How To Start Strong With Student Loans Repayment

October 28, 2019lifewithcattitude

SO, we are coming up on November. For many of us, that means Thanksgiving is just around the corner! But for many more of you, it means that student loans payments start up. I know that this seems like something very daunting, and it can be if you’re not ready. But ready or not, you gotta start, so below are some tips that I’ve done (and wish I’d done sooner) to give you a running start for paying back student loans!

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Enroll in Auto Pay

Again, trust me on this. When you start having more and more bills, it’ll just be easier to put it on auto pay. It’ll take approximately fifteen seconds to set up. Let me stress this: as much as you can, try your absolute best to monitor your accounts to make sure your payment will clear. I went in the hole a few times over the years spending through my money and not checking to make sure I had enough. If you have to move the money out of the account and then set an alarm to move it back the day before it’s due, then do that. Whatever works for you.

Find Out Your Minimum…

Once loan payments open up, find out just how much is your bare minimum payment. That is the legal amount that you are required to pay back each month in order to have the loan paid back in whatever timeline was offered. The usual is ten years.

…And Then Pay Extra, If Possible

I WILL SAY THIS IN ALL CAPS SO AS TO DEMONSTRATE THE IMPORTANCE OF THIS POINT: PAY MORE THAN THE MINIMUM WHEN YOU CAN. Why? It keeps the interest from building up, and you’ll be done with payments sooner! Every time you make just the minimum payment, interest will keep adding up, and you will just be stuck in a hamster wheel. Once you figure out if you can make a larger-than-minimum payment…

Pay It Weekly Instead Of Monthly

Let me explain this one, because I didn’t get it at first. Let’s say you have a $300 minimum monthly payment on your student loans, but you can allocate an extra $100 for a few months. Perfect! It would just make sense to do the whole $400 payment right off the bat, all at once. And you’re right! But the better way is to pay the extra in weekly installments. Pay the $300 (or whatever your minimum) when it’s due (for me, mine is due the 7th of each month), and then break down the extra into three other weekly payments. This way, interest doesn’t have time to build up as bad. Try this out a few times!

Have Competitions With Yourself

This suggestion comes straight from my super competitive nature. I love setting new personal bests and making new challenges. I love to see just how much I can cut out of my biweekly budget to throw at my loan payment. I’ll say “okay, this week, I’ll only eat Taco Bell TWICE this week, and then I’ll put the other $20 I set aside towards my payment.” And then when I see how well I did that, I’ll say “okay, I’ll only eat it ONCE this week.” That’s just what has worked for me. I’m ADDICTED to watching the number come down!

Set A Personal Deadline

I thought I was going to pay my student loans back forever. I saw no end in sight. So, when I started my debt free journey, I decided to create my own end with a deadline I set for myself. Set a reasonable deadline based on what your job pays/other bills/debt payments, and then calculate what you would need to pay every month in order to make that deadline. By the time I’m done, even if I finish a few months later than my deadline, I’ll have paid my loans off FIVE YEARS EARLY. And that’s with working part time jobs and low paying full time jobs!

Keep Yourself Motivated

Things are going to happen. It’s just a part of life. Financial emergencies are going to rear their ugly little heads. You may lose a job and have to take a lower paying one until you get back on your feet. You may have months where you are forced to pay the minimum, and you know what? That’s okay. Tell your loved ones about your plans to pay off your student loans faster. Keep an accountability circle. Listen to personal finance podcasts. Read The Total Money Makeover. Do whatever you have to to stay motivated!

All in all, you’re about to embark on one of the most painful and yet rewarding journeys of your life. Letting your hard-earned money go straight to lenders SUCKS. Being in debt SUCKS.

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