How to Set Yourself up for Financial Success Before Graduation
If you are one of the almost 40% of Americans who has had to take on student loans while in school, it can be tempting to ignore those loans until graduation. Since payments typically don't begin until months after you've completed your last class, why start planning and paying off your debt now? Although the amount you're borrowing may seem abstract at the moment, it will one day become a monthly payment that can take you 10+ years to pay off.
Rather than waiting until the last minute to pay attention to your student loans, there are many things that you can do now to set yourself up for success. In addition to finding ways to make money online through an online workplace, and using any savings or financial gifts you may have received, there are other steps you can take to lessen the impact of student loan debt. Here are three valuable tips that will set you up for success post-graduation.
Understand your loans
You may have signed the promissory note on your student loans, but do you really understand the terms of your loan(s)? Now is the time to log into your online account with your student loan provider to get the important details you need to know. Find out how much interest you are paying, what repayment options exist, how much money you've already borrowed, and when payments are expected to start. Having a thorough understanding of these details can help you better manage your loans now and in the future.
Take on a part-time job for tuition expenses
If you haven't done so already, using your paycheck from a part-time job to pay down your loans can make a major difference by the time graduation arrives. Since college is a time that is free of most expenses that are required after graduation, now is the time to pay off as much of your debt as possible. Some of the best jobs for college students can pay between $12-$20/hr. If you work just 5-10 hours per week at these rates, you could be paying back the equivalent of one monthly loan payment per week. Over the course of your studies, this could take years of payments off of your loans.
Create a plan to tackle your loans after graduation
If you know that having debt post-graduation is unavoidable, take steps now to make a plan to quickly pay down your debt. Estimate what you will be earning when you begin working full-time, and create a budget based on this income and your estimated expenses. From there, see how much you can pay on your student loans each month. Also, be sure to understand the various options for refinancing and consolidating student loans to see if this might be a good option for your future. Getting a lower interest rate, or combining payments from various loans, can make it much easier to pay off your loans in less time.
Setting yourself up for financial success
Although college is a time of making memories and learning, it should also be a time of planning for your finances post-graduation. By taking the time to understand your loans, using extra income to pay down your loans, and creating a plan for paying off debt after graduation, you can help shape a healthy financial future for yourself.