Even with timely minimum payments made towards it, student debt has the potential to work against your finances. In fact, this debt can unfold into years of limited financial freedom and a high risk of a damaged credit score which begs the question- is it worth it? Well, it is. Considering that student loans help leverage the majority’s access to quality education, an education that would secure them a decent job and a better, brighter future, we’d say the juice is worth the squeeze.
Effective Practices To Speed Up Student Loan Elimination
While student loans are a life-saver, paying them back can be incredibly overwhelming, especially for the average adult burdened with multiple financial responsibilities. Then again, defaulting on your student loan repayments can mean getting blacklisted from the credit, hefty fines, and lowering your credit score; ultimately, debtors have no other way around but to pay what they owe. Although the question remains, how does one come around to doing that while balancing every financial obligation under the sun? We’ll tell you. By being intentional with your loan elimination and adjusting your daily money habits. We highlight five daily financial practices that can speed up student loan repayment.
1. Have A Budget
Creating a budget will save you from impulsive spending, so ensure you draw up those expenses to the penny. Figure out how much you spend in a day, from gas to your daily coffee and lunches, and allocate just enough to cover those expenses; this will help ensure that you carry only what you need, leaving no room for unplanned spending.
2. Adjust Your Lifestyle
Do you have your daily budget in check? Good. Now it’s time to make some lifestyle adjustments. Start by listing your needs and wants and then prioritize the latter. If you’re looking to save up for those monthly student debt payments, options like downsizing your home or car will get you more significant cutbacks to channel into the debt clearance. Alternatively, simple adjustments like a jump to energy-saving bulbs and appliances or renting out that extra room in your home would help you pay more than the minimum monthly payments.
3. Make Sacrifices
You don’t have to stop there; take it up a notch by taking up a second job or side hustle to bring in extra income. This could be anything from grocery delivery to freelance consultations. You can also cut back on areas of your life by tweaking and compromising. Say, switching up that bougie gym membership for a home workout? Or missing out on that Starbucks treat for a homemade serving of caramel frappe? Actions like these should cover the seepage amassing you hundreds of dollars to bump that loan payment for speedy clearance.
4. Track Your Spending
Setting up your budget is only half the job done; sticking to it is the real work. Ensure you remain disciplined throughout your financial journey by tracking your daily spending. We’d recommend utilizing apps like YNAB to stay on top of your day-to-day expenditure and saving goals. This app also gives you a monthly and yearly overview of your finances while keeping you updated with due payments, financial literacy resources, and tips. It will build your discipline and fortify your sense of accountability.
5. Freeze Your Credit Card
Credit cards can be quite a resource; however, one has to stay wary of them as they can quickly drive you further into debt. Whether juggling one too many or battling that single student loan, it’s always advisable to avoid piling more onto your plate; how can you achieve this? You don’t have to worry about accumulating more credit by freezing your credit cards. Think about it. With your credit card accessible, fighting the urge to swipe away with every purchase urge only gets more challenging. Conversely, when you have zero access to that luxury, you learn to make do with what you’ve got on hand.
Wrapping Up
Clearing student loans is not the easiest feat; people spend years committed to this obligation yet still come out financially beaten down. Does this mean it’s impossible to shrug this debt off? Quite the opposite; shedding off student loans is feasible when you have the right tools. With these five habits incorporated into your daily life, wiping those student loan payments begins to feel a lot less weight, and you spend half the duration, if not less, to clear out your student loan. The key is staying disciplined and focused on the goal; and, remember to celebrate the small wins as you get on this journey. Good luck!