The life of a student is full of learning. You learn different things related to different aspects of your education as well as your life. Managing your finance is one such area that you learn, but unfortunately, most people do not follow it as a student or when they grow up. The inevitable result is incurring debt, and sometimes it goes beyond control.
Therefore, the best way to lead a happy life, in the long run, is to start saving money immediately. This may cause a slight inconvenience having to compromise on a few things currently, but once again it is all about your benefits in the long run.
Being in debt or multiple debts is the last thing one wants in their life, mostly in the latter half of it. Debts will affect mental, physical, professional, social and personal life as well in a negative manner. It is therefore elementary that you follow a proper plan and stick to it right from your early college life.
Save more money
Saving more money is the one most significant way to keep you debt free. The most prudent way to do this is to have a budget designed and stick to it. This budget will keep you as well as your finance on the right track to financial independence. You will know where the money is coming from and where it is going. You will know whether or not it should go in that way or is there in any other way that is more productive and useful.
Knowing your expenses, you will be able to cut down the unnecessary ones to save more and use it to pay off your debt. This will ensure that you provide enough room in your budget and determine the smartest ways to save more money. All in all, this saved money will prevent you from considering debt consolidation reviews and to take out one to get rid of your difficult times.
Reassess your living condition
You must first consider your living situation and reassess it wisely. This is one thing that will either make or break your budget as how much you can pay for a living is very important as a student. Ideally, rentals and mortgage payments are the biggest expenses for any household, and this is one area that you should take care of well and find out ways in which you can lower it further. Here are a few ideas:
- You can think of moving to a cheaper place
- You can get a roommate
- You can refinance your mortgage to a lower interest rate but not to an increased term or any alternative that will negate your savings due to the closing costs and
- Even sell your house to buy or rent a cheaper one.
Remember, changing your living situation is not fun always. It all depends on your affordability. If you cannot afford a place, then there is nothing more to explain or suggest.
Other steps to follow
There are other useful ways in which you can save money as a student and have an emergency fund ready to prevent falling in debt trap having to borrow money in unavoidable circumstances.
- Cut the cable if you do not use it often or are not very fond of watching TV. This will prove to be the most productive. You can build up your side hustles instead of watching TV and spending time unproductively. You can take up a part-time job to build your emergency fund even more. Having no TV will reduce your monthly energy bill as well to some extent, but every dollar saved counts.
- The phone bill is another significant and big expense of students and most of the times it is unnecessary as well. Try to lower your phone bill and shift to a no-contract phone. If you have a contract plan, then there is a high chance that you are paying much more than you need. No-contract phones are as good as anything else, and you will get it at a fraction of the price.
- Stop or curb down your expenses on eating out. Ideally, food is an easy area that you can keep in control and regulate it depending on your situations. If you look at your past expenses, you will find that there is a lot of money spent already towards food that you could easily do without. Instead, start considering to make your food at home. This is not only cheaper and more efficient but is also healthier.
- You can save a lot of money when you shop for secondhand goods. You will not only keep your purchase cost down to the minimum level but will also find it easier to continue paying off your debts. You will get almost all those things that you need for a living in a yard sale, on Craigslist, from your family members and friends. There are even a few online stores selling secondhand goods that offer a specific credit or discount with their link.
- Do not overlook but control your utility bills to save more money. It does not take much to use it sensibly, but in return, it will save you a few dollars.
- If you have an expensive car that costs too much in maintenance and usage, sell it and take on a cheaper one.
- Make sure that you pay off your debts faster to earn more money. Prioritize your debts and take on one at a time. You may start from the high balances to the lower ones or vice versa as per your choice and affordability.
- If you have any tax refund make sure you fulfill your emergency fund with it or use it to pay off your debts. If you do not have any now, plan it for next year.
If you work harder and for longer hours now, you can retire with enough money in your bank and no debt against your name but a lot of peace in your mind and family.