Combat Student Loans with an Austerity Mindset
July 9, 2013

If you’re like many college graduates, you’re trying to balance paying your student loans with modest earnings while also coping with credit card debt, rent and all of those expenses that come with adult life. With an average student loan debt of $27,000, your monthly payments will be around $310. If this is pushing your budget to the max, rather than giving up on your student loans and letting them fall into delinquency or continuing to live on the edge, why not change your mindset? Consider austerity as a viable solution to conquer your debt once and for all.

Rent.com conducted a survey late last year that revealed that 75% of renters aged 18-24 outspend their earnings every month. And a recent Ohio State University study showed that this generation is racking up record credit card debts that may haunt them into their old age. So what’s to be done to help this generation?

An austerity movement could be a game-changer for this generation. In fact, most of America could use an austerity resurgence. Unemployment is plaguing people of all ages, many with student loans they’re struggling with into their 30s, 40s, 50s and even into retirement. It’s not just younger generations saddled with maxed out credit cards – far too many of us are living on credit with little or no savings. Austerity could fix a lot of these ills.

The main tenet of austerity is identifying what you want versus what you need and only spending on absolute needs. For many people, it may be a struggle to understand the difference between these two and to accept that you can do with less without impacting your lifestyle terribly. Food, clothing and shelter are the basic things you need. But your wants may influence even these basics to where you indulge in eating out at nice places, buying designer clothes and living in a house or apartment you really can’t afford.

Here’s some austerity considerations:

$ You don’t need cable TV – you can make do with a digital antenna and save big money.
You don’t need a new car – you may not need a car at all depending on the distance between where you work and live.
You don’t need to buy books or DVDs – the library has stacks and stacks you can enjoy for free.
You don’t need to buy music – Pandora Radio is free and available on most any device.
You don’t need a gym membership – take a walk or a run, do sit-ups and push-ups at home.
You don’t need a new smartphone – if your contract is up, switch to a monthly Boost-type plan and cut your bill down by 2/3 with no loss of services. 

You don’t need new clothes – try consignment shops or thrift stores and only if there’s something you can’t do without like a winter coat or clothes for work.
You don’t need to eat out – learn to cook and then learn to do it cheaply and you’ll be good.
You don’t need alcohol – booze is expensive and isn’t good for you anyway. Just say no.
You don’t need a bachelor pad – find several like-minded cheapskates and move in together to save.
You don’t need your own place – if your parents will let you live in the basement for free, you’re a fool to pass it up.
You don’t need to go to concerts, movies or out dancing – you can have fun hanging out with friends at home.

If these sound severe, they should. Austerity is severe by definition. It will no doubt suck a little until you get used to the constraints, but once you’ve made the adjustment and can watch your debt diminish noticeably each month, it will be well worth it! And once your debt is demolished, you can open up your wallet a little and ease your budget. But hopefully once you’ve embraced frugality, it will stick so you don’t let your debt ever control you again!

To implement an austerity program that will let you conquer your debts and get your finances under control, look at your monthly expenditures. Save your receipts for a month to analyze and then sort them into stacks of want and need. You’ll likely be surprised at how much larger the want stack is than the need pile. Once you have these sorted, consider each item and how you can reduce or eliminate it in order to gain financial freedom and beat your debts.

Here are some great websites where you can get tips on frugal living:

The Frugal Girl

Wisebread

Suddenly Frugal

The Non-Consumer Advocate

Frugal Babe

One of the things you must do to get control of your debt is to understand exactly what you owe, to who and what your payment responsibilities are. When it comes to student loan debt, Tuition.io’s free student loan management tool can keep you up to date on all of your student loans (public and private), lets you see repayment plan options and contact your lenders. Learn more about Tuition.io and how we’re helping borrowers deep in student loan debt.

If you’re ready to tackle your student loan debt once and for all, consider adopting an austerity mindset today. Also enjoy these related blogs on student debt repayment strategies:

Get Out of Student Loan Debt with These Two Simple Tools

Recovering from the Grief of Student Loans – 5 Steps to Help You Cope

5 Tactics to Avoid When Paying Off Student Loans

Is Pay As You Earn for You?