Budgeting 101: Student Loan Debt Strategy

I am not a financial planner, but this was my first step to help me get out of $100k in student loan debt. So let's take a baby step in helping get your sh!t together. 

Whether it's student loans or credit card debt, you will not solve this problem by ignoring it. So today, we are going to put on our big girl pants and put a plan together. So pour yourself a glass of wine, and here we go: 

• Take inventory. All of your debt accounts: get the logins, account #s, passwords, web URLs, lender names, amounts and interest rates. Document everything so it is all organized and in one place, so you can easily reference it. I also recommend syncing all your accounts to a site like Mint.com, so you have it ready at a glance (and we'll get into how it can help with expenses later). 

 

• Consolidate. If you have student debt and took out federal loans, you may be able to consolidate them into a low monthly payment. For credit cards with a high interest rate, you may be able to transfer your high-interest balance onto a new card with 0% intro interest, or lower interest in the first few months. 

 

• Make a plan. For everything that's left, plug in your loan amount and interest rate into a loan repayment calculator - the site Mint I mentioned above has one, if you set it up as a goal you can play around with repayment options. Then see how long it will take to pay off your debt, and experiment with different repayment options that will cut that time down: where can you cut in your lifestyle that you can put that towards a monthly payment? 

It took me 10 years to be student-debt-free, and I can't begin to tell you how liberated I am now. If you are early in your career, know that your income will increase over time, which will help you throw more money at these loans on a monthly basis, and I recommend throwing extra cash at your debt if you have any leftover at the end of the month. 

The silver lining to all this insanity is that you are slowly building up credit with your ON TIME (seriously, go set up calendar reminders right now) payments, which will be huge later in life when you are looking to buy your first home.