”