A debt problem is, at its core, a budgeting problem.
- Natalie Pace
Are you also a student who gets chills down the throat every time when someone mentions your student debt? It is still an overwhelming feeling to constantly think about how you are going to reduce your student debt. Right? Besides, do you also find money management equally difficult as it is to reduce debt?
Trust us, you are not alone, there are almost thousands of students who are facing the same condition and are burdened with student debt. In fact, the latest student debt statistical data for 2022 show that there are a total of 45 Million borrowers that collectively owe almost $1.7 Trillion in student debt.
To continue, although this thought of debt sometimes feels scary, with the right strategies and tips you can effectively master the art of money management. This is where we can assist you with the utmost efficiency.
We have outlined 5 essential tips for you that can assist you significantly in reducing your student debt. So let’s dive right into the blog and uncover the secret of managing your money to finish off your student debt as soon as possible.
5 Essential Tips To Manage Money and Reduce Student Debt.
- Increase knowledge of personal finances
Although schools and colleges teach you a lot about mainstream subjects, gaining the knowledge of handling your personal finances is something that you have to learn on your own. Besides, as college students have just started living on their own terms, this is the best time to learn everything about personal finances.
So, this is the first money management tip to effectively reduce your student debt which is to gain sufficient knowledge in personal finance management. To successfully accomplish this, you need to learn about financial literacy. For those who don’t know, financial literacy is the term that is used for the ability to effectively understand how to spend, save and invest money in order to be profitable in the future.
To continue, getting enough financial literacy will assist you in getting a bigger picture of how you can effectively manage or cut the additional costs to save money. This saved money can significantly help you to reduce your debt in the future. For this, you can get professional help or there are plenty of tools or resources available online that are paid or free that can assist you in getting literate financially.
However, you should make sure that learning is not enough, all the knowledge should be implemented practically to get the best out of your finances. For this, you need to sit and plan out your whole budget every week. After this, you need to decide what amount of money will go into groceries, shopping, investments, and so on. Once you have your budget plan in hand, you will be able to analyze the additional costs that you are spending recklessly. A further step would be to eliminate those unnecessary expenses that are holding you back.
Hence, once you have gained enough knowledge about your personal finances and made a budget, you can effectively make an informed decision about your future investments or expenditures. This way, you will be able to manage better and cut the extra expenses that will assist you in stashing some for reducing your student loan.
- Avail student discounts and concessions
Who is not fond of discounts? We surely know we are, this is the reason that this is our second tip that can assist you in managing and reducing student loans. There are many brands in clothing, food, beverages, and even electronics that are aware of how students face difficulties in money management.
That is the reason, many brands offer special discounts and concessions especially for college students to reduce their prices, especially for them. This will not only assist students in purchasing things at special discounts but will also assist brands in attracting students as their customers. Some of the popular brands that offer special discounts include PUMA, Tommy Hilfiger, and even Apple Mac.
To continue, availing student discounts will assist you in saving some extra money. Moreover, sometimes brands also offer more than discounts to students to make them a little less burdened. All you have to do is research before purchasing anything whether the company is offering extraordinary offers or discounts for students or not. Companies usually ask for college Ids before providing discounts to students. So, make sure you always have your Ids with you.
This saved money will assist you in paying off some of the amounts every time and besides, drop-drop makes an ocean. Right? This implies that eventually, by saving little by little, you will pay off all of your loans.
- Find a side gig
Finding a side gig has always been one of the foolproof methods for students to lay off their student debt. There are plenty of options and opportunities out there through which you can earn a good amount of money.
To continue, there are many options that are available for onsite jobs. Along with this, remote working is also becoming the new normal of the contemporary world. So, this has opened wide opportunities for students to work along with their studies and that too from their comfort zones.
Moreover, remote working has been a very good option for students because then it saves you the traveling expenses as well as the time that goes into traveling. Earning money through extra gigs is going to assist you in relieving yourself from the burden of the debt.
For onsite, some of the gig options are part-time office jobs, pick and drop, work at restaurants, departmental stores, or gas stations. For remote workers, some of the examples are freelancing, proofreading gigs, affiliate marketing, etc.
The need here is to find the side hustle that fits your requirements and then go for it. However, one should make sure that these gigs are for paying off your study loan so, jeopardizing your studies for this should never be an option.
- Go for online study materials
As said above, paying off loans is tough, buying super expensive books is actually tougher, especially with your student debt on your head. This is the reason, we have a tremendous tip for you that can save you from spending hundreds of dollars on buying expensive books and manuals. One effective method of the same is that instead of buying paper books, you can study from various sources available online.
There are plenty of online resources like E-libraries, educational apps, websites, and course rooms available from where you can get free or resources with minimal charges. This way, you would be able to save money that goes in vain by spending on books that you are not going to see again after your semester.
However, we understand that some books are necessary to purchase but it is always safe to look for the best alternative options or E-books. The reason is there are pretty good chances that the price of E-books might be lower than that of paper books.
To continue, not only will you save money that can assist you in reducing your debt but will also assist you in saving the environment by not purchasing paper books. So, it’s a win-win situation for all. Valid enough?
- Diversify your savings
Last but not least tip from us in managing your money is to diversify it. Diversifying your money means after taking out all the expenditures, you can wisely invest all your saved money into different options through which you can earn more than invested in the longer run. We know it sounds confusing but let us explain.
There are ample options where you can invest your money like stocks, digital currency, or by keeping it in the account to earn interest. But the best option above all is to diversify it all. In fact, that could be the best strategy for you to meet your SMART Goals of getting rid of your debt sooner than expected.
For example, if you earn 500 dollars a week and after cutting all the expenditures, you are left with 150 dollars, then the best option for you would be to keep 50 dollars in the account as a contingency fund, invest $50 in the stock market, and invest the rest in other suitable alternatives.
This way, not only you will be saving money, but you will also be earning money through your invested assets. Furthermore, you will get high returns and will be able to earn more money by investing money in the right things. But for this, you need to have sufficient knowledge about all the digital or traditional options that are available in the market and then invest wisely. Moreover, if things go well, soon you will be able to free yourself from all of your debt.
To encapsulate, managing your money is not a difficult task if it is done with a plan and some actionable steps. So we have given you the steps, now what are you waiting for? Wisely implementing all these tactics are only going to bring you benefits that will assist you in managing your money responsibly and finishing off your student debt.