These days, there are way too many people who graduate college who have never sat down and learned how to balance a checkbook. Most schools use home economics as an elective, which is easily passed up by many. When they have to start paying off their student loan debt, they run into problems. They weren’t expecting to be hit so suddenly.
The problem with this is, once those students become adults, they find their finances are way too complicated. It’s nothing but a big ball of stress, which leads to procrastination, then late fees. Many people with student loan debt often go into default because they didn’t prepare. Bills pile up with no expectation or organization.
Many of these same people often spending hundreds or even thousands of dollars per year on overdraft fees. They battle their paychecks week-to-week because they can’t get a grasp on what they’re doing financially. It becomes a vicious cycle that’s easily fixable by taking the time to learn how to budget.
By taking a few simple steps, you can reduce the stress and get your budget in order. It can save you A LOT of money in the long run, making student loan debt easier to handle.
Here are several tips for making the process easier:
1) Get Realistic about Your Budget
Only you know the state of your finances, so you should sit down and make realistic goals about changes you need to get things in order. It’s not going to be an easy process at first, but once you get there, you won’t regret it!
Write out a plan of action. Gather all your financial paperwork. Have folders for each bill with receipts. This will make life so much easier for tax time. Plan out your expenses. Once you have a plan of action, the rest will fall into place. Make sure student loan debt is your number one priority. You won’t be financially free until you pay that off.
If you struggle with your student loan debt, give Financial Helpers a call. We can help you find better rates that fit your budget. We’d love to hear from you! You can reach us at:
2) Too Many Accounts?
If you’re like a lot of Americans, you have more than one account opened. Perhaps you have several investments, more than one bank account, or even retirement accounts from jobs you no longer work at. Of course, these accounts were opened for a good reason at the time, but what about now? How many accounts do you have open that you don’t need anymore?
A good step in simplifying your financial lifestyle is consolidating accounts and closing the ones you don’t need anymore. Each one you leave open is just more paperwork to keep track of and fees you’re paying flying out the window. There are aspects to this you should be watchful of.
For example, if you bank with the same place who holds your mortgage, you should have a free checking account with them. If you were recently married and both of you have separate accounts, consider the benefits of merging into one bank account to save on fees and making budgeting easier.
3) Don’t Get Complacent with Your Insurance
One big mistake people make is choosing an insurance company and sticking with them. If they consistently offer the lowest rates and the highest level of customer service, it’s completely understandable. But a lot of people don’t even bother to look around for cheaper rates after a year or more.
The truth is, a lot of people are paying a premium price for crappy insurance. As time goes on, it’s simpler to renew coverage with the same company rather than researching for better deals. Your expectations will change, and so should your insurance. If you rent, then it’s a smart idea to get renters insurance.
Rather than buying renters insurance with a different company, you can save money by bundling with your car insurance. After you have a decent record of paying your bills on time, you remain accident-free and even improve your credit score, the rate you have to pay may fall. But don’t leave it to your current insurer to lower your payments though.
If you want to save money and get the best rates, take the time to reevaluate your needs and shop around for the best coverage. It’s not an easy process, as you’ll have to get quotes from a variety of different insurance companies, but it can save you hundreds of dollars per month. This is essential for surviving while holding onto student loan debt.
4) Take a Good Look at Your Credit Cards
Just like most people have multiple accounts open, they also have more than one credit card. Maybe you fell victim to the credit card booth when you were in college (the promise of free credit too hard to pass up). But, you didn’t do that much research on what you were getting into. This can destroy your credit in the long run.
In fact, most of us know someone who got bit in college and is STILL paying back those debts. That’s why you need to pay special attention to your credit cards. Study each one, their reward programs, and determine their value in your life. If you have student loan debt, this is crucial. Piling debt onto debt will never get you ahead of your finances.
Getting a Best Buy credit card for the ‘extra points’ isn’t worth the extra interest. It really offers no value to you. A lot of cards have fancy names, but are either duds or are a drain to the consumer if they don’t know how to use the card correctly. Before you know it, you’ve racked up thousands in debt.
Why You Need to Conquer Student Loan Debt
That’s why it’s important to know exactly what you need and cut out the rest. Yeah, maybe you like the idea of having 3 or more credit cards, but what’s the real advantage?
The idea is to simplify your life. When it comes down to figuring out your budget, you may realize you’re wasting $100/month on subscriptions you barely use. Why pay for Hulu when you only use it once or twice? Write everything you spend down, create a budget, consolidate accounts, and check your insurance rates regularly.
Americans waste too much money on needless things. To overcome this student loan debt burden, you’ll have to simplify your budget. Save money. Be prepared for a rainy day that might come. And pay off that debt. You won’t regret it!
