Student loan debt. If you’re anything like me, those three words haunt you once you’ve graduated college and have moved on to the real world.
The numbers are staggering. There are about $1.23 trillion dollars in total U.S. student loan debt and 43.3 million American students who carry that debt.
Looking into these numbers means that you’re not the only one struggling with student loan debt. And if you think about it, is investing in your education really a bad move?
Student loans are a part of life for many and shouldn’t be frowned upon because you have received an education that will take you places later in life. Those places could be moving for a dream job, starting a new adventure abroad, or ensuring financial freedom for getting married or having kids.
The bottom line is your student loans shouldn’t come between those life goals, but rather help you celebrate what you received from your education and move forward with your life.
Managing your finances and your student loans doesn’t have to be daunting if you plan ahead.
Here are some of the tips that help me stay on track with my student loans while balancing my other finances on a day-to-day basis:
1. Identify What’s Necessary versus What Can Wait
Handling your finances can be difficult at times because you have to decide what’s important over what can wait. This means that you have to put the important things first –such as your student loans, car payments, rent, and groceries–ahead of your wants.
Your student loans should be factored in every month as a priority and not as an afterthought. Whether you’re paying the bare minimum that is required or trying to pay off more each month, your key goal should be to start seeing that number go down.
So, how do you plan for other items on your “wish list” when you have student loans to pay off? My answer: Prioritize.
Before I make a purchase I ask myself: Do I need this or do I want this?
Asking myself this question has become a second nature to me in the past two years. You have to look at what’s important versus what isn’t in the heat of the moment.
For example, cutting back on purchasing wine every week ($35) and contributing it to your student loans is definitely worth it over time. You’ll be able to pay off your loans faster and reach financial freedom sooner by prioritizing your spending.
Planning out your important purchases and sprinkling in your treats to yourself will create a better financial situation with your student loans and other necessary payments.
Think of it this way: If you’re stuck deciding on it, it’s probably not necessary.
2. Tracking Your Day-to-Day Purchases
Keeping track of all of your finances and student loans can seem overwhelming. But with the help of our smartphones and apps, managing your finances is a heck of a lot easier (trust me).
There are many apps out there to stay on track and up-to-date with our daily purchases, but these are a couple of my favorites:
The Mint app is the all-in-one go-to place to see an overview of your financial status and purchases. The overview breaks your finances down in a simple yet informative way.
- Inputing all of your accounts such as your checking account, credit cards, student loans, and investments
- Your updated credit score
- Your cash flow
- Bill reminders
- Daily spending recaps
- Your spending that gets broken down into categories that you create
Since one of my student loans is from the U.S. Department of Education, the Great Lakes app makes paying off my debt each month easy with just a few clicks. It allows you to review previous payments, your payment history, and the next scheduled pay date.
You can choose to have an auto payment (which I have set up) that makes it that much easier, so you never have to worry about remembering to pay that month. Whenever you need to increase or decrease the amount, the app is right there in your hand to do so.
Utilizing the apps to stay on top of your student loans and other finances will create less stress and more time to relax and enjoy life.
3. Choosing The Right Credit Card
Most banks will have their preference of credit cards for you to choose from, but are they going to help contribute to your student loans?
Credit cards can be become a dangerous habit for some because it’s easy to swipe and not know what you’re actually spending. It’s important to track your spending with one of your favorite apps in order to make the monthly payments and pay off the balance every month.
Selecting credit cards that offer rewards that work with your lifestyle. The goal is to have every dollar you spend working for you in some way.
For example, I have Bank of America debit and credit cards, and the credit card provides 3% back on grocery, 2% gas, and 1% on everything else; Capital One also has a cash back card that gives back 1.5% on all purchases. I’m able to put this cash back towards my student loans without spending any additional money.
Having the right credit cards and spending methods will earn you points and percentages back, which can ultimately go towards your student loan debt.
Student loans are an investment that most college students have to live with after their four plus years of school. It’s important to stay on top of your loans because your balances will only continue to grow due to interest rates.
At times you might want to break down and cry, which is okay, but just remember that you have received an education that will help better your future and career path.