I used $ 23,000 of tenant insurance to pay off my student loans
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In May 2018, I graduated from the University of Albany (SUNY) with my BA and was ready to find a job. My first thought, once I hit the max level to complete the first cycle, was, “How am I going to pay off my student loans?” As I’m sure many recent graduates do.
When I started in the workforce, I was earning $ 35,000 and living at home with my grandparents. I lived as if none of the money I had earned or saved was mine, putting 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
During this time 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 get cleaned up. For the past few weeks, my boyfriend’s shower door had been a little tight, and you had to really push it to open and close. I had both hands on the shower door as I closed it 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 complaint – without it my medical bills would have skyrocketed. Eventually, after several months of doctor’s appointments and negotiations, I settled in with Lemonade for $ 23,250, on top of what they paid for my medical bills.
Twenty-three thousand two hundred and fifty dollars. Just a few hundred dollars less than I owed the rest of my student loans. This money has changed my life.
I have 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 of 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 a Roth IRA, and am now able to 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 actually have a chance to retire.
Because I have no more debts, the idea of buying a house in the future 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 25 years old. But I had to suffer nerve damage to do it. If I could go back in time and avoid this traumatic event, I wouldn’t. I would go back and let this happen over and over again. All the pain and suffering, along with the permanent scarring and nerve damage, is worth freeing from student loan debt.