Anyone with student loans understands the importance of paying them off. Student loans will linger on your financial mind as you try to save up for a mortgage, plan a trip, or try to start a family. This is why it’s important that you try to pay your student loans off as soon as possible.
Let’s go through the 5 steps to get rid of student loans:
1. Defer your student loan payments if you have to.
Before you get hit with massive late fees or destroy your credit score, you might have to ask for an extension or deferral of your student loans. This is a critical step because it forces you to get a realistic grasp of your financial situation. If you’re making decent money then you can begin with your student loan payments. If you’re struggling to find a job or aren’t earning enough money then you’re going to have to defer your student loan payments.
It’s important that you contact the company that loaned you the money in advance to let them know of your situation. Most companies are willing to work with you as you try to figure out your financial situation. This is much more effective than just hating your student loans.
2. Find any source of income to pay student loans off.
If you can’t find your dream job right out of college you might have to suck it up and take any job. The longer you hold out for that dream job, the longer you go without making any money and the longer you go without paying off your student loans or saving money. This isn’t the greatest advice to read but the reality is that during a recession you might have to accept a job that you feel is beneath you.
Just remember to swallow your pride and to do your best to ensure that this doesn’t turn into a permanent gig. You can simply turn your mind off at work and save your mental energy for other projects that you want to work on. The important part is that you’ll now have a paycheck that you can use to make your student loan payments and save up to start your side business.
3. Decrease your spending aggressively.
If you do find a well-paid position and simply just want to speed up the payment of your student loans then this idea is for you. If you want to get serious about paying your student loans off, you must cut back your spending. This isn’t sexy advice by any means but it gets the job done. In case you’re stuck on how to save money, below are my favorite ways to decrease spending:
- Prepare your own meals.
- Find cheap ways to have fun.
- Take public transportation.
- Stay at home a bit longer.
Spending money can be fun, but paying off your student loans is amazing.
4. Grow your career.
The best way to pay student loan payments is to grow your career and have more money coming in. For those that are fortunate enough to have a job right out of college, you’re in a unique and enviable position. My only advice is to find ways to grow your career so that you will be able to earn more money and pay off student loans much quicker. How can you grow your career?
- Ask for a raise.
- Take evening courses.
- Work harder than everyone else.
- Switch companies.
As you grow your career over time you’ll be able to put more money towards student debt so that you can eventually enjoy your life more.
5. Stay out of trouble.
It’s really easy to get yourself into trouble out of college. This trouble can come in many forms: legal problems, going out too often, bad habits, and spending like crazy. You must be conscious and understand how toxic this behaviour is. Spending money to reward yourself is perfectly acceptable. The problem lies in racking up massive amounts of credit card debt because you want to have a new pair of shoes or go away on a monthly trip. Since I’m not your mommy and I’m not here to preach to you, I will just suggest that you do have lots of fun post-college, but do your best to stay out of trouble.
If you want pay student loans off then this was the 5 step guide for you. What step are you at right now in paying off your student debt?
(photo credit: usdagov)