As you know, I have a massive problem (think six figures) with student loan debt. Blame it on my youth, my misunderstanding of finances, and general ignorance on interest rates. Either way, this is where I am. I’ve been approached a few times to discuss how I manage this large load, so I figured a tutorial would be helpful.
1. First step is to accept you have a problem. Seriously, this is your life. Whether you’re dealing with Sallie Mae, Direct Loans, or a local bank, you will be strapped to them for a while. Get cozy. Maybe have a freakout or breakdown at least once and then get it out of your system. You are a grown up now.
2. This is a good tip for loans, but a great tip for life in general: document everything. Keep a spreadsheet of what you owe, what you paid, interest rates, and service providers. This is priceless. Being aware of your financial status and being knowledgable are two very separate things.
3. After you get your Excel on, you will want to get help. This means formulating a plan. For some, it will include family or a (really good) friend’s generous contribution. For most of us that aren’t so lucky, we want to consolidate our loans to lower our interest rates and our monthly payments. You may also need a cosigner if you have numerous loans, so be prepared.
4. Pay your loans. It’s as simple as that. Have your due dates in your calendar and have an automatic reminder sent at least a week in advance. This always helps me make sure I never incur late fees or penalties. Also, if you have a choice, focus on paying off the loan with the highest interest rate. It will save you a lot of money in the long run.
5. Reward yourself. Each time I pay my monthly loan payments, I set a little aside for a future purchase. Maybe it’s a cupcake. Maybe you want to save up for a new handbag. Either way, make sure you do something nice for yourself. Otherwise, you will fall in a rut and feel depressed and overwhelmed.
I, in no way, claim to be an expert. Each person has a different situation with their job, finances, and loan terms. There are plenty of resources out there for free help (and here) and I suggest doing lots of research to find what’s right for you. If you have any specific questions, I would be glad to help. You can email me at blackandblondeone(at)gmail.com. I hope this helps!
Are you bogged down with student loan debt?