On the news there has been a lot of talk about the student loan debt "crisis." Students are taking out loans to pay for school, but many are unable to make the payments after graduating and supposedly finding a job. Here are some of my thoughts on how we could make this work better (Dave Ramsey's money suggestions have influenced this post):
1.Stop living outside your means
If you can't afford it, don't buy it, don't do it, don't charge it.
2.Don't go into more debt by using a credit card for ANYthing
If you can't make payments on the debt you already have, how are you going to make payments on more debt?
3.Have an ER Fund
Those six months you have before you have to start making payments, you should save up at least $1,000 for ER. ER are your car breaks down, you got really sick and the doctor bill was more than what was in the budget. ER are NOT concert tickets, new clothes, etc. (unless your house burned down, than clothes can be an ER)
4.Live by your budget
Don't have a budget? Create one & then stick to you. Tell a friend or family member a budget, tell them to threaten you if you don't stick with it. Whatever it takes, because when you tell your money where to go, a lot less of it disappears into thin air.
5.Work
Get a job, any job, and work your butt off at it, so you have money to live on. Yes, it may not be your dream job or even a job you enjoy very much, but if it's helping you pay rent, eat, save, & pay bills then work it!
6.Don't take out student loans
If you're still in school, just starting school, use as much as money as you have to pay for school. Work your way through if you have to because it will make your life so much easier in the end if you don't have to student loans (or even if your student loans are super small). I really wish that I had done of this...
7.Reduce loan payments
When you start paying off your loans, have them reduced to the smallest payments it just makes things a little easier sometimes. Look at the one that has the smallest payoff and throw all your "extra" money at it, when it's payed off take the amount you had budgeted for that payment and add it to the payment your making on the next smallest. It eventually is a lovely snowball that helps get rid of all your debt.
8.Work an extra job
Pick up odd jobs like babysitting, mowing yards, cleaning houses, etc. (I know it sounds like teenager jobs, but they pay). Or just pick up a second job and use that extra money to pay off your loans faster.
9.Have FREE fun
It's important to have fun, but since you're using your money for loans, look for free stuff to do. We have an art walk here in town the first Friday of the month, a beautiful nature center we enjoy going to, and we always enjoy playing games with friends. All free.
10.Bring people with you
Tell people about what you're doing. Bring people on the journey of your ups & downs of working towards paying off those school loans. They'll support you. Some won't, but who cares about what they think especially when you're done with your student loans before they are....
What do you think? Any ideas on how to get out of/stay out of debt? What can students do differently?
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