Well, we’ve almost all been there, and some, including myself, are still there. The inevitable task of paying off your school debt. Student Loan Hero.com suggests that the average student graduates with $29-$35k worth of school debt. I personally have about that much myself. It’s daunting and scary to think that we leave a higher institution saddled with such extreme debt. I mean, that’s a great down payment on a home!
So since we’re in this boat, how do we get out before it sinks? How you ask? Well here are a few simple steps that if taken, can help.
- Make a Budget– This might seem like a simple solution, but you’d be surprised how many people, don’t use, or even have a budget. Most haven’t ever sat down and really analyzed their finances. First things first, sit down, even if it’s with an excel spreadsheet and start charting down all your expenses and money spent. Look for ways to cut costs, and develop a monthly budget, along with deposits into savings/retirement. All excess apply towards debt! (link to budgeting post)
- Downsize and Simplify Where You Can– When you’re going thru your budgeting process, one of the first things you need to look at is extra expenses. Do you really need the gym membership, or can you live without? What about all those magazine subscriptions? Do you really need HBO, Showtime, and Cinemax? Do you even need cable? Now, look at things like bigger expenses. Are you paying a car payment, and can you trade in for a cheaper car, or eliminate car payment altogether? Look around your house. Are there things of value, trading cards, electronics, furniture, that you don’t need, or aren’t using? It might be time to get out the camera and start listing some stuff on Craigslist! Check out these articles about the easy ways to save yourself some extra money each month: 8 Monthly Habits to Curb to Save Money, Save $500 Month By Stopping These Things, 19 Ways to Simplify Your Life.
- Get a Side Hustle– Now lots have been said about saving money from our spending, and even selling off items for cash, but undoubtedly one of the best ways to make extra cash is by getting a side hustle. Think Uber, babysitting, even starting a blog! All these side jobs that we do, along with our regular work can add up quickly! For more info on side jobs, check out, the Top 50 Side Hustle Jobs.
- Apply Raises/Tax Refunds to Student Debt– This seems like a no brainer, but you’d be surprised. Typically I would recommend putting all excess raise or tax refund money in your savings, or emergency fund, but the truth is, while it’s extremely important to have these funds, it’s almost always smarter to apply this money to debt! Over a year, it can add up to thousands, that usually get overlooked or spent on something frivolous.
- Stay Focused on Your Goal- One of the hardest things about paying off debt, especially large debt, like school debt, is to stay focused on the end game. It’s never fun to think about what you’ll be giving up in order pay off debt, but you must look at the big picture and the sense of relief and satisfaction that you’ll feel when it’s done. There’s always time for more vacations, but only after you’re finances are in order!
Taking the necessary steps to have a plan in place is fundamental to our financial health. Never let it be said that you can’t accomplish your goal if you put your mind to it, and have a plan. Unfortunately, school debt seems to be a necessary evil for many of us. But solutions exist and attacking it head on will yield results! And think of all you can do once this debt is paid off? Contribute to your savings, your retirement, and create some piece of mind about your future.
