There are loads of ways to deal with paying off your student debt. Some prefer the long game: paying as little as you can each month in order to maintain your lifestyle. But for those who are just too bugged by being in debt and are willing to undergo a massive (but temporary!) lifestyle shift in order to have done with student debt once and for all, following this guide is the way to do it.
1. Super Restrict Your Spending
Most of us have a necessity budget and a luxury budget, but for the extremist debt warriors out there: throw out your luxury budget! Your new luxuries are free luxuries. That means no more going to the movies or eating out or buying new clothes that you don’t need for work. Instead, relax by going for hikes, finding free concerts and shows to check out, getting into cooking at home and maybe even growing your own veggies. Dating-wise, try a romantic picnic at sunset instead of a fancy restaurant.
2. Sell Your Stuff
Can you sell your car and get around by bike and public transportation? That will not only get you a chunk of cash to put towards your loan principal, but will save you gas money and insurance payments. If you’re not in a position to sell your car, consider trading in for a car that you can learn to do your own repairs on, like the Ford AX4S. Conversely, if you’re already a cyclist, do you have more than one bike? If so, sell your nice road bike and hang on to the commuter: on top of the excess cash, taking on big hills on a heavier bike is guaranteed to make you 30% more rugged. Sell any appliances you can live without, like your microwave or trading in your nice speakers for a junkier pair.
3. Knock Out Your Private Student Loans Before Federal
Interest rates on private student loans are way higher than on federal ones. So all that extra cash you’ve just saved/generated should go directly towards your private student loans before you dig in on your federal loans.
4. Get Housemates
Okay, so giving up your privacy is no picnic, but remember: it’s only temporary. You’re taking the fast and furious approach here so the more people you can pack into your house or apartment, the better. The best part is that it’s such an easy way to save cash: you aren’t sacrificing any of your time, which really is the most valuable thing any of us has. Depending on where you live you could end up paying as little as $150 to $200 per month in rent. Another option is to move back in with your parents for a while.
5. Leave Retirement Accounts Intact
This may seem like a good idea, but you’ll end up losing close to half of the amount you withdraw in early withdrawal fees and taxes, so it just isn’t worth it. It also doesn’t make financial sense to stop contributing to your 401(k) IF your employer is matching the amount you put in: stopping your contributions will just be throwing that extra cash away.
For more assistance with getting your debt under control, contact a student aid organization that can help you manage your debt.