How To Pay Off Your Student Debt
Graduating with a degree or a Master’s has many benefits and will give you many advantages in your life to come.
But along with the feeling of achievement and the obtaining of a qualification that will help you embark upon your chosen career, most will also be experiencing the burden of student debt.
Taking out a loan to make it through college is now a reality for all except those from wealthy families or who manage to find a well-paid part-time job that will somehow cover all of their tuition fees and living costs.
And although theoretically you don’t have to pay back your student loan until you’re earning over a certain amount and can therefore afford to do so, in reality no-one likes living with a sizeable debt hanging over them, and the pressure to pay it off becomes greater with every passing year.
1. Making a plan
So how do you go about paying off your student debt? The first step is to make plans that will enable you to start paying off your debt right away, rather than putting it off until some nebulous day when you think you can afford to do so.
Regular payments, no matter how small, will chip away at your debt, and are a much better idea than waiting till you can make a more substantial repayment.
2. Set a budget
Write down your monthly income and take off your fixed outgoings, like rent and taxes. Now start keeping track of how much you’re spending each week, and tally it all up at the end of each month.
Group your expenditure into categories, like groceries, utility bills, clothing, eating out and so on.
Now set a budget for how much you can afford to spend each week, based on your monthly income, and stick to it. For quarterly or irregular bills, set aside a small amount each week towards paying them when they arrive.
One idea you might want to consider is the 50/30/20 budget. This involves allocating 50% of your disposable income to essentials, like food, 30% to things you want, like nights out, and 20% towards your savings, or in your case, paying off your student debt.
If this works, you might want to consider tweaking the balance and putting 30 or 35% of your money into paying off your debt so you can achieve your goals faster.
3. Stay focussed
This kind of self-discipline is hard work, and it’s going to involve a certain amount of sacrifice.
Not being able to do so many fun things, or buy treats to cheer yourself up, will make it hard to stay on the straight and narrow.
To keep yourself motivated, think about what you’ll be able to do once you’ve paid off your debt. Having a clear goal in mind will make going without occasionally seem more worthwhile.
4. Invest some of your savings
While you should still be paying off your debt directly on a regular basis, you might want to consider investing any spare cash into stocks, bonds and cryptocurrencies like bitcoin.
A balanced portfolio containing a mixture of different asset types is the best way to protect your investments against market volatility and hopefully come out with a decent overall profit.
Mybtcoophole is a trading tool for investors that specialises in the bitcoin market.
This commodity has soared in value over the last decade and is an ideal hedge against other currencies or company shares.
5. Find a side hustle
Once you’ve left university, you’ll be faced with several different options. You’ll probably want to work hard getting a foothold in your chosen business sector, but this may mean that you’re not immediately earning huge wages.
While at least there’ll be no official pressure to pay off your loan right away, getting another job on the side will let you make voluntary repayments that will see it start to diminish quicker.
Ideas for profitable side hustles might include freelance writing, Uber driving, letting out your home as an Air B&B, or private tutoring.
Self-audit and make a list of your skills, ability and knowledge. Try to find a way that you can use these to make a bit of extra money on the side.
Finally, keep up the payments whatever happens, and as you earn more, pay more.
Getting rid of your debt as soon as possible will free you up to follow your dreams and will certainly improve your credit rating.
Even just reducing it down to a manageable size, while knowing that you’re gradually paying it off, will make you feel so much better.