GETTING OUT OF COLLEGE DEBT

There are many college graduates out there who graduate with a big burden of debt and I have been one of them. When I finished my Bachelor’s degree I had so many plans and dreams like I would buy this that, I would go there do that and so on. I did not look for a job instead, I went for Master’s degree to add more debt into my life. From my experience what I suggest other is that after Bachelor’s degree do take a break, even if you don’t want just take a break for a year. If I would have taken that break, I would have done Masters degree in the different field. Anyway, I was so much in debt when I graduated and I did not get the job right away. After almost ten months of graduation, I finally landed on my first job, the job was great and worth the wait. During those ten months, I did some minimum wage jobs here and there as a part time because I was doing a full-time job hunting job which added more debt. I did not take a student loan, however, I maxed out all of my seven credit cards and was paying very high interest. 

I so much wanted to get off debt as it has been my dream for many years. Here are few things I did while I was trying to get out of my student debt and few more things I should have done but I did not.

Focus on getting the job 

Look out for the company and career that you want to work on when you reach your senior year. Start applying/working for jobs in your field as early as possible like, in high school that will build up your resume and more importantly you will learn many things, you might even figure out that you want to do something else. If you did that from your early age, you don’t have to wait ten months to actually get hired. Before getting a job, make the finding job your main priority. Watch out your spending habit until you get your professional job.

Do not buy a brand new vehicle

If you already have a vehicle and you can use that for at least a year use it even if it is in very bad condition. If you need to get one buy used and something cheaper so that your car payment is very minimum. If you have public transportation in your city, then use it even if you don’t feel comfortable, at least for a year. I used my old car even though my colleagues had expensive good looking cars and sometimes I would hide so that they won’t see me in that car. I love my old car, I still have her in the garage. Also, I saved so much money.  There is your $500-$600 savings every month.

Do not get an apartment or a house by yourself

Share your apartment or house if you are trying to pay your debt first, it will cut your living expenses in half or even more if you have more roommates. Another $500-$1000 savings depending on where you live and how many roommates you have. 

Make your own lunch/dinner

Not eating out can save you so much money. During the lunch time, my colleagues used to go to fancy downtown restaurants, they always ate out. They have been in industry for many years, I was just a college graduate with tons of debt. Some day I might afford that $30 on tray but not when I am up to the head with debt. I brought my own breakfast, lunch, and snacks from the home.  Sometimes you can eat out, but don’t over do it before getting your financial freedom. There’s your more than $500 savings.

Coffee

Most of the people have a habit of buying coffee on the way to work. Stop doing that if you have not paid your student loan yet, either take it from home or drink whatever your office has. There you saved your $3-$10 a day.

Other expenses

You can save so much from the groceries. If you are in saving mode don’t go all organic at least for a few months and use cheap stores like Aldi, Walmart to get your groceries. Use coupons or deals, watch out for sales in any purchase. Think about giving up on cable, Netflix, Hulu, gym membership etc., if you don’t use them much. If you have paid subscriptions for any product or anything give it up. Analyze your most important expenses like your life not possible without them and only spend on those. 

Limit your social Life

I am not asking you to be anti-social, but choose your friends and whom you want to hang out with wisely. If you are in saving mode do not go out with friends every time you get bored also don’t go out much with expensive friends who only like to go to expensive places,  buy expensive things and live lavishly. I was in new town I had no friends there and it seriously saved me a big sum of money. My colleagues seemed extravagant to me so I kept my distance with them outside and inside too, only work related dealings. 

Avoid taking unnecessary leaves or off day

I never took an off day in my first job. I utilized public holidays and weekends avoiding leaves on weekdays. If you are very sick and if there is an emergency, you should otherwise don’t. I did get sick, but, I worked from home in my sick days. I earned so much by not taking leaves.

Do overtime 

If you can do overtime do it, you will make a big sum that will help to pay off your bills and credits. If can also find part time job if your interest rate is so much higher and you are very pumped up to get off your credit. Unfortunately, overtime was not available for me when I worked at my first job but I wished I had.

Budget

Budget everything, write it down how much you will need for basic and other needs. Make a category for each expense and write the dollar amount. When budgeting I would like to give the minimum to maximum dollar amounts. If I am below the minimum that’s a great achievement for me, I would even treat myself sometimes. If I am about to reach my maximum amount then I would try to control my spending in that category, if that is not possible I would make sure I would not exceed my total budget amount by cutting some budget in other categories. Keep a track of all your spending, write it down or use budgeting apps. Visually seeing all your money transactions can help you so much in saving the money, keep a receipt of everything, you may throw it after a few months or weeks but do ask for a receipt when you purchase something. Another benefit of keeping the receipt is that you may return your items if you are within company’s return time period.

Plan 

Now you know how much you can earn and spend, you can determine your savings.  Make a plan, write it down how much amount of money you are going to pay to whom and when. Write down your creditors name, date, installments, and amount for each month and find out how many months it will take you to pay off your debt. Stick to your plan at any cost, when you see the money you are likely to tempt spend on something you can live without. I used to save more than 80% of my salary. I paid all of my debts before my planned time. When I paid off everything so early I was extremely surprised how the heck did I do that, is that even possible. I could not believe myself when I paid my last creditor. My estimated time period was one year least, but I did it within seven months. 

Paying 

When you are paying to the creditors, first pay the ones with highest interest rates then with lower interest rates. As soon as your salary gets deposited in your account, put aside your budget and few hundred dollars emergency fund if you think you might need it and pay everything to the creditor also pay whatever you saved from last pay check. Do not keep your money in your bank for a long time, you will get tempted to spend it. If you receive a check, deposit it right away and do not cash it, you are likely to use cash more than a card.

Will Power

You will need strong will power do all of the above-mentioned suggestions. You are just out of the college who never earned or made the minimum, now you have started to make a few thousand per month you will be so tempted to live extra vacant life. You are going to see the money you have never seen and you are going to have urges you never had. Stick to the plan, control yourself, make your main goal to pay the debt first. Keep yourself motivated all the time. Work and save, hibernate for a few months. 

Take care of yourself

Taking care of yourself is so much important when you have the strong determination of achieving the goal. Keep an eye on yourself that you won’t overdo anything. Remember you are doing all these for yourself, so watch out your limit. Don’t exhaust yourself to work. Stay happy and healthy.

If you think you can do all of these things, then I congratulate you in advance there’s your first step and hope you will successfully get out of debt as soon as possible.