Student Loan Stress: 10 Steps to Manage As You Pay
Student loan stress is a very real thing, and it can cripple your optimism and enthusiasm for the future. With many students stepping fresh out of college with the equivalent of a house payment to pay back — something that takes the average American 30 years to pay back — it’s no wonder.
After all, house payments can be shed fairly easily before the 30-year term is complete. You can’t get rid of a student loan. It follows you around. But you don’t have to let it run your life. In the following article, we’ll be discussing the ways that you can manage your student loan stress and get on with living life, regardless of whether you can pay it off early. Let’s begin!
1. Know Your Freedom Number
A freedom number is often referred to in the business world as the earnings you would have to make to replace an existing job. In the student world, particularly as student loans are concerned, it’s the amount of money that you’ll need to make to pay off your loan entirely.
Because that’s impractical, we want you to start thinking about your freedom number differently. Focus only on the monthly payment. What will you have to earn to make that each month? If it’s a fixed-rate loan, as most student loans are (and is recommended), you can just work it into your normal budgeting. Either way, factor in no more than $175-$250 per month. That’s not as difficult to come up with as you might think.
2. Take Your Time
The pressure you put on yourself to pay student loans as soon as you can is detrimental to your health and well-being. Ultimately, you want to focus on building cash reserves, so you’re not subject to living on credit and digging yourself into a deeper hole.
For that reason, you really should take your time paying off the loan. If the repayment term is 15 years, as many student loans are, use the full term to pay it off. Pay attention to the historically low rates we are now experiencing as well. If you can refinance the amount you owe to lower payments at a certain point, do so but only if you’re having trouble making the payments.
The more installments you get under your belt, the less interest you’ll pay over time and the quicker you’ll be out of debt. But there’s a lot to be said for lower payments as you go. After all, you can still make larger-than-minimum payments as able to make the loan go that much faster.
3. Get a Job
Of course, you’re going to need a means of paying for the student loan, and a full-time job is a great way to do that. It may not be the best job in the world, but if it pays better than minimum wage and you’re able to keep your living expenses low, you’ll be in a good position to decrease the amount owed quickly.
4. And a Side Hustle
Side hustles are becoming more popular because they’re easier to get. Many can even be work-from-home opportunities. Twenty years ago, these were not in as abundant of a supply, but today you can find a lot of opportunities through sites like Fiverr and Indeed.
While some side hustles can pay less than minimum wage, you’ll be able to find your way to the better paying gigs as you gain more skills and experience. Consider sideline careers in copywriting, graphic design, data entry, and virtual assistant work to get started quickly.
5. Take Care of You
There is a danger of pushing yourself too hard in the journey to pay off your student loans. We wouldn’t recommend it. You can’t make your life all about blotting out that debt or other aspects of your health and quality of life will start to go.
Make it a real priority to take care of yourself as you face your student loan. Eat right, exercise, buy yourself the occasional reward, but don’t splurge too heavily or frequently. When you do, though, make sure you’re doing it guilt-free.
6. Think Creatively
Jobs and side hustles aren’t the only way to eliminate student loan debt. You can get creative with the options by starting a crowdfunding page or trying out new services like this one.
You also could ask friends and family to start making payments toward your student loan in lieu of Christmas and birthday gifts. There are many ways to get creative if you’re willing to do it.
7. Make a Budget and Stick to It
Many students are unaware of how much they’re losing in income that could go toward paying off their debts because they do a less than optimal job budgeting. The simple act of keeping tabs on what you’re spending can turn up a number of opportunities to help pay your student loans.
Another thing to consider is restructuring your bad debt. Student loans are not considered bad debt. That’s because it gets you an education and guaranteed earning power above that of a high school graduate or dropout. The interest rates are subsidized by the government as well (usually), and that makes it one of the cheapest loan payments and best terms you’ll ever experience borrowing money.
Bad debt is high-interest credit cards, that sort of thing. Try not to get into it, but if you do, a budget will help you pay your way out.
8. Do Not Beat Yourself for Veering Off Track
Stick with the plan as much as you can, and you won’t feel the pain of those days when you get off track. Just make sure your splurges aren’t so large that they erase any gains you’ve made.
We all need a break sometimes. In fact, that “break” can be the impetus to reignite your decision to save and live more responsibly. This will always result in a net financial gain.
9. Realize the Worst Case Scenario Is Not the Worst That Could Happen
So what if you need a forbearance from time to time or you take the full 15 years to pay off your debt. Just live one day at a time, and we guarantee you the “worst-case scenario” won’t be anything to worry about. You’ll eventually get to where you want to be if you’re making one payment at a time and focusing on improving your station in life every other day.
10. Find Your Support Unit
This could consist of friends and family members. It could be groups of other students who are stressed about their student loans. Find a tribe who can keep you accountable and understand your trials, and you’ll be able to handle the frustration that wells up to the surface.
Student Loan Stress Does Not Have to Rule Your Life
Student loan stress is understandable, but it shouldn’t consume your life. Use the techniques we’ve presented here, and you’ll be well on your way to dealing with the pressures to come successfully. Good luck on your journey, and please share any tips that you’ve found helpful in managing student loan stress in the comments section below!
[Featured Image by Money Talks News]