Have Student Loans? Here’s How to Get Rid of Them
Do you remember how you felt at the end of the school year as a kid? You were mentally checked out, emotionally drained, and eager to finish classes so you could relax. That feeling reappeared at the end of every year all the way through college.
If you took out student loans to pay for those college years, you and your budget probably find yourself still experiencing that end-of-the-school-year feeling when it comes to money. It’s a vibe lots of Americans have.
In fact, the class of 2016 graduated with an average school debt of $37,000 per person. That translates to a monthly payment of about $425 for 10 years (at a 6.8% interest rate)!
So does this mean you’re in trouble if you have school loans? Not by a long shot. You are in control of how you spend your hard-earned money. It doesn’t matter if you owe $10,000 or $100,000, you get out of debt the same way—by using your budget to get rid of it.
Here’s how you can use your budget to ditch your student loans at a quicker pace:
If you don’t use it, lose it. Whether it’s a seldom-used gym membership or a satellite TV package with a bunch of channels you never watch, look at your budget and cut out items you’re paying for but not using. That goes a long way toward clipping a year or two off your loan payoff time.
Find less expensive alternatives. We all love going out to dinner, right? Well, you can still get your restaurant fix by eating supper at home and having a dessert date instead. You can also look for deals and coupons on your meals out. Focusing that money on your school loans instead adds up big time. Once you’re debt-free, you can celebrate by going out for a fancy dinner—or several of them.
Look out for leftover cash. Budgeted $500 for groceries, but only spent $400? Put that extra money toward your student loans! When you come in under budget on food or any other category, use the difference to pay down your school debt. Don’t be surprised if it equals an additional payment for the month.
Increase your income. This one takes the most effort but produces the fastest results. You can take an extra job walking dogs, tutoring, delivering pizzas, or even selling your own crafts to add hundreds or thousands of dollars to your budget each month. It can literally cut years off the time you’re in debt.
Think of all the things you could do without a monthly student loan payment (not to mention the interest you’d save)! Imagine putting that money toward the things you said you’d do after college like traveling or buying a house.
That day is coming. When you put your mind and budget to it, you can kick your school loans to the curb. And once you do, you’ll have a different end-of-the-school-year feeling—the one that feels like the start of summer vacation.