We all deserve a little luxury in our lives, especially with short days and the chill of winter upon us, this is the time of year when we could use a little pick-me-up, the glowing warmth of a little bit of pampering to get through the solstice. But it’s tough to relax when all you can think about is getting your student debt under control. With these top personal finance tips you’ll be able to have your cake and eat it too.
1. Start An Emergency Fund
It’s smart to start saving right away, even if you can only spare a small amount of money to stash away each month. First of all, it gets you into the habit of saving and also even small amounts add up quickly so long as you stay consistent. When you’re starting out in your career, you might need to make several job changes as you find your way, sometimes choosing to sacrifice pay scale for a good learning experience. With an emergency fund, you won’t have to fall behind on your student loan payments while you sort yourself out.
2. Begin Student Loan Repayment As Soon As Possible
While it’s sometimes smart to take advantage of your student loan grace period in order to get oriented to life after school, you basically want to start repayment as soon as you can. For one thing, it’s absolutely crucial that you stay on top of your payments to avoid default and you’ll be well served by gleaning as much info about personal finance as you can. Plus, if you’re aiming at eventual loan forgiveness, the sooner you start your consecutive on-time payments, the sooner you’ll be off the hook.
3. Don’t Buy A House
You’re already stuck with a big-ticket debt; you don’t need to go adding to it with a mortgage. It’s best to wait until you’re more financially solvent before taking on a home loan; ideally, you’ll have your school loans paid off by then.
4. Used Cars Only
It’s downright foolish to buy a new car. As with most consumer goods, new cars depreciate incredibly quickly in value the moment you buy them. Used cars are always the better deal, provided you shop around. Also, you’ll want to purchase your car in cash if possible and avoid an auto loan; with auto loans you’re paying interest to buy an item while its value is going down.
5. Create Savings Goals
The key to budgeting is discipline. The sooner you can get yourself into the habit of coming up with savings goals and following through on the them, the better off you’ll be.
6. Tax Education 101
The better you begin to do financially, the more savings you’ll find by being tax savvy; tax incentives and deductions can be a huge help. Remember to check out the student loan interest deduction.
7. Avoid Buying On Credit.
Much as with auto loans, you don’t want to be paying interest on items as they loose value, which they do as soon as you own them. The more you can pay for things in cash the better and you’ll avoid the temptation of racking up a ton of credit card debt. As for establishing credit, your student loan payments can accomplish that for you – finally an upside, right?
8. Be Frugal
It may sound obvious, but it can really be a challenge. Everything in our culture screams “BUY, BUY, BUY!” It’s just so easy to spend money. By staying mindful, you can keep your lifestyle simple and stay on top of your student loans.
These tips can work wonders in helping you make some progress sorting through the chaos of your personal finances and student debt, but if you still find yourself in need of some expert assistance, there are student aid organizations that specialize in helping students manage and optimize student debt.