Step 1: Add Up Your Student Loan Debt is a post originally published on: Everything Finance - Everything Finance - Its all about Money!
We’ve already written about getting out of student loan default this week, so now it’s time to chat about the very first step you need to take when it comes time to pay off your loans (because we don’t you to ever get to the point of default!)
This one step will start your journey to repay these loans and is a necessary evil in the world of student loan repayment.
This step, as you might have noticed in the title of this post, is:
Add Up What You Owe!
It seems like such a simple task, and yet most college students surveyed today will only have a rough idea of what they owe. I admit, I didn’t know how much I owed either when I graduated from college, and let me tell you, it was quite the shocker when I actually sat down to add it up!
Now I’m in the habit of trying to quickly pay down my debt, and because of that, I consistently check my balances. Sometimes, it’s really disheartening but other times it’s just the motivation I need to remind me of my payoff goals and keep me on track when it comes to spending.
To be honest, my student loan debt is a constant reminder of the poor decisions I made during my younger years. I’m always amazed that I didn’t think through pushing that “accept” button. I just thought I needed the money, when in truth, I really didn’t. It’s my biggest financial mistake, one that haunts me every day. However, I’ve learned so much from it, and I’ve never missed a payment!
If You’re Considering Student Loans
If you haven’t actually taken out student loans and you are reading this post, here is my one big piece of advice: You might think you need to take out the max amount of student loans “just in case” but that’s where you can get into trouble. Instead of taking out the max, just take out what you need. You can find this out by tracking your spending for one month and estimating the basics like rent, utilities, food, and gas. You might also consider taking out an extra $1,000 to put away in an emergency fund just in case. While you will have to pay interest on the extra $1,000, it is better than getting deep into credit card debt. Knowing exactly how much you spend each month will help you prevent going overboard when it comes to your total amount of student loans.
It Will Get Better
In sum, if you already have student loan debt, don’t despair. It can seem like a huge weight on your shoulders. I know; I’ve been there.
However, with planning, hard work, and sacrifice, eventually you will start to see the numbers dropping to zero. The first step is finding how much you owe. Then you can move on to paying it quickly and efficiently until you are finally free!
Did you take out too much student loan debt? What is your payoff plan?
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