Realistic Ways to Slash Your Student Loan Debt
If you’ve been reading the news, you might have seen that in the past 24 hours, the federal interest rate on federally subsidized student loans in the United States just DOUBLED. That’s right, the rate that was once set at an acceptable 3.4% now sites at an atrocious 6.8%. Analysts claim that this increase–if not remedied by the help of the government–could cost the average student loan holder an additional $2,600 this year!
Regardless of where you live, student loans are becoming an increasing burden for a lot of people. In a world where education is prized and often a necessary catalyst for establishing a successful career, it can be a hard realization that mountains of debt might come along with the fancy new diploma.
If you’re currently struggling to pay down your student loans, here are some ways you can do so without resorting to any extreme cheapskate behaviors:
Extend the College Lifestyle
If you’re a recent graduate, now is a great time to aggressively start paying down your loans. Yes, money might be tight but once you have a job secured, your focus should be on establishing the building blocks of a successful financial future, one of which is paying off your debts.
As you build your first post-student budget, don’t get pulled into the glitz and glamor of those fat, new paychecks. Instead of springing for expensive bar tabs and designer work clothes, consider extending your college lifestyle a bit further so you have more freedom with your money. You might want to consider holding onto second-hand furniture, eating cheaper meals (doesn’t have to be ramen!) by cooking more at home, and seeking out free entertainment such as public events and joining a fitness or social group with people who have similar interests and hobbies.
This advice extends far beyond your debt-paying years–I’m a huge proponent of finding ways to boost the bottom line, which is why I wrote my previous post about fun & funky ways to earn extra money. There is always a way to bring in more AND enjoy doing so! The key is to seek out something that already works with your existing schedule as well as something that excites you–it’s a recipe for disaster to force yourself to work a second job that you hate!
Once you begin earning more money, you should funnel as much of it as possible towards your student loans. I’m a fan of treating yourself well as part of keeping your life balance, so I think it’s OK to keep a very small amount set aside to do something fun. We’re not talking epic spa days or long vacations here, but perhaps a dinner out or a new shirt from time to time.
There are plenty of ways to bolster your motivation, such as keeping track of your progress, breaking down big goals into smaller pieces that you can achieve more regularly, and communicating your success with those around you (whether it’s friends, family, via a blog, etc.). Develop a system that works for you and stay consistent with your efforts. That $0 balance is just around the corner if you stay the course!
To finish up I’d just like to say a big Thank You to all those who were kind enough to mention Money Rebound in recent weeks, if I’ve missed anyone out please let me know so that I can add you to the list! I’ll be mentioning my favourite posts in the next few days so keep yours eyes open for that.
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