Advertising
Advertising

7 Tips For Graduates Who Need To Pay For Student Loans

7 Tips For Graduates Who Need To Pay For Student Loans

According to a report by the Institute for College Access & Success’ Project on Student Debt, the average amount of student loan debt for college graduates was $29,400 in 2012 and $26,600 in 2011. Now, that is a lot of student loan debt!

If you recently graduated from college, or you are just now creating an action plan to pay off your student loans, the student loans tips below will help you eliminate your debt.

Advertising

1. Calculate your total amount of student loan debt.

This one may sound easy, but you would probably be surprised at how many people do not realize how much student loans debt they have actually acquired.

Calculate your total amount down to the exact dollar so that you know exactly what you are dealing with. This will make the whole situation seem much more real.

Advertising

2. Know when interest starts to accrue.

If you are waiting to pay down your student loans until interest starts to accrue, then you will want to know the exact date of when that will happen. Interest can add up quickly, and if you wait to start paying down your student loans until after interest has already been accruing for a long time, then you may find yourself paying more in interest each month than actual principal payments on your student loans.

3. Determine what your action plan will be.

There are two main ways that you can attack your student loan debt. First, is to eliminate your student loans based on their interest rate. Paying down student loans with the highest interest rates will help lower your overall debt as there will be less interest building up.

Advertising

The second way is to get rid of your smallest student loan debt first. This way you can eliminate each individual loan as quickly as you can. This can be a great motivator as well since you will actually see some progress.

4. Ask for a lower interest rate.

Sometimes, you may be able to qualify for a lower interest rate. The main way to qualify is to sign up for automatic payments in return for a 0.25% interest rate cut. It’s not a large decrease, but it is something. Remember to only sign up for these automatic payments if you can actually afford this set payment each month though.

Advertising

5. Pay as much as you can.

If you want to get rid of your student loans as fast as you can, pay more than the minimum payment. Pay above and beyond that amount. If you are just paying the minimum payment, then you are taking the longest possible time to pay down your student loans. You can cut years off your schedule if you pay above and beyond. Even something such as an extra $25 each month can add up and help you in the end.

6. Find a way to make extra money.

You probably recently found your first “real” job after graduation, but you may want to look into a possible part-time job or a way to make extra money on the side so that you can put all (or most) of this extra money towards your student loans.

7. Cut your expenses.

I’m sure you have some extra expenses in your budget that you do not need to be paying for. Look for these unnecessary expenses and cut them out completely. Then, apply these savings towards your student loans so that you don’t get used to this extra money and spend it on something else.

More by this author

6 Things Highly Effective Leaders Do Differently 30 Things You Need to Try at Least Once While You’re in Your 20s 10 Things Successful People Do Differently To Reach Their Dreams 7 Ways To Manage Emails So They Don’t Eat Up Your Time 4 Steps to Find Meaningful Work For Yourself

Trending in Money

1 How Being Smart With Your Money Leads to Financial Success 2 17 Practical Money Skills that Will Set You Up for Early Retirement 3 25 Things to Sell to Make Extra Money Easily 4 How to Pay off Debt Fast Using the Stack Method (A Step-By-Step Guide) 5 30 Fun Things To Do With Your Friends Without Spending Much

Read Next

Advertising
Advertising

Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

Advertising

So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

Advertising

Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

Advertising

You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

Advertising

Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

Read Next