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Once the ceremonies are over and you’ve said farewell to your alma mater, it’s time to think about those student loans. When you finally tackle your student debt, it can seem like an insurmountable challenge.
Feeling freaked out by loan repayment? Need a plan?
We’ve compiled a list of five easy tips to repay your loans and emerge debt-free! Once you have strategies in place for smart budgeting and repayment schedules, you’ll be able to breathe a bit easier.
So grab your favorite coffee drink and a notebook, and let’s start budgeting!
#1 Understand Your Plan
Perhaps the most important aspect of loan repayment is to understand how much you really owe. Make sure you have a clear idea of how much debt you’ve acquired and how your interest rate influences your monthly payments. Then, look at your budget and allot a realistic amount toward your debt each month.
Budgeting apps are a great resource to help you visualize and organize your monthly spending. Break your expenses into categories (e.g., rent, groceries, transportation) to keep track of monthly necessities.
#2 Consolidate Your Loans
Consider consolidating your student loans from multiple providers into a single one. This strategy offers a few key benefits:
- It simplifies the repayment process.
- Reduces your monthly payments to a single payment.
- The total amount of interest you pay goes down.
- Everything becomes easier to keep track of.
Contemplate your options—consolidation isn’t for everyone. Be wary of stretching out your loan repayment period, as this may vastly increase the interest you pay over time. Remember, it’s all about finding a plan that works with your lifestyle.
#3 Stick to Your Budget
Once you have a budget, stick to it. Save those new winter boots or Bluetooth headphones for another time. Overindulging on unnecessary purchases makes a serious dent in your monthly budget. Be smart about what you buy!
A few easy ways to maintain your budget include:
- Meal Planning – Don’t grocery shop on an empty stomach! Make a meal plan each week and coordinate your shopping list. Use apps like Pepperplate to instantly share and update shopping lists with your family.
- Cooking at Home – Toss the takeout and cook dinner at home. Make a night of it and plan a themed dinner. Play some mood music, light candles, and have a picnic on your living room floor. There are countless ways to spice up date night at home.
- Saving for Special Purchases – Instead of buying that vintage leather briefcase immediately, practice self-restraint and save up. This way, you’ll be more mindful of your spending and make expensive purchases when you have the means.
#4 Spend Less on Going Out
This tip doesn’t imply that you should stop seeing your friends (no matter what, be mindful of social distancing!). Think about how much of your monthly budget goes towards drinks and snacks. While getting cocktails at a bar is a great way to socialize, don’t blow your budget on booze—because those pale ales can really add up.
Try some of these alternatives:
- Video Chat Happy Hour –Stick to a virtual happy hour. This method is safer and you’ll save on expensive drinks. Make your own cocktails at home or buy a six-pack. Not drinking? No problem! Have a Topo Chico seltzer or fresh juice with your friends instead.
- Relaxing Night In – Draw a bath, light some candles, and put on your favorite playlist. Add an extra budget-friendly dose of relaxation with some CBDfx gummies.
- Picnic In the Park – Provide your own snacks and drinks and lounge outside. Bring a frisbee or a football to toss! Sunshine and fresh air are the best pick-me-ups.
#5 Stop Paying for so Many Services
Take a look at what you’re paying for each month. Are you subscribing to too many streaming services? Do you have a habit of getting weekly manicures? After just a few minutes of asking yourself these questions in the mirror, you’ll be ready to eliminate unnecessary spending.
With this comes the perfect opportunity to embrace a do-it-yourself attitude.
Start by scaling back on little luxuries you can easily replicate at home. It’s time to paint your own nails and tweeze your own eyebrows. Figure out how to install your TV or repaint your living room. This strategy is not only budget-friendly, but it’s also a great confidence-booster.
Chip Away at Your Debt
It’s okay for debt repayment to take time. Set goals for yourself and be diligent about making payments on time. Soon, you’ll see your debt shrinking and your budget growing! When you are a conscious consumer, you create room in your life for the finer things while still staying on top of your student debt.
I’ve done all the things! Girl, I’ve washed my face. I’ve trashed everything that doesn’t spark joy. I’ve walked the baby steps. I’ve cried. I’ve prayed, but my perfectionism has really held me back.
Perfection Hangover can be crippling. Stop comparing yourself to others and start living your best life! That’s why PH exists! I want to encourage you to take control of your money, your blog, and your business.
2 thoughts on “5 Ways to Budget to Pay Off Student Loans After College”
That’s interesting, you have done a great job. Thanks for sharing.
Interesting article, thanks for the information.