In case you need a quick refresher, federal student loans are those offered by the federal government to parents and students to help pay for college.
They come with fixed interest rates, flexible income-driven repayment plans, forgiveness, and subsidized and unsubsidized options.
These need-based loans also come with a 6-month grace period following your graduation, during which time you aren’t required to make payments.
You apply for federal student loans by submitting the FAFSA, which we’ll cover in depth below.
Private Loans
Private student loans, on the other hand, are those offered by banks, credit unions, and all lenders other than the federal government.
These loans come with both variable and fixed interest rates and are typically unsubsidized.
They also lack income-driven repayment plans, so you should pay close attention to the terms before getting the loan. You’ll be glad you did when it’s time to repay your student loans.
Unlike need-based federal loans, private student loans are based on your credit and income and come with higher borrowing limits, which is good news for some applicants.
While interest rates can be higher on private student loans, if you have a solid credit score, you can get interest rates which compete with federal loans.
With a better idea of how student loans work, here are some tips for choosing the best loans for your needs.
Which Type of Loan You Should Choose
There’s no one-size-fits-all approach to student loans. If you’re a high-income individual with stellar credit, private student loans may be right up your alley.
If, however, you’re a lower-income individual with a subpar credit score, you may find that federal student loans are a more viable option.
You should let your financial situation help guide your decision on what loans to apply for.
In general, you’ll want to start with federal student loans, as they offer unique benefits, and pursue private loans once you’ve maxed out your federal resources to cover any remaining college costs.
Often, families find that a combination of private and federal loans meets their needs well.
If you find yourself in that situation, here are the steps you need to take to apply for federal and private funding.
How to Apply for Federal Student Loans
Your first step in the student loan application process is to fill out the FAFSA.
Short for the Free Application for Federal Student Aid, the FAFSA is the key to unlocking federal loans. Here’s how it works.
How to Complete the FAFSA
The FAFSA will factor in your tuition, income, and financial need to determine your eligibility for federal student loans, along with some scholarships and grants.
You should be able to complete the application in less than an hour if you have the documentation and info below on hand.
To complete the FAFSA, which is available October 1, you’ll need to provide yours and your parents’ Social Security Numbers and your driver’s license number.
You’ll also need to provide your parents’ tax returns (and yours if you have them), documentation of untaxed income, and data on your investments and bank accounts.
Once you’ve submitted the online application successfully, you’ll receive an email with a link to your Student Aid Report anywhere between a few days and few weeks.
Your report will tell you what type of aid you’re eligible for and what your borrowing limits will be.
How to Apply for Private Student Loans
Private student loans function a bit differently than federal student loans.
While federal student loans all come from the same place, private loans come from a number of lending sources.
What You Need to Apply for Private Student Loans
If you’re looking for additional funding beyond federal loans, or you or your parents have good credit and want to compare all of your options, your next step is to apply for private student loans.
To access the best interest rates and get the most out of your student loans, you need a strong credit score and a good debt-to-income ratio, a number which suggests you won’t have trouble keeping up with your loan payments.
If you don’t have either of those credit factors in check, as many young borrowers don’t, you can still access great rates on private loans with a cosigner.
In addition to the qualifying factors above, you’ll need to have some information on hand, like loan amount, college or university name, type of program, and whether or not you plan to use a cosigner.
Private student loans are offered by traditional and online-only banks and credit unions, as well as private lenders, many of whom are dedicated solely to providing student loans.
Where to Apply for Private Student Loans
One of the most popular private lenders on the market is College Ave Student Loans, a company dedicated to providing borrowers with a better student loan experience.
College Ave offers tailor-made loans and refinancing options for undergraduate and graduate students, building them around your unique financial needs and goals.
They also offer a variety of tools and educational resources, like student loan calculators, to help you plan out your college financing.
The application process is quick and easy, matching you with the best student loan offers you qualify for in a matter of minutes.
You can also use the pre-qualification tool that allows you to see what rates you may qualify for without a hard check on your credit.
Bottom Line
You have a whole world of student loan options at your disposal, and fortunately, applying for them is a quick and simple process.
Whether you envision yourself getting by with federal loans or think you might benefit from private loans, take a few minutes to apply for both and see what your best options are.
With a clear idea of the fees, rates, borrowing terms, and lenders available to you, you can lay out a doable financial plan and get your college education rolling.
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About the Author
Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.
This post may contain affiliate links. Please read my disclosure for more information.
Everyone and their sister are on some kind of special payment plan for their student loans. But some people get so overwhelmed with the options they just don’t bother with them. With all the talk about student loans, debt, and wealth building I’d be remiss not answer the question:
How Legit is Student Loan Forgiveness?
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When we made the final payment on my $51,000 federal student loan (Which ballooned to almost $60K with interest.) Pressing that button (actually those three buttons) was a surreal experience.
In full disclosure, we paid off almost $78K of car and student loan debt on our own in 23 months with average salaries.
We made the decision to not go with a government-led program even before the snafu with less than 1% of the first Public Service Student Loan Forgiveness Applicants actually receiving forgiveness.
It’s not because I think they’re bad programs. Loan forgiveness programs serve an important purpose and should be in place, but they’re there for a small minority of people, not the general masses.
And unless you can meet the requirements to a T, report and organize diligently for over 10 years, and don’t care about your early income as it relates to retirement, student loan forgiveness may not be for you either.
Here’s my verdict on the two most popular student loan forgiveness programs.
Public Service Loan Forgiveness
Anyone employed by a government or non-profit organization is eligible to apply for Public Service Loan Forgiveness, PSLF. More specifically, you must make 120 payments under an income-driven plan, while employed full-time in qualifying profession for your PSLF application to be approved.
If approved, the remainder of any unpaid federal student loans are forgiven and you aren’t required to pay income tax on the forgiven amount.
This is a great program, albeit restricting, to get people doing jobs that are otherwise unattractive and under-rewarded.
Most millennials won’t qualify for this program, they shouldn’t. It’s meant to help subsidize people who are passionate about low-paying non-profit and government work and helps those industries attract quality workers who could be making more money elsewhere.
The rest of us should be trying to get the most money out of our chosen career paths, not looking for ways to get stuck in low-paying jobs.
Having a program like this also increases commitment to jobs that otherwise have a high turnover rate.
If your goal is to work in the non-profit sector then your hopes of making the big bucks are already dashed, add to that a hefty loan payment accruing 4-6.55% interest and you’re the type of person who will genuinely benefit from this program.
But don’t be deceived, this isn’t a “relief” program, it’s a government program designed to help the government first and you second.
Verdict: Legit
Income Based Repayment Plan
For the rest of us, there’s the Income Based Repayment Plan. Contrary to popular belief, IBR is not actually a student loan forgiveness program. It’s a repayment plan with a forgiveness option.
The government looks at your loan amount, income, family size, etc to determine a payment that’s no more than 15% of your discretionary income. You’re required to submit your tax return every year so if your income goes up your payment goes up.
If you pay off the loan before 20-25 years — depending on when you entered the program — then you don’t get any forgiveness.
Here’s a great calculator from Student Loan Hero to determine if you would benefit from IBR. When I was playing around with it, out of the first 3 scenarios I put in, one had my IBR payments at a level where I pay off my loans in 18 years and the next told me I was ineligible (based on income.)
Then there’s the tax argument. Whatever you do have forgiven, you pay taxes on like it’s income. That’ll most likely have you paying at least 22% tax on the entire forgiven amount. And you’ll need to be prepared to pay it in a lump sum or you’ll be hit with more fines and interest.
Verdict: Not Legit
These are just the two most popular methods. For up to date programs by state and profession, check out The College Investor’ resources on forgiveness programs.
Why Should Millennials Reconsider Forgiveness Through Income-Based Repayment?
I spent five years doing a job I loved just to find a different job I loved that paid more. I was able to take it without a second-thought because nothing was holding me back.
Alternatively, the organization or public program you work for could shut down at any time. Government jobs used to be the safest place to be employed, not anymore.
Unless you’re in a PSLF qualifying job that you love and is guaranteed to you for at least 10 years, I beg you to reconsider IBR.
When I was living on a single-income with over $50K of unbankruptable student loans, I thought I’d live under the weight of my student loans forever.
My epiphany came when I discovered I’m not the only one who doesn’t want to wait 20 years to be free of my loan debt. I want to be free to make as much or as little as I want and work in whatever field I please.
Also Read: Which Student Loan Should I Pay First?
Paying off your student loans early is really attainable. It’s hard but millennials are doing it. I know you can be one of them no matter what your income is. As millennials, the stuff we need to achieve this goal is in our generational DNA:
We’re Resourceful
We will go to great lengths to spend less where we can and save money on the necessities. I mean, just look at all the options we have!
Groupon and LivingSocial for deals on activities.
Shopping through Ebates when making any purchases online will get you cash-back from virtually any retailer. (I never get a Groupon without getting Ebates cash back!)
Use Blink to save on prescriptions.
EyeBuyDirect to save on prescription eyewear.
Energy saving methods like low-flow showerheads to reduce our utility bill.
Sites like Restaurant.com for dining deals.
ThredUp for nice secondhand clothing at steep discounts from retail.
Free trials at gyms.
Apps like ibotta and Checkout51 to save at grocery stores and other big box retailers.
Use healthcare sharing to save big time on health insurance.
We Hustle Hard
The stereotype that we don’t work hard enough to get ahead is just not true. We’re jumping on opportunities like Uber and Fiverr to side hustle our way into more money. We are masters of technology and budding soloprenuers. We started from the bottom but we’re on our way to you Drake.
Millennials are starting business younger and at twice the rate of Boomers. According to a 2015 study from The Hartford millennials overwhelmingly desire to be leaders in their fields. Leadership skills are the #1 training millennials want from their employers.
We’ve Seen a Lot
2008 was a big year for us. We were starting college or going back when we realized there were no jobs out there for us. While most of us didn’t get any personal finance education in school, we saw firsthand the result of poor financial planning. That’s why millennials are putting off marriage and mortgages to break even on the bad financial hand we’ve been dealt.
Instead of being broke with a cool apartment and $24K financed car, some of us would rather crash with the ‘rents, drive a $4,000 car and have $20,000 in the bank.
We Have Squad Goals
You know how they say it takes a village to raise a child? It takes a whole Facebook friends list to crush a millennial’s student loans. We have the power of a 24/7 community to share our struggles with and motivate us to keep going. If you can ignore your uncle’s constant political tirades (there’s an unfollow button for that) you have a wealth of support at your fingertips.
Also Read: How to Make $27K by Eating Out Less
Paying off our student loans is key to living an unrestricted life and investing in the future.
These characteristics may not be true for every millennial but neither are the negative ones. So if you’re surrounded by the type of friend who’s living paycheck-to-paycheck and fine with keeping their student loans around forever, don’t stress. We’re out there, hustling to beat the statistics.
<img data-attachment-id="2659" data-permalink="https://www.modernfrugality.com/how-legit-is-student-loan-forgiveness/student-loan-forgiveness/" data-orig-file="https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?fit=735%2C1102&ssl=1" data-orig-size="735,1102" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="Are you Elligible to Get Your Student Loans Forgiven?" data-image-description="
Have you heard about student loan forgiveness? You may be elligble to get yours forgiven for good. Here is a checklist to help to determine your eligibility. #studentloanforgiveness #studentloantips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?fit=200%2C300&ssl=1″ data-large-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Do you wish you could kick your student loans to the curb once and for all? You might be eligible for student loan forgiveness. #studentloanforgiveness #studentloantips #howtogetoutofdebt #howtogetoutofdebtquickly #howtogetoutofdebt #payingoffdebt #moneysavingtips #moneysavinghacks #freestuffhacks” data-pin-title=”Do You Qualify for Student Loan Forgiveness?” src=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?resize=229%2C344&ssl=1″ alt=”Why student loan forgiveness from income based repayment or pslf might not be all it’s cracked up to be.” class=”wp-image-2659″ width=”229″ height=”344″ srcset=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?resize=400%2C600&ssl=1 400w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?resize=200%2C300&ssl=1 200w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/student-loan-forgiveness.png?w=735&ssl=1 735w” sizes=”(max-width: 229px) 100vw, 229px” data-recalc-dims=”1″>
<img data-attachment-id="4249" data-permalink="https://www.modernfrugality.com/how-legit-is-student-loan-forgiveness/how-to-know-if-youre-elligible-for-student-loans-forgiven_/" data-orig-file="https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?fit=1000%2C1500&ssl=1" data-orig-size="1000,1500" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="Are you Elligible to Get Your Student Loans Forgiven?" data-image-description="
Have you heard about student loan forgiveness? You may be elligble to get yours forgiven for good. Here is a checklist to help to determine your eligibility. #studentloanforgiveness #studentloantips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Do you wish you could kick your student loans to the curb once and for all? You might be eligible for student loan forgiveness. #studentloanforgiveness #studentloantips #howtogetoutofdebt #howtogetoutofdebtquickly #howtogetoutofdebt #payingoffdebt #moneysavingtips #moneysavinghacks #freestuffhacks” data-pin-title=”Do You Qualify for Student Loan Forgiveness?” src=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?fit=400%2C600&ssl=1″ alt class=”wp-image-4249″ width=”263″ height=”395″ srcset=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?w=1000&ssl=1 1000w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?resize=200%2C300&ssl=1 200w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?resize=400%2C600&ssl=1 400w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/How-to-know-if-youre-elligible-for-student-loans-forgiven_.jpg?resize=768%2C1152&ssl=1 768w” sizes=”(max-width: 263px) 100vw, 263px”>
<img data-attachment-id="4292" data-permalink="https://www.modernfrugality.com/how-legit-is-student-loan-forgiveness/mf-why-millennials-should-stop-wasting-time-on-student-loan-forgiveness-what-to-do-instead/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?fit=700%2C1350&ssl=1" data-orig-size="700,1350" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="Why Millennials Should STOP Wasting Time on Student Loan Forgiveness- & What to Do Instead" data-image-description="
Millennials should STOP wasting time on student loan forgiveness and here’s why. #studentloantips #studentloanforgiveness #moneytipsformillennials #studentloanforgivenesselligibility #moneyhacks #studentloandebt
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?fit=156%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?fit=311%2C600&ssl=1″ loading=”lazy” data-pin-description=”Do you wish you could kick your student loans to the curb once and for all? You might be eligible for student loan forgiveness. #studentloanforgiveness #studentloantips #howtogetoutofdebt #howtogetoutofdebtquickly #howtogetoutofdebt #payingoffdebt #moneysavingtips #moneysavinghacks #freestuffhacks” data-pin-title=”Do You Qualify for Student Loan Forgiveness?” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?fit=311%2C600&ssl=1″ alt class=”wp-image-4292″ width=”272″ height=”525″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?w=700&ssl=1 700w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?resize=156%2C300&ssl=1 156w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-Why-Millennials-Should-STOP-Wasting-Time-on-Student-Loan-Forgiveness-What-to-Do-Instead.jpg?resize=311%2C600&ssl=1 311w” sizes=”(max-width: 272px) 100vw, 272px”>
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.
This post may contain affiliate links. Please read my disclosure for more information.
My husband Travis and I paid off $78,000 of debt in less than two years.
We paid off $53,000 alone in ONE YEAR!
Today I’m sharing 20 ways you can change things up, save money, etc, for how to pay off student loans faster… and what I would change if I had a do-over.
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How to Pay off Student Loan Debt
Let’s start with some baseline facts. Throughout our debt payoff, our combined income was roughly $88K meaning we lived off $35K and put 60% of our income towards loans.
While we put $53K toward debt the first year we only put $25 toward it the second. That’s because we also bought a house around six months before we became debt-free. It’s not the order I’d recommend doing things but we were forced out of our rental and decided we’d rather put off our debt-free scream a few months than wait another year to buy.
Now for the hard truth: It was really easy signing for these loans but it was not easy paying them off.
Over $12,000 of my personal income alone was from side jobs and I (no lie) contracted shingles early on in the process from how stressed I was about the task at hand.
What’s also true, aside from the discipline it took to turn down trips to Disney and dinners out, is that I had a great year. I had fun, went out, and we even took a vacation. Even though sometimes I felt deprived in the moment, looking back I wasn’t deprived at all. Every “no” made me a stronger person.
There are countless stories on the Internet about how people paid off massive amounts of debt in short amounts of time and they mostly say the same thing. So I wanted to give you something a little different and tell you what I think are the 20 most important things we did to tackle this big problem as quickly as possible.
1. Determine Your “Why”
This is the first and most important step we took. We decided we want to travel and buy a home big enough to foster children (one of my side jobs was at a foster group home.) Every time it got hard I reminded myself of why we’re doing this and it influenced every financial decision I made. You’re gonna need this one to succeed.
2. Have Clarity
You can’t finish a race if the route’s not laid out. The next thing we did was take inventory of our debt, savings, income, recurring bills, etc. to have a clear picture of our financial situation. Some couples don’t combine their finances, for us it was necessary to be transparent with each other since his earned income would be paying off my loans and vice versa.
3. Make a Budget
You’re gonna need a specialized budget. It’s 100% necessary to have a written budget before every month begins. We do ours in EveryDollar, it’s the easiest user interface I’ve worked with. We’ve never made a perfect budget, we’re always tweaking throughout the month but we always spend less than we bring in. We’re able to meet and exceed our loan payment every month because of the budget.
4. Change How You Shop
I traded Publix for Aldi, Target for Walmart, and the mall for Goodwill. Some changes were better than others (LOVE Aldi, hate Walmart) but it’s all for the sake of saving money.
While getting out of debt we committed to not paying full price for anything. I sit in my car or stand in line looking for coupons before I make a purchase. Here are some of the ways I save on full-priced items
Groupon and LivingSocial for deals on activities.
Shopping through Rakuten when making any purchases online will get you cash-back from virtually any retailer. (I never get a Groupon without getting Rakuten cash back!)
Use Blink to save on prescriptions.
EyeBuyDirect to save on prescription eyewear.
Energy saving methods like buying low-flow showerheads to reduce our utility bill or using wind power through Arcadia (it doesn’t save me money but it’s better for the environment!
Sites like Restaurant.com for dining deals.
ThredUp for nice secondhand clothing at steep discounts from retail.
I take advantage of free trials at gyms.
Apps like ibotta to save at grocery stores and other big box retailers.
5. Pick Up Extra Jobs
There are only so many things you can cut out of your life but there’s virtually no limit to the amount of money you can bring in. We started with hourly side jobs and since starting this blog I’ve had opportunities to freelance that have given me much more flexibility with my time.
You have to start somewhere and I am convinced bringing in extra income is the key to paying off large amounts of debt fast. If you can’t work any extra then negotiate a raise or find a higher paying job. This is that vital of a step.
I’ve laid out some 21 ways to make extra money and if you’re interested in blogging you can start here or check out my post about how to start and monetize a blog in any niche.
6. Drive Old Cars
We both drive Toyota Corollas and will drive them until we need something bigger. IMO, you don’t deserve a new car if you’re in debt, you don’t even deserve a nice used car. I don’t care how shiny it is.
You need something to get you back and forth from your 2 jobs and when you can pay cash for an upgrade then you deserve whatever you can afford.
7. Buy Used or Find Free
I don’t buy new clothes anymore and half of our furniture we got for free next to dumpsters and repainted. New doesn’t always mean better. We’ve saved a lot of money this year by not falling into that trap.
8. Meal Plan
I’m so passionate about this I wrote a book on it.
Meal planning is essential to saving money on food. I worked in restaurants during college and they did inventory every week and planned specials around it to minimize food waste and save money. So I do the same in my kitchen. I plan meals around what I have and the grocery budget has become the one section I never exceed because of it.
If you need help:
Making a simple DIY meal plan
Buying less and saving money at the grocery store
Preparing food once you plan it
And reducing the food waste in your house
Then check out my book Meal Planning on a Budget (It’s available on Amazon!)
If you’re bad at doing stuff like this or don’t have a lot of time, Cook Smarts is the meal planning I recommend. It’s the best value out there and I always say work smarter, not harder.
9. Celebrate Milestones!
Every time we pay off a loan or hit a milestone we have a little celebration. It’s usually dinner out (using Groupon or Restaurant.com) or a glass of whiskey and a movie on Netflix. If you have big loans that don’t have little milestones, make your own. $3K and $5K increments are a good start.
10. Sell Stuff
We didn’t have any big things to sell but we got a few nice appliances from our wedding so we sold the old stuff and made enough for gas for the month. We regularly sell clothes at Plato’s Closet and random stuff on OfferUp or Facebook Marketplace.
11. Find Cheap Housing
We own our house now but living in something small and cheap was clutch while we were paying off debt. You get smaller utility bills and have less room to buy “stuff” for. We live in a growing city in a pretty nice neighborhood and I’ve kept no secret that we paid $800 for a 1/1 in a duplex.
As the housing market rises so do rent prices so you have to get creative while looking. My husband went for runs in different neighborhoods and found it on one of those. It wasn’t listed. We also negotiated adding water & sewage into the rent.
12. Stop Eating Out Alone
We still eat out, even when we don’t have a gift card, but we stopped grabbing food out of laziness. I used to get tacos every Wednesday after work (not on Tuesday? Gasp.) and grits on Saturday before I went in.
For millennials, eating out is part of our culture, it unites us, but these taco and grits trips weren’t bringing me closer to anything but my fork. So now I only eat out if it’s with friends or my husband.
13. Visualize
We had a 4 ft paper thermometer on our wall (next to our thermostat, lol) that we fill in after we’ve made our loan payment for the month. I used to just watch numbers get smaller in all my accounts but with this corny visualization trick, It’s been fun to see that red bar go up and the white space above it get smaller and smaller.
I made a free printable debt thermometer for you here if you want to try it!
14. Give
Seems a little counter-intuitive doesn’t it? We could be making an extra $500 payment on our loan, shave a month or two off our total repayment. Only 67% of households give to charity & religious organizations.
It’s over half but Americans still get a D in social justice. It’s important to me to give what we can now so in the future giving more will be a natural progression.
15. Chill Out
Where all my Type A brothers and sisters at!? Let me hear you say “Ahhh. Omg. This is too much. I’m freaking out…” I used to live somewhere on that level.
It’s gotten a lot better since my Shingles outbreak (at the ripe age of 26) but I still have to remind myself to just go with the flow. Whatever happens, will happen and it’ll all work out in the end.
16. Unfollow Your Friends on Social Media
Confession: I unfollowed two of my best friends on Instagram and I didn’t tell them. I love them but they’re always traveling to cool places, eating great food, buying new stuff, and I just couldn’t handle it.
In no way has it affected our relationship (it’s probably improved it) and I can scroll a little safer now.
Also Read: Why Unfollowing my Friends Helped my Finances
17. No-Spend Challenges
I’ve done a few no-spend challenges and they’ve all taught me more about my spending habits. I still bought groceries and went out to eat but I didn’t buy any personal non-necessities. The beauty of a no-spend challenge is that it can look different for everyone and you’re guaranteed to save money for as long as you do it.
If you want to learn how to do a no-spend challenge that transforms your habits and causes you to spend more intentionally you can check out my other book on Amazon, The No-Spend Challenge Guide. (#shamelessplugs)
18. Check Your Bills
Whenever it’s time to renew or we see an ad for a good offer (on something we already pay for) we call to negotiate a better deal. It’s unfortunate that companies take advantage of their customers like they do but that’s how it is and it’s on us to keep our necessities affordable.
19. Ditch Cable
We never signed up so this one is a no-brainer. I don’t care how much you love sports or how many kids you need to keep occupied. There are cheaper, if not free, ways to do it than cable. Try Fire TV Stick or Roku to fill your cable sized void.
Our friend knows our budget is tight while paying off debt so she let us use her Netflix account for free. You never know, maybe one of your friends will do the same while you’re getting your finances together. And football isn’t going anywhere.
20. Stop Investing
I wouldn’t stop for more than a year or two but it motivated us to go that much faster. I know we missed out on future compound interest but the fire it lit under us helped pay way less in interest.
And now we max out a 401k, two Roth IRA’s, and an HSA. Which is way more effective than just $50 or $100 a month toward these accounts.
If you want to pay off your loans fast, then pile on the money you would be investing to your loan. And remember it’s not forever.
You Can Pay off Student Loan Debt!
So what would I do differently? I would’ve chilled out a little more but that’s really it. I’m proud of how flexible we were able to be and still stay motivated to get the job done so quickly. But there are still things I missed out on that I wish I would’ve spent the money and done.
Whew! That’s a lot, right? Don’t expect to start all these at the same time. We worked up to doing all these things. Start with the first four and work your way down, you’ll be surprised at how naturally they all come over time.
<img data-attachment-id="3993" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/20-things-we-did-to-pay-off-78k-2/" data-orig-file="https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=1000%2C1500&ssl=1" data-orig-size="1000,1500" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year." data-image-description="
Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans
” data-medium-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=400%2C600&ssl=1″ alt class=”wp-image-3993″ width=”265″ height=”398″ srcset=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?w=1000&ssl=1 1000w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=200%2C300&ssl=1 200w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=400%2C600&ssl=1 400w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=768%2C1152&ssl=1 768w” sizes=”(max-width: 265px) 100vw, 265px”>
<img data-attachment-id="2438" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/1-22/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=735%2C1102&ssl=1" data-orig-size="735,1102" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="20 Tips to Help you Kick Your Student Loans to the Curb for Good" data-image-description="
Are you ready to pay off your student loans and be done with them? Here are 20 things a couple did to pay off their massive student loan debt in 2 years. #studentloantips #moneysavingtips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=200%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=238%2C357&ssl=1″ alt=”We paid off $78K of debt in 23 months by doing these things.” class=”wp-image-2438″ width=”238″ height=”357″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=400%2C600&ssl=1 400w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=200%2C300&ssl=1 200w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?w=735&ssl=1 735w” sizes=”(max-width: 238px) 100vw, 238px” data-recalc-dims=”1″>
<img data-attachment-id="4245" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good/" data-orig-file="https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=1000%2C1500&ssl=1" data-orig-size="1000,1500" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="20 Tips to Help you Kick Your Student Loans to the Curb for Good" data-image-description="
Are you ready to pay off your student loans and be done with them? Here are 20 things a couple did to pay off their massive student loan debt in 2 years. #studentloantips #moneysavingtips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=400%2C600&ssl=1″ alt class=”wp-image-4245″ width=”312″ height=”468″ srcset=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?w=1000&ssl=1 1000w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=200%2C300&ssl=1 200w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=400%2C600&ssl=1 400w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=768%2C1152&ssl=1 768w” sizes=”(max-width: 312px) 100vw, 312px”>
<img data-attachment-id="4284" data-permalink="https://www.modernfrugality.com/how-to-find-what-you-value-to-make-smarter-spending-decisions/mf-the-secret-to-paying-off-debt-fast-78k-in-2-years/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=700%2C1350&ssl=1" data-orig-size="700,1350" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="The Secret to Paying off Debt Fast!- $78k in 2 Years!" data-image-description="
Do you want to figure out how to FINALLY pay off your debt? Here is the secret to paying off debt fast. #payingoffdebtfast #payingoffdebtquickly #howtopayoffdebtfast #howtopayoffdebtquickly #studentloantips #moneytipsformillennials #moneyhacks #debthacks #gettingoutofdebt #howtogetoutofdebt #payingoffstudentloans, howtogetoutofdebtfast
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=156%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=311%2C600&ssl=1″ loading=”lazy” data-pin-title=”The Secret to Paying off Debt Fast!- $78k in 2 Years!” data-pin-description=”Do you want to figure out how to FINALLY pay off your debt? Here is the secret to paying off debt fast. #payingoffdebtfast #payingoffdebtquickly #howtopayoffdebtfast #howtopayoffdebtquickly #studentloantips #moneytipsformillennials #moneyhacks #debthacks #gettingoutofdebt #howtogetoutofdebt #payingoffstudentloans, howtogetoutofdebtfast” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=251%2C484&ssl=1″ alt class=”wp-image-4284″ width=”251″ height=”484″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=311%2C600&ssl=1 311w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=156%2C300&ssl=1 156w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?w=700&ssl=1 700w” sizes=”(max-width: 251px) 100vw, 251px” data-recalc-dims=”1″>
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.
Yes, you just read the title of this blog post correctly. My student loans are gone and fully paid off!
Donezo. Eliminated. Demolished.
It seems like just a couple of months ago I published my post about my $38,000 in student loans (scroll down to the bottom of this post if you are interested in how I paid off my student loans) and how badly I wanted them gone.
I have made a decent amount of recent payments and have watched our savings account dwindle down to a very low and uncomfortable number (still livable though).
Our monthly income keeps increasing and without it, none of this would have been possible. I am very grateful for everything in life.
Also, many have asked about why I made some small payments of less than $1 (see the picture below). It is because whenever I would pay the full amount of the loan off, they would still charge interest on the loan for the day until the actual payment was received. So, I had some small payments of less than $1.
Related blog posts on how to pay off student loans quickly:
My Student Loans
I worked full-time all throughout my undergraduate and graduate degrees, and still managed to have student loans. I’m going to blame it on the fact that I had to move out when I was 17/18 and I had to pay for myself to live, but honestly, I wasted a lot of the money I made as well.
I spent tons of money on clothes and food. Wes and I were not the smartest with money when we were younger and first moved in together. I will be honest and say that.
The total amount of student loans that I accumulated was around $40,000 after I received both my undergraduate and graduate degrees. You can read more about my degrees in the post How I Graduated From College In 2.5 Years With 2 Degrees AND Saved $37,500.
We have had some of the money saved in our emergency fund for quite some time, but I had a hard time parting with it. That is the main reason for why I was able to throw such large payments at my loans every week, and especially the last couple of weeks when I had student loan debt.
Some people ask me if I regret my degrees now that I will be switching to being a full-time blogger. No, I still don’t regret going to school even now that I plan on switching to 100% freelancing. I don’t think I would be where I am today without my degrees, and I do think that they will continue to help me into the future.
My original goal was to finish paying off my student loans in March of April of this year, but I fell a few months behind.
We definitely did some unnecessary (but fun spending), which caused us to be a little behind schedule. However, I’m not going to complain, I’m super proud of myself! I thought that my goal seemed a little hard, and it was, but I only fell a couple of months behind, so it definitely wasn’t impossible.
I also wish I knew that you could consolidate student loans. You can save a lot of money through student loan consolidation such as with Credible, especially if you have high interest federal or private loans. Plus, Credible is giving Making Sense of Cents readers a $100 bonus when they refinance with Credible.
Here are some of my recent payments.
My Financial Future
What will we do with the additional income that we make every month now that $5,000 to $10,000 isn’t going towards student loans? We’re still not sure! Having this kind of cash flow will be very different from what we are used to because for such a long time everything has been going to my student loan debt.
We definitely want to save as much as we can in order to build a large enough emergency fund to prepare us for the freelancing life that I will be entering.
We also want to start investing more aggressively starting this month. We’ve always invested a little, but not enough as to where it’s a meaningful accomplishment relative to me paying off my students loans.
We still don’t know when we will be buying our next house, and lately we have been talking about putting it off for a couple more years. We haven’t lived in our current home for very long (4 years), and it still fits us for now. So we will be saving for our next house down payment fund, but at the moment it’s not at the very top of our list.
Now, I do realize that in a couple of months that we won’t still have this huge savings amount every month since I will be eliminating an income source. Our income and, therefore, our amount of savings per month will decrease significantly, and that is something that will take getting used to. It’s all relative, though. Just one year ago, I could have never dreamed of being anywhere near half of what we make today. It’s only normal that I can’t work 2 full-time jobs forever.
Anyway, I am so excited that my student loans are gone! And yes, this is a bragging post 🙂
Here are my tips to pay off your student loans quickly:
Do you know how much student loan debt you have?
The first thing that made me jumpstart my student loan repayment plan was the fact that I took the time to add up how much student loan debt I had.
It shocked me so much that I wanted to throw up. That’s good though because it can be a good source of motivation for most people.
I know it was for me!
When you add up your student loans, do not just take a guess. Actually pull up each student loan and tally everything down to the exact penny.
Related tip: I highly recommend Credible for student loan refinancing (they are the top student loan refinancing company and have great customer service!). You can lower the interest rate on your student loans significantly by using Credible which may help you shave thousands off your student loan bill over time. Through Credible, you may be able to refinance your student loans to a rate as low as 2.14%! Plus, it’s free to apply. Related: Consolidating And Refinancing Student Loans – What You Should Know.
Understand your student loans.
There are many people out there who do not fully understand their student loans. There are many things you should do your research on so that you can create the best student loan repayment plan.
This mainly includes:
Your interest rate. Some student loans have fixed interest rates, whereas others might have variable rates. You’ll want to figure out what the interest rate on your loans are because that may impact the student loan repayment plan you decide on. For example, you might choose to pay off your student loans that have the highest interest rates first so that you can pay less money over time.
Student loan reimbursements. Some employers will give you money to put towards your student loans, but you should always do your research when it comes to this area. Some employers will require that you work for them for a certain amount of time, you have great grades, good attendance, and they might have other requirements as well. There are many employers out there who will pay your student loans back (fully or partially), so definitely look into this option.
Auto-payments. For most student loans, you can probably auto-pay them and receive a discount. Always look into this as you may be able to lower your interest rate by 0.25% on each of your student loans.
I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it’s FREE.
Create a budget.
If you don’t have one already, then you should create a budget immediately.
First, include your actual income and expenses for each month. This will help show you how much money you have left over each month and how much money should be going towards your student loan debt each month.
Earn more money.
The month I paid off my student loans was a month where I earned over $11,000 in extra income. While this does sound crazy, I did start off by making just $0 in extra income. Everyone has to start somewhere.
Even if $11,000 a month isn’t possible for you, I’m sure something is. If you can make an extra $1,000 a month in extra income, that can help you knock out your student loans in no time.
Some ways to make extra money are below, but check out the related articles below to see many, many more:
Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. As of December of 2016, I am now earning around $100,000 a month blogging and I never thought this would be possible. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $2.95 per month plus you get a free domain if you sign-up through my tutorial.
Sell your stuff. There are many things you can do to make money by selling items. We all have extra things laying around that can be sold, or you can even search for items that can be bought and resold for a profit.
Answer surveys. Survey companies I recommend include Swagbucks, American Consumer Opinion, Survey Junkie, Pinecone Research, Opinion Outpost, Prize Rebel, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Rent an extra room in your home. If you have extra space in your home, then you may want to rent it out. Read A Complete Guide To Renting A Room For Extra Money.
Become an Uber or Lyft driver – Spending your spare time by driving others around can be a great money maker. Read more about this in my post – How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
Try InboxDollars. InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5.00 for free just for signing up!
Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.
Related articles:
Cut your expenses.
The next step is to cut your budget so that you can have a better student loan repayment plan. Even though you may have just created a budget, you should go through it line by line and see what you really do not need to be spending money on.
There’s probably SOMETHING that can be cut.
You might not have even realized it until after you wrote down exactly how much money you were shoveling towards nonsense until now. However, now is better than never!
We worked towards cutting our budget as much as we could. I can’t remember exactly how much we cut it by, but I know that it was enough to where I felt like I was putting a dent in my student loans.
Even if all you can cut is $100 each month, that is much better than nothing. That’s $1,200 a year right there!
Some expenses you can lower or ways to save money include the below:
Earn free cash back. Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10!
Lower your cell phone bill. Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $10. YES, I SAID $10! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created a full review on Republic Wireless as well if you are interested in hearing more. I’ve been using them for over a year and they are great.
ATM fees. Why do people do this to themselves?
Pay bills on time. This way you can avoid late fees.
Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance and so on. Insurance pricing can vary significantly from one company to the next. When we were shopping for car insurance last, we found that our old company wanted something like $205 to insure one car for one month, whereas the new company we have now charges $50 a month for the same exact coverage. INSANE!
Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
Trade in your car for a cheaper one. For us, we are car people. Cars are one of our splurges. However, if you only have a nice car to keep up with the Joneses, then you might want to get rid of it and get something that makes more sense.
Live in a cheaper home. I’m not saying you need to go live in a box, but if you live in a McMansion then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
Pay more than the minimum.
The point of all of the above is to help you pay off your student loans. However, you can always go a little bit further and pay off your student loans more quickly. The key to this is that you will need to pay more than the minimum each month for you to speed up your student loan repayment plan process.
It may sound hard, but it really doesn’t have to be. Whatever extra you can afford, you should think about putting it towards your student loans. You may be able to shave years off your student loans!
How much student loan debt do you have? What’s your student loan repayment plan?
Today’s topic will probably be a touchy one and it’s all about whether or not parents should start (or end) saving for children’s college expenses. Ever since I paid off my $38,000 worth of student loans last year, I have received many e-mails from parents who are interested in seeking help for their children.
These e-mails are all related to whether or not parents should risk or sometimes even ruin their retirement by helping their child pay for college.
There is usually one common theme in these e-mails – the parents are usually not on track for retirement, they have debt, or they cannot afford to help their child in college.
Here are some of the stories I have heard in these emails:
The parents have over $100,000 in student loans that they took out in THEIR name so their child could go to school. These parents are not on track for retirement and they have a lot of other debt besides student loans.
Their child is in medical school and the parents are paying for all of their college expenses plus food, car, rent, etc. These parents are not on track for retirement and they have debt.
Their child is in law school and the child said that if his/her parents don’t continue paying for their expenses, that they would hate their parents. This child was even more mad when the parents printed out every single blog post of mine and gave it to them (I did not tell their parents to do that, it was entirely their idea). The child said I was ruining his/her life (yup, that actually happened). These parents are not on track for retirement and they are afraid of losing their child now as well.
I know I’m not a parent.
I’m not a parenting or child expert either.
I know I don’t know what it is like to have a child and the feelings that go along with that. However, I do know that I raised my younger sister after my father passed away and her attending college did make me want to help her so that she wouldn’t have to worry about money as much.
The other day I was talking to my sister and she was bringing up different ways she could possibly side hustle so that she could make extra money. It sort of made me feel bad, and for a moment I thought about helping her financially. Luckily, she snapped me out of it and told “You’ve helped me enough already. Do not worry.”
Her saying that really made me happy. I actually had tears in my eyes!
Instead of just giving her money, I helped her with her budget, I have supported her, I helped her find side hustles so that she could make extra money, I helped her make a plan, and more.
I know all of these other things I am doing have shaped her into an awesome young lady. Yes, she has to learn things the hard way but in the end she will be just fine.
@SenseofCents Good question! As a CFP, I say no. You can get a loan for college but you can’t get one for retirement!
— Shannah Game (@ProfShannah) September 27, 2014
@SenseofCents No. Akin to ‘put your oxygen mask on first before helping others’ on planes. — BidAskDividends (@BidAskDividends) September 27, 2014
@SenseofCents they shouldn’t risk their retirement but If they are in a position to help they should. I couldn’t have done it on my own. — Erica (@raerica) September 27, 2014
Quick note: If you are looking for information on college funding, I recommend attending the webinar 6 Steps To Quickly Secure Scholarships For College. Jocelyn Paonita Pearson, Founder of The Scholarship System, secured over $125,000 in scholarships and funding by following this system!
Alarming information about student loans.
According to the Federal Education Budget Project, around $100 billion was borrowed by students in fiscal 2014 alone. Also, the default rate on student loan debt averages around 13% to 14%. 90% of student loans in recent years are co-signed by others (mostly parents), and that is a big burden falling on parents.
That’s a lot of debt, and that’s a lot of debt that isn’t being paid for. If you are a parent cosigning on student loan debt, I hope you understand the consequences that can come from it.
Should parents help their children go to college?
Okay, before anyone thinks this is a post bashing all parents who help their children, I should say that I have no problem with parents helping their children pay to go to college. However, that’s AS LONG AS THE PARENTS CAN AFFORD IT.
I have plenty of friends who went to college where a lot of it was paid for by their parents. These parents could afford it, and that is key. If you are on track for retirement, you are not struggling, and so on, and you want to help your children attend college, then by all means go for it.
I also have plenty of friends who went to college where everything was paid for yet their parents clearly could not afford it. Some of these parents took on a second or even a third job so that their child could go to school. They racked up credit card debt and student loan debt as well. Some of these students never paid a cent towards their student loans and their parents were forced to in the end. They risked their retirements, their happiness and more. While I understand that these parents care for their children, they need to realize they are putting their retirements at risk.
Like Shannah said above in the tweet, you can take out loans for student loans, but you can’t for retirement.
When we have children, as long as we are on track for retirement then we will most likely help our children attend and afford college.
I know that my story is not the average story, but I went to college with no help at all. I paid for all three of my degrees on my own, lived on my own, worked full-time, paid for all of my food, and more, all starting just days after I turned 18 and graduated from high school.
It was tough, but I do think it is possible.
For other students, it may take longer to graduate, or it may take less, they may take on more debt, or they may take on less. Everyone’s story is different, but it does not mean it is not possible.
One great story I recently read was How I Graduated College With $100k… in Savings on Budgets Are Sexy. Many say my story is impossible, but just wait until you read this great story. You will be amazed at how awesome Will is! I’m jealous but I know he worked hard for his accomplishments.
How can parents help but not risk their retirement?
Instead of risking your retirement, you can do other things to help your child go to college. Below are some of my tips if you have children who are about to attend college:
You don’t need to help in every way possible. For some reason, there is this myth out there that helping your child go to college means you need to pay for everything for them. Instead of paying for their tuition, textbooks, food, dorm, car, and everything else, set limits. You might help by giving them emotional support, letting them stay in your home while they are in college, helping them find ways to save money for college, helping them cut their college expenses, and more.
Help them get a job.If you don’t have the money to help your child, you may want to help them find a job. This way they can pay for their own expenses. Just a little bit can go a long way.
Help them create a budget. If your child doesn’t have a budget, help them create one now. Read Does your budget suck? – Budget Categories. A budget can go a long way and help someone overcome many financial difficulties.
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There are quite a few questions for you today, because I think this topic is an interesting one. I know that not everyone will have the same opinion so I want everyone to chime in! 🙂
Do you think parents should risk their retirement and pay for college? What if the parents are on track for retirement? How much should they help, if anything at all? Will you help your children go to college?
That’s the total amount of student loans that I accumulated while I was getting my undergraduate and graduate degrees. The amount that is left is still at $38,000 now, mainly because I haven’t really bothered with student loan repayment (even though I should have!) and interest has stupidly been building up. I would have taken out more in student loans but the last couple of semesters I wised up and paid for in cash instead.
It is a lot of student loan debt, but I don’t feel completely horrible about it, I did earn 2 undergraduate degrees and a Finance MBA all for that amount. If I wouldn’t have earned scholarships or paid some of it, it would have easily been 3 or 4 times that amount.
I’ve been talking a lot about my plan to payoff my student loans as fast as possible. Back in February of 2012, I started my action plan for them to be gone. For me, it’s almost to the point where I am obsessing a little too much about my student loan repayment plan. I am constantly trying to figure out my cash flow and budget to see if I can get there any more quickly. I’m really focused on my extra income efforts and it’s an obsession now.
Luckily, I was able to graduate and find a great job back in 2010 and it helped me pay back student loans a little bit and start my student loan repayment plan. So many people told me that I wouldn’t find a job though. They were probably just trying to help me out by telling me what most kids my age didn’t know back then, but I wasn’t listening.
Now that I am done with graduate school (which I am extremely happy about being done with), I really need to start focusing and finally starting to aggressively pay back my student loans and start my student loan repayment. I’ve been paying down my student loans a little bit here and there but not enough where you can actually notice it.
My goal with my student loan repayment plan.
My goal is to have my student loans completely gone by April of 2013, or even possibly March of 2013. I know any sooner is most likely not possible since my plan is already pretty strict. Learning how to pay student loans faster is not easy though. Yes, you can read about how to pay student loans faster, but you really need to sit down and make an action plan.
In order to complete my goal, I need to pay around $7,000 per month on my student loans for around 6 months (which would make the payoff date April of 2013). This most likely sounds insane, but I know it’s possible. No, I will not be living off of Ramen noodles. I will still have the same quality of life and be doing nearly everything the same.
My main thing is that we have really ramped up our income in the past couple of months. W is currently making more than three times what he used to make at his old job, and I’m making more as well. This extra money definitely helps make this goal more attainable.
So, as long as our income continues to remain the same, then my plan should work perfectly. And if we start to make anymore money, then hopefully I will be able to fully pay off my student loans in March, however, a one month difference will not kill me.
Here’s what I have done so far and what you should start with when learning how to pay student loans faster. Also, the below can also help you if you are wanting to learn how to pay for college without going into debt.
Related content: How Do Student Loans Work?
1. Add up your total student loan debt for your student loan repayment plan.
Your very first step with your student loan repayment is to add up your total student loan debt. Use a student loan calculator if you need to.
This may sound stupid, but have you ever truly added up your total student loan debt, down to the exact cent? Enter reality and figure out how much you actually owe. I have a couple of friends who still can’t really say how much they owe, because they aren’t sure. I can understand this because some of the loans that you’ve taken out might have been from 4 or more years ago.
When I added up my total student loan debt, I wasn’t completely sure of the exact dollar amount. YES I REALLY JUST SAID THAT, I’m a bad personal finance blogger. I did know of the general area, but I was off by around $2,000. When I finally sat down and realized the exact dollar amount that I owed, reality really set in.
Once you know that exact number, it’ll help you realize that you need an student loan repayment action plan to pay it off.
Also, using a student loan calculator can help if you want to figure out your monthly student loan payment. You can find several student loan calculators online with just a simple Google search.
Related tip: I highly recommend Credible for student loan refinancing. You can lower the interest rate on your student loans significantly by using Credible which may help you shave thousands off your student loan bill over time.
2. Decide which student loans you’ll pay off first.
It’s really up to you personally. Different people prefer to attack their debt in different ways. With me, I’m trying to get rid of my student loans which have the highest interest rates. A large amount of my loans are at 6.8%.
I prefer to pay the highest so that I am gaining the LEAST amount of interest on my loans that I possibly can. If I stared by knocking out a loan than gets 0% (which none of mine do, just hypothetically), then I would still be gaining interest on my other loans and that, in the end, would not be worth it to me at all.
However, some choose to pay off the loans that have the highest or lowest amounts. This way you can really feel like you are accomplishing something when you knock out loans one by one. If you knocked out the student loans with the lowest amounts first, then you will probably feel like you’re accomplishing more and be more motivated with each student loan that you eliminate.
3. Find extra money to apply towards your student loans.
I’ve really been working hard on finding ways to earn extra income for help paying student loans. I’ve been doing great with this, but it hasn’t always been this easy. In September I made $3,275 and in October I made $3,700 (both after fees but before taxes) in extra income. Before September, I wasn’t making nearly these amounts, and I am still very surprised.
EDIT (February 8, 2013): In the month of January, I made over $6,000 in extra income. I do many things in order to reach this level, read further on my extra income page. I’m a freelance writer, a virtual assistant (read further on how to become a virtual assistant and what exactly a virtual assistant does), and blog owner in my spare time.
For me, the main thing I do to make extra money is blogging and freelancing. If you are interested in starting a blog of your own, I have a tutorial that will show you how to easily make a blog of your own in just minutes. You can find the tutorial here.
My goal right now is to throw nearly all of my extra income towards my student loans so that I can pay off my student loans fast. Now, why am I not saying “ALL” instead of “nearly?” It’s because I am being realistic. I know for a fact that I will not put all of it towards student loans, in fact, I’ve already spent some of it (not a lot though).
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4. If you can or want to, then ELIMINATE expenses!
There are probably a couple of things out there that you do not absolutely need. Or maybe there are things in your life that you can get for cheaper. Try calling any of the companies that you do business with and see if they can lower their prices at all. This can be your gym, cell phone, internet and so on. Getting a cheaper price can make student loan repayment attainable.
There are also many other things that you can do. Lowering your auto expenses, lowering your utility bills, eating at home more often, cooking from scratch and so on are all great things you can do to lower your expenses.
We are really working on eating at home as much as we can. We used to go out to eat way too much. What’s the point of eating out at a restaurant every single day? We were being stupid, it’s that plain and simple.
Cutting your expenses can help you pay off your student loans fast and reach your student loan repayment plan with a little less stress.
If you are still in college, I recommend you read my post How To Save Money On Textbooks + Campus Book Rentals Review. I have a coupon code in there as well, so if you are interested in saving money on your textbooks, it can be a great post to read.
What are you doing to pay off your student loans quicker?
Answer these questions:
1. How much do you owe?
2. How much have you paid off?
3. How long do you think it will take you to pay your student loans off completely?
4. What are you doing to pay them off more quickly?
UPDATE: My student loans are gone (click here to read all about it)! 🙂
Femme Frugality writes about money as it pertains to young adults, brides, parents, Pittsburghers, and, of course, college students. You can read her blog here.
Recently Michelle shared that W was returning to school, and asked for some tips for non-traditional students. I recently graduated, and now my fiance is going to college for the first time.
We’re about as non-traditional as it gets, both being far beyond “traditional” college age, and having children. So I’ve got a plethora of tips that have been helping us get through this stage in our lives. And Michelle was kind enough to let me share them in a post.
Work as Little As Possible
I know that sounds crazy. As a non-traditional student, you’ve got very grown-up bills to pay. But trust me. If you’re serious about your degree, trimming down your work schedule will help not just your grades, but your overall mental health. I am not suggesting you go into debt in order to go back to school. (Both my fiance and I are doing this without any loans.)
What I am suggesting is that you sit down and look at your monthly budget. Look at your bills, how much you’ll need to be contributing to your emergency fund, how much you’ll need for other essentials such as gas and groceries, and a realistic entertainment category (though it might not be a bad idea to trim it down a little bit if you can).
Figure out the lowest number you’re willing to commit to (be realistic about this) for your overall monthly budget.
Now, figure out the minimum number of hours you’d have to work in order to meet that number. The next step is having a conversation with your boss about lowering the amount of hours you are working every week as you return back to school.
I was really lucky when I decided to go back to school. I was able to not work at all. Granted, part of that was because I was having a child at the beginning of my return to my education, and daycare costs would have been more than my working salary at the time.
My fiance supported me through the completion of my degree, and for that I am so thankful. But I did things to contribute to our combined coffers, too. And it’s something you can do if you don’t have someone there to help you out with the bills:
Apply for Scholarships
I know this sounds obvious. But so many people don’t apply because they think they won’t qualify. Or they won’t be able to write a perfect essay. Or a million other reasons. Just do it.
Start with the scholarships at your school and branch out from there. (I wouldn’t necessarily apply at sites such as FastWeb….your odds are so low when there’s so many people competing.)
When you’re applying, first look for any scholarships you can get your hands on; they all cover tuition. But once you have your tuition fully-funded, look for scholarships that cover tuition and other educational costs. With these, your school with cut you a check for every penny that’s paid above and beyond your tuition.
For example, if your tuition is $5,000/semester and you get $6,000 funded via scholarships, the school would cut you a check for $1,000 that semester. That $1,000 (or however much over you earn in scholarships) can then be used for things like books, rent, groceries, etc. Depending on how much you earn you may find that you’re able to stop working and focus completely on school, too.
Get Involved Without Over-Committing
A great way to kick-start your career is to be involved in a fraternity, national club, or some other scholarly organization pertaining to your field. Doing so can also increase your networking power when you’re looking for a job after graduation. So join. Something. Get involved. But be incredibly aware of your constraints.
Are you working? Then don’t promise to volunteer as a full-time “job.” Do you have kids? Then don’t say you can serve as club president when the weekly meetings are held when you need to be getting the kids off the bus.
Make a Schedule
Scheduling is so incredibly important. Make sure you schedule for things like
class
work
study hours
socializing/relaxation
school organizations
If you’re in a relationship, have kids, or other people that depend on you, there’s even more you have to schedule for, and it’s incredibly important:
date nights
time to talk and catch up with each other
time to spend with your kids/whoever else may depend on you
The task can seem daunting. It can even be tempting to eliminate things on that list. But remember, you’re in this for about four years. Can you really go four years without socializing? Maybe. But you’d probably be hating life. Can you skip the talks with the girlfriend? Probably. But only if you’re trying to kill your relationship. And the studying? It’s necessary if you want to be any kind of good in the the field you’re entering. Schedule purposefully, and live life accordingly.
Spread It Out
If you’ve done the fall semester full-time and it’s just way too stressful or your grades are suffering, instead of giving up try going half-time in spring. Then you can go half-time in summer, too, and not be behind on your classes.
Most of the classes offered in summer are general electives that a lot of people need to take, so keep that in mind. If you’re receiving financial aid such as a Pell Grant or state aid, if you go half-time you’re only awarded half of your grant.
The other half that you qualify for can be applied to the summer semester and completely cover it the same as if you had gone full-time in the spring. So you’re not losing any money. At least that’s how it worked at my school.
Double-check with your financial aid office. And if you’re concerned about not having a summer break, don’t worry. Most schools have a 3-4 week break between Spring and Summer semesters, and then another 2-4 week break between Summer and Fall.
Think Ahead
If you’re going to do something like an internship at the end of your course of study, think about that now. How will that work out with work? If you have kids, how will childcare work?
Talk with your boss about it early so that they know to expect it and you all have time to work out a viable solution to give you the time you need to complete that internship (without bidding your current employer a premature adieu.) Give yourself years to figure out the whole childcare debacle instead of just weeks or months.
You Will Be Stressed.
And that’s okay. That’s normal.
That’s why scheduling things such as socialization, relaxation, and date nights are important. If you’re in a relationship with someone who is going back to school, it’s going to change your status quo. There will be stress, and stress usually leads to fights.
You will most likely fight. But that doesn’t mean that your relationship is crap. It means you’re stressed out, and you both need to find ways to cope better. Which is why scheduling time to talk and connect is so important.
Going back to school as an adult who isn’t fresh out of high school comes with a complex set of challenges.
Family responsibilities, work responsibilities, and just general grown-up bills and concerns can weigh you down. But don’t let them hold you back. Those few stressful years are so worth it. And you can hold your head a little higher than those younger kids when you walk at commencement, because you know that you had to work a little harder to hold that degree in your hand. But you didit.
What tips do you have for someone going back to college as an adult? How was your experience?
How much does college cost? This is a question many wonder. There’s rarely a week that goes by where I don’t receive an email from a student or parents of a student who are looking for ways to cut college costs. That’s why today I want to talk about college costs and how you can create a college budget that works so that you can save money in college.
College is very expensive – there is no doubt about that.
However, I want you to know that it IS possible to get a valuable college degree on a budget!
The average public university is over $20,000 per year and the average private university totals over $45,000 once you account for tuition, room and board, fees, textbooks, living expenses and more.
Even with how expensive college can possibly be, there are many ways to cut college expenses and create a college budget so that you can control rising college costs.
Continue reading below to read about the many different ways I cut college costs. While I was not perfect and still racked up student loan debt, I did earn three college degrees on a reasonable budget.
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1. Take classes at a community college to cut college costs.
Whether you are in college already or you haven’t started yet, taking classes at a community college can be a great way to save money.
Earning credits at a community college usually costs just a small fraction of what it would cost at a 4-year college, so you may find yourself being able to save thousands of dollars each semester.
There is a myth out there that your degree is worth less if you go to a community college. That is NOT TRUE at all. When you finally earn your 4-year degree, your degree will only say where you graduated from and it won’t even mention the community college credits at all. So this myth makes no sense because your degree looks the exact same as everyone else’s’ who you went to college with. You might as well save money because it won’t make much of a difference.
I only took classes at a community college during one summer semester where I earned 12 credits, and I still regret not taking more. I probably could have saved around $20,000 by taking more classes at my local community college.
Also, you are most likely just taking general credits at the community college, so it’s not like you would be missing much by taking classes there instead of a college that has a better reputation for the major you are seeking.
If you do decide to go to a community college, always make sure that the 4-year college you plan on attending afterwards will transfer all of the credits. It’s an easy step to take so do not forget! You should do this before you sign up and pay for any classes as well as to make sure that ALL of the classes will transfer succesfully.
2. Take advantage of high school classes to lower your college budget.
Many high schools allow you to take college classes to earn both college and high school credits at the same time.
This is something I highly recommend you look into if you are still in high school, as it saves time and is one of the best ways to save money on college costs.
When I was in my senior year in high school, nearly all of my classes were dual enrollment courses where I was earning college and high school credit at the same time. I took AP classes and classes that earned me direct college credit from nearby private universities. I left high school with around 14-18 credit hours (I can’t remember the exact amount). This way I knocked out a whole semester of college. I could’ve taken more, but I decided to take early release from high school and worked 30-40 hours a week as well.
3. Take all the credits you can to stay within your college budget.
At many universities, you pay a flat fee. So whether you take 12 credit hours or 18 credit hours, you are paying nearly the exact same price.
For this reason, I always recommend that a student take as many classes as they can if they are going to a college that charges a flat fee tuition.
If you think you can still earn good grades and do whatever else you do on the side, definitely get full use of the college tuition you are paying for!
4. Apply for scholarships to lower your college costs.
Before you start your semester, you should always look into scholarships, grants, FAFSA, and more. You usually have to turn in any paperwork around spring time for the following semester, so I highly recommend doing this right now if you are going to college in the fall.
Another myth will be busted right now. Many believe that all scholarships are impossible to have or it means you have to win a contest. That is just a myth.
I received around $16,000 a year in scholarships to the private university I attended. That helped pay for a majority of my college tuition. The scholarships were easy for me to get as they were all just because I earned good grades in high school and scored well on tests. I received scholarships to all of the other colleges I applied for as well just for good grades, so I know they can be found as long as you do well in high school!
There are other ways to find scholarships as well. You can receive scholarships from private organizations, companies in your town, and more. Do a simple Google search and I am sure you will find many free websites that list out possible scholarships for you to apply to.
Tip: Many forget that you usually have to turn in a separate financial aid form directly to your college. Don’t forget to do this by the deadline each year!
5. Search for cheaper textbooks to lower your college budget.
Students usually spend anywhere from around $300 to $1,000 on textbooks each semester, depending on the amount of classes they are taking and their major.
For me, many of my classes required more than one book and each book was usually around $200 brand new. This means if I were to buy all of my college textbooks brand new, I probably would have had to spend over $1,000 each semester.
I saved a decent amount of money on college textbooks by renting them and finding them used. Renting them was nice because I just had to pay one fee and didn’t ever have to worry about what to do with the textbook after the class was done, as I only had to return them. There was no worrying about the book being worthless if a new edition came out, which was nice! Buying books used was nice occasionally as well just because sometimes I could make my money back.
I recommend Campus Book Rentals if you are looking for textbook rentals. Their rentals are affordable and they make getting the textbooks you need easy.
Read: How To Save Money On Textbooks + Campus Book Rentals Review
6. Skip the high price of living on campus to cut your college budget.
To save more money, I decided to live on my own. I didn’t have the option of living at home after high school and living on campus would have cost me a ton of money.
Instead, I found a very cheap rental house (the house was VERY small and probably could have been considered a tiny home) and was able to somewhat easily commute to work and college from it. I probably saved around $500 a month by living on my own instead of on campus, and I learned a lot by living on my own at a young age as well.
If you can live at home though and want to save money, I highly recommend it if it’s an option for you. You can save thousands of dollars a semester by doing this!
I understand that some are against this because it may impact your “college experience,” but I think most people would be fine not living on campus, especially if it’s not in the budget. You could probably save around $40,000 over the years on your degree by living at home.
How did you cut college costs and control your college budget? How much student loan debt did you have when you graduated?
This post may contain affiliate links. Please read my disclosure for more information.
I’m on a financial high going into November. It’s my favorite time of year; the weather is crisp, people are happier, and my favorite holiday, Black Friday, is right around the corner. I’m on cloud 9.
And I have one more thing making my money-saving heart flutter (or palpitate, I can’t tell the difference lately.) My student loan is now 4 digits. I’m finally under 10 grand! I didn’t see this day coming anytime in my 20’s and it’s here. You guys, hard work and perseverance pay off! And I’m really excited to have you to share this moment with.
So in November we decided to kick it into HIGH gear to get my student loan completely paid off by the end of the year. This was our original goal but we had a setback in April that made us plan to have it paid off in January. But thanks to a lot of overtime and the fact that I get paid on Wednesdays (and there are 5 in Nov this year!) we decided to get a little crazy.
Also Read: October 2016 Budget
In October you’ll remember we budgeted $3800 for student loan payment and we ended paying $4070 (Again thanks to Travis’ overtime from volunteering to pick up shifts.) I was on a shopping ban which basically meant no impulse buys. I worked from Starbucks once a week because I had a gift card and I bought shampoo and a shirt for Halloween (because these were at Goodwill and look how cute we are!)
We did pretty good sticking to the line items but went over in restaurants this month. Fitting since I just wrote a post about how much you can make by eating out less. But we spent less in gas than we budgeted so it evened out by the end.
Our Real Budget
We used EveryDollar to copy October’s [revised] budget and made a few adjustments. We cut our lifestyle budget almost in half this month and all the extra money we’re making is going to our $5,000 debt payment. Yes, you read right, $5,000.
I’m doing another month of the shopping ban because I used my personal money on some blog related items in September. You have to spend money to make money, especially in a competitive space like the Internet. But so far those investments have been paying off and I’ll definitely tell you about them someday.
I also wanted to point out our “giving” category. I’ve had surprisingly mixed responses to this one. We decided at the beginning of our debt freedom journey on a consistent $500 each month. This was definitely a compromise we had to make early on and once we found a number we were both comfortable with we just stuck with it.
Some very generous people can’t see giving less than 10% even while going into debt and some people won’t give anything while they’re paying off debt.
I give now because my end goal is to be outrageously generous. Giving is a gift not only to those who receive it but to me too! I don’t feel guilty about feeling real good when I give. Ultimately though, it’s whatever helps you sleep at night.
I run half marathons and nowhere along the race do I wish I’d trained less.
Giving now is like my training to give more later. And that’s how I justify spending more right now on giving than on my lifestyle. If you’re interested in this subject I highly recommend Generous Justice by Timothy Keller. A great read on why social justice is important and how you can be generous most effectively.
<img data-attachment-id="4828" data-permalink="https://www.modernfrugality.com/november-2016-budget/mf-how-we-paid-off-over-4000-of-debt-in-october/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=600%2C900&ssl=1" data-orig-size="600,900" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="How to pay off a chunk of debt in a short time" data-image-description="
Tips to help you pay off a chunk of your massive debt quickly. #budgetingtips #budgetinghacks #debtpayofftips #debtpayoffhacks #budgetingtricks #payingoffdebtquickly
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=400%2C600&ssl=1″ loading=”lazy” width=”400″ height=”600″ data-pin-title=”How to pay off a chunk of debt in a short time” data-pin-description=”Tips to help you pay off a chunk of your massive debt quickly. #budgetingtips #budgetinghacks #debtpayofftips #debtpayoffhacks #budgetingtricks #payingoffdebtquickly” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?resize=400%2C600&ssl=1″ alt class=”wp-image-4828″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?resize=400%2C600&ssl=1 400w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?resize=200%2C300&ssl=1 200w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?w=600&ssl=1 600w” sizes=”(max-width: 400px) 100vw, 400px” data-recalc-dims=”1″>
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.
It is important to understand that Credible does not provide a loan.
It simply acts as a matching platform to help you find a company to refinance your loan through. For this reason, there are no qualifications to use Credible.
However, if you decide you would like to refinance your loan through one of the companies partnered with Credible, you must meet the following requirements:
Must have $5,000 or more in student loan debt from a qualifying US educational program
18+ years old
US citizen or Permanent Resident
If you do not meet the above requirements, you can still apply if you have a cosigner who meets the requirements.
Should You Use Credible to Refinance Your Loan?
There are many advantages to using Credible to find a loan provider, but there are also some drawbacks.
Below are some of the pros and cons of refinancing your loan through Credible:
Pros
No Origination Fee: Many loan providers charge what is known as an origination fee. An origination fee is typically charged by a lender to cover the cost of processing a loan. None of the lenders that offer refinancing through Credible charge an origination fee, which is another way to help minimize the cost of refinancing your loan.
Multiple Offers: One of the most frustrating parts of applying for a loan is the tediousness of the process. From filling out multiple applications to researching quality lenders, you can start to feel bogged down and discouraged. Credible simplifies this process by only making you fill out one form that yields prequalified rates from dozens of loan providers.
Does Not Impact Your Credit Score: Comparing loan offers through Credible will not impact your credit score. Because Credible only facilitates matching between lenders and borrowers, they do not need to run a real credit check. Once you decide on a company to refinance your loan through, you will complete the application process on that company’s site.
Cosigners Allowed: Though it may seem obvious, you will receive better interest rates if you have a stable income and a credit score in the mid-600’s or higher. If you are worried about your credit score, Credible allows you to have a cosigner to apply for loan refinancing.
Cons
Loss of Federal Benefits: Federal loans offer certain benefits that may not carry over with a private loan provider, such as income-based repayment plans and unemployment protection. If you switch from a federal to a private lender, you could lose these benefits. Be sure to check what benefits are offered with any loan provider before making a final decision.
Prequalified Rates are not Binding: It is important to note that a prequalified rate is not a true offer. It is simply the best estimate based on the initial information you provided. If your credit profile changes from the time you check through Credible to when you actually apply, you may have a higher interest rate than initially estimated.
Limited Options: It cannot be understated how beneficial it is to have your information fed to multiple lenders at once to get rates. However, Credible does not represent every loan refinancing company out there. While Credible is an excellent tool, it is advised that you do some research on other student loan providers that are not represented on the Credible platform.
How Does Student Loan Refinancing Work?
When you refinance your loan, you are taking out another loan to pay off your old loan.
Your new loan would ideally have a lower interest rate or longer repayment period to help make monthly payments more manageable.
Refinancing a loan sounds complicated, but it can save you a lot of money.
Why Should I Refinance?
There are a few situations in which it makes sense to refinance your student loans.
Lower Your Current Interest Rate
The most common reason to refinance your student loan is if you would like to lower your current interest rate on your loan.
Refinancing your loan can also help if you are making payments on a federal loan repayment plan and would like to repay your loan more quickly.
It is typically not advised to refinance federal loans as you can lose some key benefits that may not be included with a private lender.
However, there are some benefits to refinancing through a private lender. Government student loan programs are required to offer every applicant a loan.
This is good for people with bad credit, but people with good credit are actually at a disadvantage.
Private lenders are able to offer better rates by only offering loans to applicants with good credit.
In terms of refinancing a loan, this means you could dramatically lower your interest rate.
How Do I Refinance My Student Loan Through Credible?
Credible is an incredibly simple platform to use and it only takes about two minutes to find prequalified rates.
Enter Your Information
The first step is to enter your information. The information that is needed to get prequalified offers through Credible is your personal and contact information, information about your former school, and how much you are looking to refinance.
They will also perform a soft credit check, which will not affect your credit score.
Get Started Now!
Review PreQualified Rates
After you enter your information, Credible will provide you with prequalified rates from various venders.
Note that these are rates you may qualify for based on the information you entered but are not a final offer. Based on these rates, you can decide if it makes sense to refinance and select the offer you feel is the best option.
Apply With The Lender
Once you decide on a loan offer, it is time to apply for the loan. Credible will direct you to that company’s site and you will finish the application process there.
The lender will ask you for more in-depth questions about your finances and run a real credit check.
Once you close your loan, all payment will be processed through the company through which you financed. Payment options will vary from lender to lender.
Many loan providers offer autopay to help you avoid late fees.
Final Thoughts
Credible is an easy to use platform that can help you decide whether or not it is in your best interest to refinance your student loan.
It is an important tool in the overall process of finding the best loan provider for you.
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About the Author
Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.
Here are my tips to pay off your student loans quickly:
$40,000.
