Spending habits while you’re in college can quickly get out of hand. It can be well worth it at the time: college offers many once in lifetime experiences, particularly if you take advantage of study abroad programs. In our efforts to savor these experiences and squeeze every last drop out of life, we fall into spending habits that quickly stop making sense after graduation. Now it’s time to stop living off of financial aid and start repaying those student loans. In order to do so, it’s necessary to make a number of lifestyle shifts and actively change the way you think about money. Don’t fall into the usual traps; check out the list below.
1. Not Adjusting Financially To Life After College
When you enter the real world and have to start living off of your own income, it’s necessary to work out a strict budget. You just can’t spend like you did in school, being careless about how much you spend, where that money goes and cutting yourself a lot of financial slack for the benefit of the full college experience. Without financial aid and mom and dad to rely on, you’ll have to keep careful track of your income. There will also be any number of financial areas you aren’t used to dealing with that will crop up, like paying taxes. Try keeping your expenses to a minimum as you learn to adjust.
2. Being Blasé About Due Dates
This might work in school but it can really mess you up financially in the real world. Organization here is key. You need to pay close attention to when bills are due so you can make your payments on time and avoid excess fees. This is very important for your student loan payments as well; many borrowers who default don’t even realize they’ve missed payments.
3. Failing To Save
It can be really tough to save when you’re living hand-to-mouth but it’s very important. Keeping to a well-planned budget will allow you to do this as long as you’ve committed to make saving a priority. You never know what might happen and it’s critical to have some money to fall back on. Even if it’s just a little bit at a time going into a savings account, if you stay consistent, it adds up.
4. Living Beyond Your Means
This is such an easy trap to fall into and it is a huge mistake. In our consumer culture our senses are inundated every day with stuff we are encouraged to buy. You don’t need it! And it will save you in the long run if you can resist the temptation. For instance, anything electronic comes out with an upgrade every two minutes; don’t upgrade your iPhone when the hardware on your old one is still perfectly good.
Also, within your budget, try separating out the necessities from the luxury items. Then allocate a part of you budget for luxury; that money is there to indulge your inner child and it can go toward the fluffiest fluff you can imagine. But all kids need boundaries and that’s where your budget comes in.
5. Taking On Too Much Debt
This is a result of the above two mistakes and it’s another one that’s far too easy to make. However, if you can manage to save and live within your means there’s really no reason to accrue any debt on top of your student loans. Smaller items and monthly expenses should all have a place within your budget and bigger ticket items are what your savings is for; this way you’ll be paying for everything in cash and not adding to your debt.
One of the most burdensome and large items in your budget is likely your student loan repayments. The key to staying on top of student loans is good debt management. If you’re struggling make payments, don’t hesitate to contact student aid experts who can help you optimize your debt.