Debt and large student loans are a reality for most people pursuing post-secondary education. As the cost of higher learning has climbed, so have interest rates and fees. Whether these extra costs are government-issued or sourced from private lines of credit, all that money has given many people the chance to pursue academia. While the financial burden may be heavy, borrowing money to pay for university is one of the rare instances in life where debt is justifiable. The weight of financing and repaying your education can feel overwhelming, but it doesn’t have to be. All it takes is a little common sense, self-control and a lot of good old-fashioned budgeting.
The real key to successfully paying off student debt with minimal pain is figuring out a plan before you even begin school. If you’ve already missed that opportunity, it’s better to start late than never. Even people who haven’t managed their money will benefit instantly from a little coordination to get them back on track. Organization is the time-tested way to succeed at any task, and managing student debt is a great way to put skills into practice early in life.
Sit down and write out your total income from all sources. Then, jot down your basic expenses such as housing, food, and tuition/loan repayments. These three costs should form the basis of any student budget. Next, write down all your additional costs, no matter how insignificant. For some, collecting old receipts or reviewing bank and credit statements will help in figuring out where money is going and how often. Look at all the money coming and going over a set interval (a month is often a good sample).
Any budgeting and financial success hinges on making sure that total expenses don’t exceed total income. After examining your costs, have an honest conversation with yourself. Beyond your necessities, look at where your money is going. Activities like eating out with friends, shopping and trips aren’t bad in and of themselves, but their costs can add up quickly.
That being said, it’s important to live a little and enjoy yourself. The goal, however, is to do so in moderation. How much are you spending and how often? Ask yourself, “Do I really need this? Is this good value for my money?” As they say, it’s important to differentiate between your ‘need to haves’ and your ‘nice to haves.’ Self-control is an invaluable life skill and the earlier you adopt it, the better at it you’ll be.
Cutting back and living more frugally doesn’t mean sacrificing all the things that make you happy. Indeed, it’s better to see your situation as an opportunity to try new things and shake up your routine. Instead of spending $4 daily on coffee, try making your beverages at home and give yourself a chance to explore different recipes and styles. Instead of shelling out on a taxi or transit every day, change things up and try walking or biking to your destination, if possible. The little savings really do add up if you’re careful about them.
Paying greater attention to your money and how you manage it is an exceptionally useful life skill. As people accumulate wealth and assets, responsible accounting becomes crucial to financial stability. Eliminating student debt sooner translates to earlier opportunities down the road. Buying a house, leasing a vehicle or starting a family all cost money and have to be approached carefully and responsibly.
There are numerous resources available to new students and graduates to help manage debt and money. Loan-repayment options, tutorials and articles about finance, banks, governments and private individuals all offer a wealth of information on financial literacy and what it means for those carrying student debt.
Managing financial burdens early in life is a great opportunity for personal growth and how you’ll deal with the responsibilities of life. Being in debt because of your education may not be the best situation, but you can certainly make the most of it if you’re smart about it, honest and willing to see things from a different perspective.