It can feel like the only way to get out of student loan debt is avoid anything fun and only pay down your student loan debt aggressively. Yet you want to live the life you imagined your college degree would earn you, a life without ramen noodles, clearance only clothes, and every night spent home. How do you live your life fully and repay your student loans while making the dollars add up?
Read on for strategies to repay your debt without missing out on everything.
Have a little fun
Repaying your student loans doesn’t have to mean spending all of your extra money on your debt. You can still have some fun, you just can’t have all the fun. If you love to travel maybe a large trip once per year and a smaller weekend getaway are enough to get you through repaying your debt. If you want to go out with friends, decide how often that fits in your budget.
Be conscientious and choose to spend on the fun activities that enrich your life so you don’t look back and feel like repaying your debt was a black hole sucking in all your joy.
Decide if you want stuff
Many people get happiness from experiences rather than things. Decide if you would rather have new stuff or save your money for something else. When you do need stuff try to plan your purchase so it meets your needs and you don’t end up having to buy something similar in a few months.
Instead of telling yourself you can never buy anything fun re-frame it as choosing not to buy stuff because you prefer to spend your money on travel, sky diving, football tickets, you name it.
Plan for your future
When you’re focusing on getting out of debt it can be easy to bankrupt your future self. You know, the one who wants to get married, or buy a home, or retire someday. Be sure to put away for some minimum requirements.
You need an emergency fund. How big of an emergency fund is up to you. You need at least one month of expenses at a minimum, although three months is better.
Contribute up to the max match in your employer-sponsored retirement plan if you can afford it. Don’t leave any of your employer’s money on the table, that is something you will miss out on because you won’t be able to get that match later.
If you have a big life goal like a wedding or a house to pay for decide how far into the future you’re willing to push that purchase. If you’re willing to wait until you’re out of debt then wait. If not, prioritize saving for this now.
You can’t have it all but you can have some…
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Decide what you want
What is it that you’re most afraid of missing out on? My priorities are getting my employer match, having a three month emergency fund, and traveling at least once a year. I don’t compromise spending in these areas to pay extra on my loans but I will compromise other types of spending such as buying stuff, going out to eat, or getting drinks.
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Weigh your desires against your debt
Think about how much happiness you’re going to get from paying for what you want and then think about how much happiness you get from making progress on your debt. If you don’t get that much satisfaction from repaying your debt think about how much worry having that debt brings you. Choose the option that maximizes your happiness.
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Think long term
Most of us are in student loan debt repayment for the long haul, anywhere from 2 to 25+ years. Think like you’re running a marathon, not a 5K. That means you need to develop a repayment strategy that considers your long term goals and that strategy will be different for everyone.
I want to know what you’re most worried about missing out on because of your student loans? Share your thoughts in the comments below or on the Repayable Facebook page. As always you can email me jeni@repayable.org with any questions, I’m here to help!
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