While it’s probably the last thing you’re thinking about as you toss your graduation cap in the air, you have to face the facts: You’re going to need to pay your student loans sooner or later. Sure, your six-month grace period seems long now, but it’s going to be creeping up quickly, unless you’re one of the few exceptions.
One of the biggest mistakes recent grads make is just not being prepared by the time their loans are due. You’re in the middle of transitioning from college life into the real world, and it’s easy to let things slip through the cracks — but student loans aren’t something you can afford to lose track of.
Former students also tend to make purchases they can’t really afford now that they have loan payments due. You may be used to being able to buy almost anything you want without a lot of bills to worry about, but loans take that luxury away. That brand new car you’re looking at? Probably not a good idea.
You can avoid this giant mistake when you start repaying your student loans though, with some simple tips to help you crack down on loans.
Start a Budget
It’s never too early to start a budget. There are multiple ways to go about it, but it comes down to making a record of absolutely everything you’re earning and every bill you’re going to have to pay. If you don’t have a job yet, start by figuring out the absolute minimum you can be paid in order to have a livable income. Look at the earnings for the jobs you’re applying for and see what the average will be. You may not be happy about it, but you might have to stay with your parents for a while until you start a good job and get things on track. Apartments are pricey, and it’s hard to start everything at once.
Use a student loans checklist to make sure you’re keeping track of all your loans. If loans aren’t consolidated, Bachelor’s degree recipients can graduate with a ton of different loans. Not every lender is going to send a payment book either, but your loans are still due. Make sure you keep track of every single loan that’s due, as well as all your other bills that need paid. If you end up moving for a job, make sure you notify everyone that needs to be notified of your address change to make sure you receive any statements on time.
Don’t Extend Your Repayment Plan for Too Long
Sure, a longer repayment plan helps so you aren’t paying as much monthly right now. However, that’ll definitely catch up to you when it comes to interest. Pay as much as you can afford per month so you don’t end up paying double what you need to in interest. Interest rates for different types of loans vary, so work out how your interest is going to accrue for each one.
Don’t Buy What You Don’t Need
This was mentioned a bit previously, but seriously: Get it into your head. We’re a credit card culture, racking up thousands in credit card debt and interest that we don’t really realize. Don’t make the mistake of using a credit card as a safety net. You should never buy more than you can afford to pay back. Credit cards that offer decent cash back can be useful, but get into the habit of paying off your card every month when you get the statement. Otherwise, that’s more interest that can be accrued for you to have to pay off. You may really want a new purse or clothes, but unless your stuff doesn’t fit anymore or is starting to fall apart, it can wait until it’s needed.
You can be the grad that doesn’t make the big mistakes. It may seem like a daunting task, but do your research, work out the numbers and make sure you have all your affairs in order. Focus on the task at hand, and you’re sure to accomplish it!