Thank you Navient for sponsoring this post.
When I began my college search, way back when, I already knew that I would need to take out a school loan to help pay for a portion of my expenses, especially if I wanted to live at school. I wanted to keep my costs down so I chose a state school – Rowan University in New Jersey. Student loans helped me cover the cost of college.
While my state school had a great value, room and board put it over my budget and I had to take out loans to pay for everything. It was worth it. But when I graduated and got a job, new goals started to appear on the horizon. Goals like graduate school, moving out of my mom’s house, a new car and travel.
I decided to plan out how I was going to pay down the loans before I embarked on any new goals. I used certain tactics and strategies that helped me repay my loans. It involved making a plan and sticking to it. I decided on a set amount to pay back each month – taking advantage of the fact that I was living at home, without paying rent, and working. I even found that within this budget of paying back the loan, I was able to pay for graduate school and put myself through a 2-year graduate program, while working.
To plan out your goals, take a look at the big picture and decide what your long-term goals are. You can use a planner sheet like the one I did.
Identify steps and/or obstacles in your way and what your vision (big picture) is.
From there, develop a list of steps that you’ll take to reach that goal.
Most importantly, stick to it and track your progress on a graph chart showing how much you have to go to save or payback.
Using a simple planned budget, I paid my loan back within 5 years of graduation. And that’s a good feeling. Here’s how I did it:
- Start by establishing a monthly budget. Take a look at all your expenses and determine how much you have for savings and for your loan repayment. I should note that I was fortunate enough to be living at home after graduation and this was rent-free. My loans were also only the cost of room and board for 4 years, so it was not the full cost of my college education.
- Stick to a Loan Repayment Amount and do not defer. My loan offered me the opportunity to defer payment while I was in grad. school. I chose not to.
- Make Double Payments. I chose to make double payments when I could afford to. I had a side job and when it paid well, I made double payments. This paid towards my principal and helped me pay the loan off faster.
- Resist the Urge to Spend. Often, when you graduate college and get your first job, it can feel empowering to receive a paycheck every month. Many friends moved out to apartments in fun cities, bought high priced cars or vacationed a lot. I still had fun, but within reason. I opted to live at home and take more frugal vacations. I also took advantage of tuition reimbursement programs at work to help me pay for my graduate education so that it did not eat into my monthly budget as much.
- Put Extra Money Towards the Loan. As I mentioned before, if I had extra money, I made double payments. I often put income tax refunds, babysitting money and my side-job money towards my loan.
Aside from setting goals and tracking them, I took better care with the money I did have to spend. I had a couple side hustles when I was in grad school / working and paying back my loans. With this extra money, I would always sort it based on what I could spend, what I had to save and when I could afford to give. This is a great way to manage money or to teach to children.
If you want to create a plan for your money goals, download this form HERE.
Did you have school loans or are you thinking about taking one out? How do you manage your loan payment?
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Thank you again to Navient for sponsoring this post. All content and opinions expressed here are all my own.