Paying student loans can be daunting and stressful. In college, I felt the burden of my student loans every day. Even when I was walking around campus, I could feel the weight of my debt on my shoulders.
The first thing you need to know about this pay off process is that it starts with a mindset shift. I was able to pay my student debt off in a year because I was determined and eager to get rid of my loans, which put me in the right mindset. I was willing to stretch myself, work hard, and say “no” to anything that didn’t support my end goal.
Here are practical tips to help you pay down your student loans:
1. Set A Monthly Budget
I know this can be difficult, but it’s crucial. You need to know where your money is going each month. Once I graduated from college and got a job with a salary, the first thing I did was budget how much money I would put towards my loans each month, and then I budgeted everything else around this number.
2. Put More Money Down
The way to pay down your loans faster is by putting more money down than your minimum payments. My minimum for my loans at first was $120. When I could, I put down $500+ more than the minimum payment depending on the month.
3. Tackle Smaller Debt First
Dave Ramsey calls this the “Debt Snowball Method”: you pay down your smallest loan first and put extra payments towards it each month while making the minimum payments on your bigger loans. When you pay off that first smaller loan, you will feel a freeing sensation, helping motivate you to continue on your debt-free journey.
I highly recommend Dave Ramsey’s book, The Total Money Makeover, if you want to learn more about budgeting and paying off debt.
4. Prioritize and Learn the word “NO”
At first, this is hard, especially if you have FOMO (fear of missing out). Knowing you are going to put most of your paycheck into paying off student debt is not easy. Saying no to going out with friends or going on fun trips is hard, but in the end, it is worth it. Remind yourself this is only temporary until you pay off your debt. You can always find other creative ways to have fun with friends, like hosting your own happy hour or doing free activities in your town.
5. Start a Side Hustle
On top of working my full-time job, I was also running a photography business part-time on weekends and nights. This wasn’t enough money to make a massive difference in my budget as the pay was inconsistent, but I could use this money as “fun money” to go out with friends or get a coffee at my favorite local shop. Think about a side business you could start to add some extra money into your budget each month.
6. Shop Second-Hand
You’d be surprised how much money you can save when you buy clothes and items second-hand instead of brand new. Before you run to the mall for new clothing, check Goodwill or Savers first. My tip is to go to the second-hand shops in more affluent areas of your town/city because they have nicer clothes. If you need furniture or other household items, check Facebook Marketplace! I have gotten some fantastic finds off Facebook that have saved me hundreds of dollars over the years.
7. Utilize Rewards Apps
Another way I had and can still have fun money in my budget is by using reward apps such as Rakuten and Ibotta. Rakuten is an app and browser extension where you get cashback when you shop at certain online stores. You get paid to shop! I utilize Rakuten the most during the holidays and love receiving my “big fat check” in the mail. I use Ibotta every week for groceries. You can get cashback or gift cards for buying groceries and just shopping; how amazing is that?
8. Utilize Coupons & Discounts
When I would go out to eat with friends or do activities, I was able to be frugal by utilizing coupons, coupon codes, specials or deals, and Groupon. With friends, I would always suggest going out to dinner right after work to utilize a restaurant’s happy hours where certain food and drink menu items were discounted. This saved me a lot of money. To this day, I still use coupons and Groupon for dining out. Groupon is also excellent for going out and doing activities. I’ve used Groupon for wine tastings, ice skating, a helicopter ride, and facials, to name a few.
9. Cut Unnecessary Monthly Expenses
Do you use that gym membership you pay for every month? How often do you actually use that streaming service you are paying for? Look over your monthly expenses and see what you can cut from your budget. What do you really NEED (“need” being the keyword here)?
10. Friends and Family Support
Making sure you have a good support system behind you during this time is important. Let your family and friends in on your goal of paying off your student loans early. Not only does this make your goal more real to you, but it can be helpful having people cheer you on throughout your debt-free journey.
11. Move Home (if you can)
This can be tricky depending on your current situation. Some of us can’t move back home with our parents after college, but if you have a healthy home life and your parents are willing to let you live with them, do it. I did this after college and boy did it make a difference. Not having the weight of monthly rent helped me put more money towards my student loans each month.
Disclosure: I did not bum off my parents. I made sure I was pulling my weight by cooking meals for my family once or twice a week, grocery shopping for my mom here and there, cleaning around the house, and driving my younger brother places.
12. Keep Your Car
After college graduation, many of my peers bought new vehicles once they got a job. I was tempted to buy a new (used) car after graduation, as my 2001 Prius could only do so much, but I decided to keep my car because it was practical, had excellent gas mileage, and did I need a newer car? No, but it was tempting to buy one. If your car still runs and gets you from place A to B, don’t upgrade until you pay off your debt. If you need to buy a car, use cash to buy a used one.
13. Reward Yourself
I told myself when I finished paying off my student loans I would reward myself with a new Dooney & Burke purse. Besides the financial reward of paying off my loans, I was looking forward to buying myself this item after a year of sacrificing my wants. This Dooney clutch was only $50 on sale, so it wasn’t a crazy $500+ purchase, but I think of it as my victory purse.
I hope you found these tips helpful in your journey to paying off your student debt. I didn’t do anything fancy like refinance my loans or create a ton of side hustles, but I put my head down and did the work. If you use any of these tips, let me know, or if you have any additional money-saving tips, I’d love to hear them!
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