Tips to Pay off your Debt

Monday, May 18, 2015

While I am no financial expert, nor have I had to deal with extreme debt of loans. I have successfully managed to pay off a huge chunk of my student loans. I know the thought of graduation without a secure job seems scary; thankfully the 6 month grace period allows you to get settled before starting to chip away at the debt.

Here are some lessons I have learned while paying off my student loans.
 
1. Don't pay the minimum - I have increased my monthly student loan contributions by $50-100 depending on my current financial status. That is $25 more a week which equals out to roughly 5 trips to Starbucks, 1 dinner out with friend, 2 drinks at a bar (if you live in SF or LA). The first two months are a hard adjustment knowing you'll have to spend more, but if you calculate the long term interest on your full loans by increasing your minimum payment, you can probably save anywhere from a few hundred to a few thousand.

2. Find Alternates - Look at companies like SoFi that can lower your interest rate.

3. Eat In - Eating in and cooking at home can save you up to $300 a month!

4. Post Your Goals - Decorate a dry erase board and write your current Loans / Debt amount. Keep your goal somewhere easily accessible, and update it constantly. Reminding yourself you're making progress, and celebrating that progress makes paying off loans so much more fun!

5. Don't deprive yourself - Paying off loans or debt shouldn't be a punishment or stop you from living your life. Find free and cheap events to preoccupy your time. Concert in the park, rent books from the library, take a hike, etc. These type of things have been taken for granted. No need to spend $80 on a concert, or $20 on a new book.

6. Get down to the necessities - Ditch the cable and settle for internet and Hulu/Netflix, be conscious about your energy/water bill, reuse/donate/sell any unwanted items.

How do you cut down costs to increase your loan payments? I'd love to know!

xColl

1 comment:

  1. One might think having financial freedom is easy, but it's not. It's actually far from easy, as there are so many temptations that could lead to financially bad situations. Anyway, as far as your list goes, you've covered a lot of important points, and I love how poignant you are about the matter. Lots of netizens will be thankful you covered such a popular and delicate topic. Thanks for sharing that, Coll! Kudos and all the best to you! :)

    Naomi Cruz @ 4 Pillars

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