7 budgeting tips for people with student loans

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More than 44 million Americans are struggling with student loan debt, and many are struggling to meet their monthly obligations. Managing your student loans takes discipline, commitment, and a strategic plan to pay off your debt. Here are some realistic budgeting tips to get you on the right path to a debt-free future.

1. Get a budgeting app

You can’t manage your finances properly if you don’t know where your money is going. Choose a good budgeting app that will help you track your expenses and come up with an action plan to eliminate your student loans.

You Need a Budget (YNAB) charges a small monthly fee, but it’s one of the most comprehensive budgeting apps. It lets you connect each of your student loan accounts and track details of your repayment terms in one place, and you can sign up for a free trial.

If you’re not quite ready to invest in a full service, there are free budgeting apps that will help you get the job done. Mint is the most popular free app because of its simplicity and user-friendly features.

2. Track your student loan repayment

Don’t blindly submit your minimum monthly payment. Instead, set a repayment deadline and track each of your student loan balances as you pay them off. This gives you visual motivation to keep reducing your student loan debt as the number gets lower and lower.

To do this, you can create your own spreadsheet or use a student loan tracking service, such as YNAB, Debt Payoff Assistant, or Debt Free. There are many debt repayment apps and trackers on the market, so play around and see which one best suits your needs.

3. Increase your disposable income

Look for ways to increase your disposable income so you can pay off your student loans quickly. Saving an extra $100 every month could be as simple as grabbing lunch at work or buying generic brands at the grocery store. If you are happy with your current employer, consider asking for a raise. Arm yourself with market research based on your location, background, skills, and proven results to present a salary range based on your worth. If you are unhappy with your current role, it may be time to apply for a better paying job.

Be creative and keep an open mind. The answer may be as simple as finding a roommate to help share the cost of living in your current space. Or maybe you need to make a more drastic change by moving to an area with a lower cost of living.

4. Take a side gig

More and more people are earning extra money during their off hours by taking up a side business. These include everything from driving for carpooling programs to working online as a virtual assistant to dog walking. Websites like Fiverr, Rover, and Craigslist can help you find temporary short-term gigs.

If you really want to tackle your debts, use your side income only to pay off your student loans. With a side gig, you can spend hundreds of dollars on your loan payments each month without feeling like that money is missing from your account.

5. Put extra money to pay off your student loans

Tackle your debt by paying all the extra money directly into your student loans each month. This should include any money that is not dedicated to a specific expense as well as windfall earnings such as annual bonuses or inheritance money. This will help you pay off your loans sooner and save you money in interest charges.

6. Stop investing

Paying off student loan debt will almost always give you a better return than investing your money elsewhere. For example, if you pay 10% interest on your student loans, their repayment is a guaranteed return of 10%. Finding this level of return with investments is nearly impossible.

However, you must contribute to a 401(k) if your employer offers a matching program. You’ll save for your future while taking advantage of free money from your employer that you wouldn’t otherwise have access to.

7. Pay your student loans first before you have the chance to spend your paycheck

Not everyone is a master at managing their finances. And even if you are, you can still be the victim of occasional financial slip-ups. Make your student loan payment your priority by submitting your payment as soon as you receive each paycheck. This saves you from spending your money elsewhere and helps you avoid missing out on your student loan due date.

With intentional budgeting strategies, you can prioritize paying off your student loans and eliminate them faster. Commit to cutting expenses and getting creative with increasing your income, and you’ll be setting yourself up for financial freedom in the future.

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