I went back and forth on writing this post because I am by no means the best role model for handling student loans gracefully. To be honest, my dad dealt with the whole process and I barely thought about them as I was going throughout college, which is a PRIVILEGE– I know, I know. I mean, I knew I would be slapped in the face with them after graduation (and I was) but that’s about it.
However, since joining the adult world, I’ve had to learn a few things. Where was half of my paycheck going to anyways? How long will I be paying these? How can I NOT be paying them that long? And most importantly, how can I continue to enjoy my early twenties while still being responsible with my debt?
According to my POLL on INSTAGRAM, almost 75% of you are in the same boat as me. So let’s dive in– here are my tips!
1. Don’t defer
When you graduate, you’ll likely have a small “grace period” until you have to start paying back your loans. When that period ends and the day comes that you have to start paying, you will NOT WANT TO DO IT. But just bite the bullet and start paying. Rip the band-aid off. After a while, it’ll start feeling normal, I promise. The point is, interest is going to f*** you already, so don’t give it the upper hand by deferring.
2. Start paying while you’re in school
I did NOT do this (nor did I know it was an option) but I read it online and thought was a smart idea. This one’s for any of my youngins’ reading, or if you’re doing grad school, etc. Essentially, some loans can accrue interest while you’re in school, so small payments throughout college will make a big difference when you graduate (with a lot less interest)!
3. Change your mindset
Like I said earlier, once you start paying consistently, student loans become more of a “fixed cost” in your brain, like rent or utilities. Another way to change your mindset is upping the loan payment and making it your new “fixed cost.” Pretend you HAVE TO pay $100 more a month (when you can, financially, of course) and change your mentality to make that the new “fixed cost.”
4. Audit where you’re spending money
A lot of people recommend giving yourself a strict budget, and if you’re a numbers-oriented person, that may work for you. If you’re NOT a numbers person (like myself), every couple of months, just look through your bank accounts and add up what you’re spending money on. When I was spending close to $100/month on Ubers, I knew I had to utilize public transportation more, or looking at my restaurant bills I realized I could probably go without a drink alongside dinner. It’s easier to be money-conscious in the moment when you know where to step back.
5. Use the “unexpected money” method
I listened to a podcast (that I can’t remember for the life of me) where the guest talks about this concept of “unexpected money” going toward debt. This covers random $20’s from your relatives for your birthday, tax refunds, finding money in your coat pocket, etc. This ALSO covers when you’re out to drinks with friends and someone kindly picks up your tab– that’s money you were planning on spending, so put it toward your debt. This method works well for savings, too, if you’re trying to build that.
6. Live below your means
By this I mean living by the “just because you can afford it, doesn’t mean you should buy it” mentality. You don’t need to spend your max amount in rent every month. You don’t need to drain your bank account monthly just because you have it. Spend less than you make. A lot less. (I also use this mentality with trips!! Just because you can afford to treat yourself with a night at a fancy hotel, doesn’t mean you should.)
7. Tackle loans with higher interest rates first
Back to the practical stuff. I currently have two loans and am paying both off simultaneously, but for some people it may make more sense to tackle the one with the higher interest rate first (idea being: the sooner you get that out of the way, the less you’ll end up paying in the long run). Additionally, if you make “extra payments,” perhaps with your unexpected money (FULL CIRCLE!), put those towards the loan with higher interest.
I can’t speak much for this one as I have not refinanced, but I’ve heard it does wonders for people in the right situation. Through refinancing, my sister went from a 19-year payback to a 7-year payback by increasing her payments by only $200 more a month. Some people, of course, could not tack on another couple hundred, so do your research and see if this is a logical option for you.
Another way to make your loans more manageable is by consolidating. A lot of people have multiple loans (like 5+ loans), so instead of making 5 different payments per month with different interest rates, you can combine them, average out your interest rate, and not have to deal with a thousand different payments!! FUN!
9. Side hustle 🙂
I LOVE a side hustle! I don’t have one at the moment, but it serves a few purposes. Some people put their earnings directly toward loans, but I always thought of that more as my “spending money.” So of course it’s an extra source of income which always helps, but it also KEEPS YOU from spending money. When I was working weddings on the side, I had full Saturdays and Sundays where I wasn’t spending a dollar. Had I been at home, that would’ve been impossible lol. Whether it’s babysitting, grabbing morning shifts at a shop, or a once-a-month gig, it all helps. (Some people also find side jobs that align with their hobbies/passions/etc. which is just genius)
10. Do what you can with what you have
Which is also probably the motto for this blog, lol. Bottom line– make sacrifices, cut down on spending, etc., but figure out what works for you. Nobody wants to live at home after graduation but a salaried year without paying rent makes a HUGE dent in your debt. Same thing goes for having a car– can you go without it? Can you hold off another 6 months before getting the new iPhone? Work with what you’ve got.
Seriously though, the list GOES ON! I’ve been researching the topic a lot and am now setting goals for myself to get out of debt sooner than I should. No, I will never give up my trips (that is my sanity) but anytime I’m like… “I really wouldn’t notice $50 missing from my account” I’m starting to just transfer it over. I don’t think about it too long. Probably not great advice but every penny counts, right?
I also wanted to share some great articles if you’re looking to do more of a deep dive on the subject:
- 28 Women Share How They are Paying Off Their Student Debt
- Bye Bye 50K: How I Paid Off My Student Loans Fast
- Debt Free by 30: How We Did It
- How to Pay Off Student Loans Quickly
- Finance Tips I Wish I’d Known When I Was 20
What do you do/have you done to tackle your student loans? Teach me!!
P.S. Anytime I get really up in my head about loans and how much they suck, I remind myself that I a) had a terrific college experience and b) that having loans, as shitty as they are, is still a privilege and many people don’t even have the opportunity to go to college at all.
P.P.S. When I’m more of an adult (wonder how long I can continue to say that) hopefully I’ll have more tactical advice that involves things like investing, interest rates, and passive income, but for now I’m giving you my 24-year-old advice. 😉