How to Avoid Student Loan Debt
For most students, life before college was a life filled with school, homework, and activities. Sound familiar? If so, you most likely had little time to yourself, which meant that decision-making wasn’t a big part of your life back then. Fast forward to your college years, where freedom reigns and there are new choices around every corner. Exciting, right?
Once you graduate from college, though, you’ll find yourself entering the real world where decisions have to be made about where to live, how to live and where to work. The biggest factor that will determine the answers to all of these questions is how well you’re doing financially. That’s right, having to wrestle with getting your finances together is essential if you want to start off on the right foot and set yourself up for a lifetime of success.
Set Up Your Budget
So many things are new right after you graduate from your college or university. It’s a time of great change as you go job hunting, look for which city you will live in and decide on your rental and living arrangements. As you start to plan your post-college life it is really helpful to create a budget so you can see how your finances fit your plan. You can take your monthly income and subtract all your expenses such as rent, utilities, transportation expenses, loan payments and insurance. You’ll also want to include your monthly budget for food and entertainment. If you set all this up in a spreadsheet you can quickly update it and run what-if scenarios as your situation changes.
Refinance Your Student Loans
As you go through the budgeting process, it’s likely that your monthly student loan payment will really stand out. Student loan debt is a significant and growing issue for those completing their education. At the moment the average student loan debt per borrower is well over $35,000. In order to get control of your student loan debt you should carefully evaluate your options for refinancing from a reputable online lender. By doing this, you can substantially lower your interest rate and potentially save tens of thousands in interest paid.
Learn to Cook
It’s interesting that one of the best things you can do for both your budget and your health is to learn how to cook. The amount spent each month on food and meals out can be dramatically reduced if you prepare your meals at home and use fresh ingredients rather than purchasing processed, prepared and take-out food. Go looking and you will find affordable cooking classes in your community so you don’t have to be a Michelin star chef cook to become really good at mixing spices and putting amazing dishes together. By learning this skill early in your adult life, you will save thousands of dollars year after year. You can also get an espresso machine if you want to save lots of money by making your own custom coffee creations.
Get a Side Hustle
The Internet has changed the way we work with most people choosing not to work for corporations their whole life. One of the best things you can do after college is to find a side hustle that brings in revenue each month. If you want to make this even more powerful, take half the money you earn and put it in a rainy-day fund and take the other half and put it toward retirement. By leveraging the power of compounding, a college graduate who saves just $3,000 each year for the first 10 years after school and has an annual return of just 8% will have a retirement nest egg of over $435,000 at age 62.