I am sitting here in my basement reflecting on a conversation I just had this weekend with my brother-in-law. We talked about money and budgets, graduating from college and student loan debt. All this leads to a terrifying reality: how in the world you are supposed to live on your own when you have never paid a bill in your life!
It can all be super scary!
Imagine if last week you graduated from college and in a few months will be getting married to the girl of your dreams, but just then your student loan repayment plan starts kicking in!
All of a sudden it seems as if all your hard-earned money is simply disappearing!
How are you supposed to prepare for the future and still live your life when the time comes to pay back those loans?
Make a budget
Before you start to conquer your loans, GET A BUDGET in place! If you are serious about becoming debt-free as quickly as possible, you need to be ready to go to war! And to go to war, you need to have a plan.
This is what a budget is for. You need to start telling your money where it’s going, not the other way around!
Start by sitting down with your significant other in order to get a budget on paper. I suggest a budget on paper because it will allow you to see the whole amount of your situation compared to an app. (Plus, I like tangible items). Remember, I am here to help! I created a course to help you create a budget- take advantage of it.
Pay on those Student Loan Debts NOW
If you just graduated, you probably have a few months before your repayment plan kicks in. Don’t wait! Start paying them now. In fact, it would have been best if you were paying on them during college to help keep the interest down. But either way, start making the minimum payments on all of them, except for the smallest one.
Why is that?
Your smallest loan should be bombarded with all of your financial weapons! Start paying extra on that one. This includes any extra money you make from a side hustle! Work towards making that one disappear.
The choice of where you live will affect your student debt.
You just graduated. Your whole life is before you. You are finally out on your own, perhaps for the first time! Your focus, if it is anything like mine was, is finding a place to live. Now it is important to find a house or apartment; however, you need to also consider your financial position. It is crucial to factor in your budget the payments on your student loan before you pick out a house- not the other way around.
Some of the best advice I can give to young college graduates, especially ones who are getting married, is to first figure out what your debt payments are and then add 30% in order to start knocking out those loans. Next, factor in all your other bills, and then you can determine what house you can afford.
Here’s the deal. It’s not a smart choice to choose an apartment or house that is out of your price range- even though it may be super cool. It is worth the wait. Eventually, the amount of interest you would be saving over the lifetime of your loan could probably buy you a pretty good sized house!
Blood, Sweat, and Tears
Creating a budget and paying off debt is great, but in order to do either of those, you have to make money. And making money requires hard work! Saving can help pay off your debt, but you also need to work hard in order to destroy your loans! Hustling can be a challenge and might not always be fun, but the freedom you will feel when you are debt free is a freedom like no other! Trust me.
So do that second job, mow that neighbor’s lawn, and sell everything that you don’t need! You are at a perfect place in your life to live like no one else will so you can live like no one else does later!
Put all that extra money toward your debt!
Ultimately it’s up to you
No matter how many blogs you read or how much advice you receive, ultimately becoming debt-free falls on you!
This wasn’t written as an insult to those who have gone to college and racked up loads of debt. I was there myself. But I want you to see the glimmer of hope that comes after you continue fighting the battle of student loan debts!
You can do it BUT you have to WANT it!