I used $ 23,000 of home insurance to pay off my student loans

0


When you buy through our links, Insider may earn an affiliate commission. Learn more.

  • I graduated from college with over $ 20,000 in student loans and worked hard to pay them off.
  • When I cut my hands and got a home insurance payment, I put every penny into my loans.
  • My hands are permanently damaged, but insurance has helped me make the most of a bad situation.
  • Read more stories from Personal Finance Insider.

In May 2018, I graduated from Albany University – State University of New York with a bachelor’s degree and was ready to find a job. My first thought, once I hit the maximum level to complete the first cycle, was, “How am I going to pay off my student loans?” I am sure that is the case for many recent graduates.

When I started in the workforce, I was making $ 35,000 and living at home with my grandparents. I lived as if none of the money I had earned or saved was mine, spending every available penny on my student loan debt.

I know some people say there is “good debt” including student loans, but I don’t have a financial safety net. My family support me with love but have struggled financially for years. I didn’t want to risk having this debt on my head forever.

The accident that changed my life

Meanwhile, my three-year-old boyfriend moved to Manhattan and rented a tiny three-bedroom, two-bathroom apartment with a few friends. I was going to visit every other weekend and enjoy the city on a budget, always extremely careful with the money I spent.

In September 2019, on a Sunday, my boyfriend and I returned to his apartment to have us cleaned. Apparently my boyfriend’s shower door had been waterproof for weeks. When I walked in it had opened easily, but then I had to push it hard to close it. I had both hands on the shower door when the bottom wheel came off and the shower door shattered.

I sliced ​​off both of my hands, wide open.

After receiving stitches and x-rays, seeing a neurologist, meeting with an occupational therapist, and attending several follow-up appointments, I left with nerve damage to my right thumb and permanent scarring.

Lucky for me, my boyfriend had tenant insurance through Lemonade. As soon as we got home from the hospital, I pushed my boyfriend to make a claim – otherwise my medical bills would have skyrocketed. In the end, after several months of doctor’s appointments and negotiations, I settled with Lemonade for $ 23,250, on top of what they paid for my medical bills.

It was just a few hundred dollars less than I owed on the rest of my student loans. This money has changed my life.

I’ve built my net worth since

I immediately used my settlement money to pay off my student loans in full. After that, I started putting all my available money into savings and investments to build my net worth.

I have since been able to save about $ 50,000. I opened a 401 (k) and Roth individual retirement account and can now put my money aside for the future – something I didn’t see myself doing for 10 years or more. My goal is to maximize my Roth IRA each year so that I can have a chance to retire.

Because I am no longer in debt, the idea of ​​buying a house is just a dream. I can save for my dream honeymoon. I don’t have to worry about credit card debt. My credit score is now 793 and is only going up.

In the end, thanks to this settlement, I was able to free myself from my debts at the age of 25. All the pain and suffering, along with the permanent scarring and nerve damage, was worth freeing from student loan debt.

Editor’s Note: This article has been updated and edited to clarify that the author was unaware that the shower door was sticky before the accident. Additionally, after an internal review, we removed the links to Policygenius and Lemonade to avoid any misunderstanding that the story was commissioned by these companies.


Share.

About Author

Comments are closed.