If you are paying off your student loans and trying to save money for your future, you may feel burdened and you may think it is impossible to do. While it does seem this way, there are ways that you can do both without sacrificing too much of the things you love the most.
Below, we will go over some ideas and ways to help you both continue making your student loan payments and save for the future.
1. Make Yourself a Budget
If you do not know what you owe and when you owe it, how can you pay your bills? Many people blindly send money out every month hoping that they covered the amount of the bill and hoping they did not miss any bills that were due.
Instead of worrying, why not simply create a budget for yourself and utilize a calendar to help you plan better?
Making a budget does not sound like much fun, but it is extremely helpful. For example, you can take your monthly pay and then subtract your necessities and utility payments from it. The remainder amount is what you are left with monthly to divide up as you please.
Once you know the amount you have, grab a calendar and start writing in when bills are due and how much you want to set aside and when. You can then follow this calendar to help jump start your savings’ fund and pay down your debt at the same time.
2. Cut Out the Unnecessary
When we talk about unnecessary things, we are talking about things that you can live without such as the brand new sneakers that just released or going out to dinner and having drinks all weekend with friends.
The amount of money you will save is shocking in most cases. To help you better estimate how much you spend on these things, think about how much you spent last weekend on going out and then take that amount and set it aside this week. You will quickly notice your savings account grow.
3. Have a Strategy in Place
You should have a strategy in place to help you pay off your student loan debt. For example, maybe you want to pay off $10,000 by the end of the year. Therefore, set goals for yourself so that you know you are making progress. To pay down $10,000 in a year time, you will need to set aside roughly $1,000 or a bit less per month. You could even consider consolidating and refinancing student loans. Private student loan interest rates are difficult to handle. But most borrowers don’t know that they can refinance through private companies who offer much lower interest rates. Lower interest rates can help borrowers save money over the long term. Federal student loans are also eligible for refinancing but the savings won’t be as great.
Having a strategy in place will allow you to work towards it with an end goal within reach.
4. Be Realistic
One of the best things you can do for yourself is to be realistic when you start setting goals and also cutting things out. If you know that you will not be able to give up that $5 coffee twice a week, then add it into your budget.
The idea behind budgeting and strategizing is to help you reach goals easily, but if you are not able to stick to them, then you will ultimately not be able to stay within your budget.
5. Baby Steps Are Okay
If you feel that you need to take baby steps at first, there is nothing wrong with it. You should start slow to help you get into the right mindset. Sometimes, when people jump feet first into something and they are not ready for it, they cannot commit to it and end up failing. Don’t do this to yourself and progress slowly.
Remember, when you are saving your money and paying off your student loans, you can tweak your budget as you go. If you incur a new bill or you no longer have to pay for something monthly, you can adjust your budget accordingly.
If you want to save money while paying off your student loans, it is not as difficult as you think, but it will take some determination and will power to get it done. If you find that you are working on a plan, but it is not working the way you want, adjust it, try it, and stick with the best plan that works.
photo credit: charlywkarl Education concept via photopin (license)
I think number one is key. I didn’t realize how much money was slipping through my hand until I created our first budget. I had always had a budget but never updated monthly. I had a simple excel document that listed all my fixed expenses and I had pretty good “assumptions” on what we spent for food, gas, other non-fixed items. The true way to make the budget work is update it as you go through the month. This will really help you control your money and save while paying off student loans.