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5 Crucial Steps To Paying Off Your Student Loans Before Your 30s

5 Crucial Steps To Paying Off Your Student Loans Before Your 30s

Student loan debt is a national problem. As of January 2016, total US student loan debt was over $1.2 trillion, and market analysts have warned about how this expanding student loan debt has become a bubble. That bubble bursting could have serious consequences for the US economy, as banks and the government could be crushed under a pile of insolvent student loans.

But the reality is that the student loan debt problem will not be fixed easily, whether at the societal or the individual level. But there are a few things which any student can do to ensure that he is debt free in his 30s. Here are five steps which can make the difference between a manageable debt and a crushing one.

1. Spend less

Let us start with one fact: by and large, people go to college because they want money. College should be viewed as an investment where you spend money on tuition now to make more money later – and despite the concerns over debt, college is still a good investment.

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But the first step to make money is to not spend it. You are in debt. And the reality is that when you are in debt, there are sacrifices which you have to make in order to get out of debt. It may mean delaying a marriage, getting a worse car, or not eating out, but things like that will help to lessen debt over time.

I won’t deny that this is one tough step. But there is no easy way to getting out of student debt.

2. Don’t look for the easy way out

There are thousands if not millions of young adults just searching for an easy way to wipe out their student loan debt and start clean. And that sort of environment attracts scammers looking to prey on the fears and hopes of the desperate.

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Honest student debt relief organizations will never demand money up front, but the simplest rule you can follow is that if a group’s offer seems too good to be true, then it probably is. This example from the Consumer Financial Protection Bureau should serve as an example of some of the things a scammer will do.

There is no easy way out of student debt, and looking for one will get you in trouble. Acknowledging that you are in trouble is the first step to getting out of it.

3. Get a government job

Everyone knows that the military is an option for many individuals to get into college for free. But you don’t have to face bullets in order to qualify for government loan forgiveness programs.

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Most government jobs, and especially teachers, can be qualified for a loan forgiveness program where a set amount is forgiven every year. This can be as much as $10,000 per year for government employees in forgiveness. If you are unwilling to commit to years of government service, then a short-term option is to take a stint in AmeriCorps or the Peace Corps.

It should be noted that these programs have a catch. Most loan forgiveness programs will require you to make 120 payments on time before the loans are forgiven. And some students will struggle when they realize that loan forgiveness programs do not apply to personal finance, such as car loans you may have taken out..

4. Pay off private loans first

The vast majority of student loans come from the government. A 2014 estimate showed that out of the $1.2 trillion in student debt, just $150 billion of those loans are private.

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But private loans are much more dangerous, and should thus seek first priority. The aforementioned loan forgiveness programs do not apply to private loans. And perhaps most importantly of all, private student loans generally have a higher interest rate compared to federal loans.

As a matter of fact, the higher interest rate thing should be noted in and of itself. It may seem obvious, but there are too many people who don’t prioritize paying off the loan with the highest interest rate. This does not just apply to student loan debt: while paying off student loan debt is important, don’t do it if you’ve got credit card debt that will strangle your credit faster.

5. Don’t consolidate your loans.

In order to make paying student loans easier, some people opt for loan consolidation. Loan consolidation combines all of your small loans into one big loan. The government can track your payments based off your income, and the result is an easier to pay off loan which you can just handle month after month.

Except not really. Terms for long consolidation will generally assume that your time for repayment will last longer than if you had not consolidated your loans, which means that more interest will accrue and the loans becomes more expensive over the long term. If you want your loans paid off sooner, then track your loans yourself, and pay off as much as you can every month.

Featured photo credit: Francisco Osario via flickr.com

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Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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