Now is the season to sharpen your pencil and hit the financial books if you are one of the 44 million Americans still paying on student loans, according to CNBC.
Eliminating college debt fast is possible with the right tools, planning, and support.
Imagine more money in your pocket and the freedom to start saving for other goals - like an engagement ring, house down payment, vehicle upgrade or college savings account for your kids.
Start with your budget.
If you don’t have a budget, now is the time to create one. Do an online search for a budget template and print out a version you like or download a budgeting mobile app. A budget is your plan for how your income is spent (or saved) each month. Have you ever wondered where all your money went? A budget removes the guesswork.
Evaluating your current income and spending habits is crucial to determining how quickly you can obtain freedom from your college debt.
Pay more than your monthly loan payment amount.
Go back to your budget. Is there spending you can redirect to your loan?
- What about eating out or a subscription service (think Netflix)?
- Could you carpool or drive less?
- Are you willing to trade a vacation for a staycation this year?
Determine how much extra each month you can realistically pay toward your loan and stick to it. Consider dividing the monthly payment and scheduling automatic payments each payday. Mentally, this helps the payment seem smaller than one larger monthly payment. Additionally, it will limit the temptation to use the money for the cute purse that just went on sale.
Grow your income.
Your boss may not offer you a raise to pay off your student debt, but you should ask if your employer offers a tuition reimbursement or assistance programs. Then get creative with other ways you can bring in extra income.
- Put your hobbies and skills to work for hire.
- Sell items you are no longer using.
- Pick up a seasonal second job.
- Consider getting a temporary roommate.
Do you receive an annual bonus, money for holiday gifts, or a tax refund? Apply every penny toward your loan. Delaying gratification to make a big purchase will be worth it when you receive your loan “paid in full” notice.
Seek advice from your local banker.
Schedule an appointment with a loan officer. A loan officer can review your financial situation and provide additional suggestions or let you know you are on the right track. She can also determine if refinancing the loan would save you interest costs and help you pay off your loan more quickly.
Get support.
Ask a spouse, parent, friend, or someone you admire to hold you accountable to your goals. Have them check in with you monthly to see if you are staying on track and to celebrate your progress. It is awesome to have someone on your team encouraging you along the way.