Make no bones about it. If you have student loan debt, then you have much less money than the rest of Americans. While the student loan crisis picks can pick on anyone, it’s a reality that millennial’s it way worse. Student loan debt has recently reached $1.53 trillion. Most of that has come within the last decade.
We have that much debt, it’s going to hurt you and every other facet of your life. How can you save money when you have monthly payments nearly as high as your rent? How can you get a mortgage or car loan when you’re $50,000 in debt? The simple answer is: you can’t. And worse yet, how can you afford to save money for emergencies?
If you’re millennial who carry student loan debt, you have 46% less money than other millennials who don’t have debt. Millennials with student debt at $19,000 less in their retirement savings than those who don’t. Millennials with student debt have much less money and their checking and saving’s account than those who don’t.
This gap between the haves and have-nots is pretty shocking. You’d assume going to college was a great idea for taking the next step in life. You’d believe that you’re setting yourself up for a great future and to have more money for your family. But the way things are going, that’s not the future for a lot of people who go to college.
To learn more about student loan debt and the options you have for paying it off, call Financial Helpers today! We’d love to hear from you. Call us at:
Don’t Let Student Loan Debt Take Over Your Life
If you have student loan debt, these monthly payments take a huge chunk out of your income. You have to figure out a way to save money. You could be paying your student loan debt for a decade or more. This is the age where you have to start saving for retirement if you’re going to make it in your golden years.
You need to start saving for a down payment for a house if you want to start a family. And more importantly, you need a healthy emergency fund in the event that something happens outside of your control. Without that, you can rack up thousands of dollars of debt on top of your student loans.
The goal is to have at least three months of living expenses in your bank account just in case. But, how can you manage that if most of your monthly income goes toward your student loan debt? Here are three things you can do right now to help save money for the future:
1) Get a Side Gig
It’s understandable that this isn’t the best option for a lot of people. But, an estimated 44 million people have a side gig. They have to. There’s no other choice to get through life than having an extra source of income. Imagine driving for Uber a few nights a week and bring in an extra $500 a month.
That’s enough to pay for your student loan debt, freeing up the rest of your income. Or it can go directly into your savings account. You can have as much a $6000 saved after your first year. Work a few hours a night bagging groceries. It doesn’t matter what you do, but you have to work a little harder for a while and make more money.
2) Refinance those Loans!
This option won’t be immediately available to you after you graduate. Going to have to put a little work in. You see, when you start college and you have little to no work experience, your credit score probably isn’t that good. That means banks or other financial institutions are going to rake you over the coals bit.
The amount of interest that you’re paying, including the amount you pay back each month, is directly impacted by your credit score. Now, imagine a few years after you graduate, you’re doing better. You have a great record of on-time payments, you have a great job, and your credit scores improving.
At this point, you can refinance your student loan debt. Not only will you get a lower interest rate, but your monthly payments will be less as well. Imagine getting a car loan with bad credit versus the car loan with excellent credit. If you have bad credit you to pay through the nose because creditors can’t trust you. It’s the same way with student loans.
3) Find a Way to Lower Your Costs
Of course, this is easier said than done. We all want new things. We want to have cable, fast internet, to buy our first home. The problem is, people with student loan debt can’t really afford it. So, what they do is, put themselves at greater danger by taking out more loans. Millennials like to indulge on fancy things they probably can’t afford.
If you can find a way to pick up an extra job and lower your expenses, you’re well on your way to paying off your debt faster. Instead of buying a house, split the rent and bills with a roommate for a few years. Use Netflix instead of wasting hundreds a month on cable. Use public internet. Don’t buy or lease a brand new phone every year.
Make smarter spending decisions. Put all that extra money into your loans and pay them back faster so you can get on with your life. If you don’t, you will only set yourself up for failure. Going into default because you can’t afford your student loan debt will destroy your credit. Be smart and think ahead in all things.