It’s still early December, so maybe you haven’t begun thinking about your resolutions for the new year just yet. That’s okay. Financial Helpers is here to help you improve your finances for 2019. More money is often right near the top of the wish list anyway. The problem is, student debt makes saving money difficult.
Managing our money and making tough financial decisions can be difficult, especially if you have student debt. We all want to live as large as possible! A lot of people find themselves living beyond their means. If they have student debt, it might force them to use their credit to buy the things they want.
As the debt piles up and balancing the checkbook becomes a strain, it’s good to take a few steps back and assess your financial situation. If it looks bleak, then you need to pull back some and set realistic financial goals. It’s the ONLY way you achieve the success you truly want. Overcoming student debt won’t be easy, but it’s possible. You have to focus.
All it might take is a few small steps to add up to huge results. In time, you’ll be able to regain your financial freedom and be free from student debt. In the meantime, give us a call! We’d love to help you overcome your student debt burden. You can reach us at:
Here are 5 financial goals you should be making for 2019 and beyond:
1) Reflect on Where You’re at and Plan!
You still have a few weeks until 2019 starts. What does it hurt to take a step back and access your spending habits? Are you piling on too much debt? Are you at risk of defaulting on your student debt because of your spending habits? It might seem like a good idea to just ignore your student debt, but it will hurt you later. Going into default will wreck your credit.
Seriously, take the time to go over your budget. Look at the things you spent money on and see if those costs were worth it. Can you see room for improvement? Were any of your purchases a waste of money in the end? Be vigilant! And when you find something, start cutting down your bills. The quicker you pay off your student debt, the happier you will be.
2) Cut Your Spending
P Lemann, owner of the world’s largest brewery, was once asked why he focused so cutting costs. His answer was simple: “It’s the only thing that doesn’t depend on anyone else. It’s the one variable that is always 100% in your control”. This practice allowed him to become a billionaire.
If you want to get rid of your student debt, take a page out of the private-equity book and cut expenses. Figure out ways to live on as little as you for a short amount of time. The temptation to spend is understandable, but it’s deadly. If we get a little bit of money in, our initial desire is to spend it and live as largely as possible.
But that’s not really the way to gain financial freedom and pay off student debt. Rather than buying a new TV with your tax return, throw it into your debt. Pay that off. Bring down your interest rates. Live on as little as you comfortably can, take the rest, and plug it into your student debt.
3) Cut Your Student Debt!
We rally against student debt because it’s a major budget killer! If you must use credit to buy something you can’t afford, you’re not doing yourself any favors. This is especially true if you have student debt. Yes, there are a lot of things you must buy in this world that you can’t afford out of pocket. If you want a nice car or that big family home, you need to use credit to get it.
Kevin O’Leary of Shark Tank suggests you bite the bullet for a couple of years. Live at home if you have to. Plug every dollar you have into paying back the student debt. Once the monkey is off your back, you’re home free. Instead, people are making the mistake of underestimating the impact of their debt. They pile on more without thinking about the consequences.
4) Save, Save, Save
This might seem like it contradicts point #3. But saving money should be a priority for everyone. You NEED a rainy-day fund. You need emergency cash. Your very life could depend on it. You don’t know what’s going to hit you around the corner. What would happen if you lost your job tomorrow? Or you got sick? Having money saved is essential, especially if you have student debt.
5) Make Investments
If you want to make the biggest bang for your buck, it’s no longer enough to just save your money. That’s what we think we need to do and hopefully, it’ll be there waiting for us when we’re ready, but it doesn’t necessarily work that way. Inflation, rising costs, fees, and a higher cost of living will bite into that chunk.
Maybe you’ve been saving for a decade, but then have a medical emergency and it wipes out your savings. It’s been known to happen. But part of having financial freedom means you won’t be cast into bankruptcy if someone major happens. You’ll have the funds to cover whatever it is that comes your way.
This is especially true for people with student debt. Thanks to this pesky problem, many young people are not investing for retirement. They expect they’ll be just fine, or they’re too young to worry about it. But, they do need to worry about it. The best way to save and make money is through investing.