10 Steps to Take Now If You Want To Slash Your Debt After College
If you’re done with school, you might feel like your future is bright and full of endless possibilities. Unfortunately, whenever college graduates leave the academic environment, they also leave their support system. This leaves many graduates one potential disaster away from bankruptcy.
The average student who leaves school with a giant debt burden can’t afford to retire until age 62, according to the U.S. Department of Labor. If you graduate with loans, you’ll be lucky to see any savings in your retirement account in 15 years. That’s why it’s important for graduates to learn 10 steps that can help them slash their debt before graduation day rolls around.
While this comprehensive list won’t allow graduates to cancel their debts altogether, it will save them thousands of dollars in interest over the life of their loans. That could go a long way towards covering monthly payments, retirement contributions or even cover monthly expenses during an emergency or when they lose a job for whatever reason.
Here are the 10 steps that can help you slash your debt before graduation day rolls around.
Step 1: Make a Plan to Gradually Cancel Your Personal Loans
Graduate students who take on loans to cover their education costs need to remember that they won’t be able to get rid of any of them for many years. Student loan companies have extraordinarily forgiving repayment provisions, but they are only available if graduates repay their student loans on time for 25 years or more. Otherwise, there are no alternatives. That’s why it’s important for graduates with personal loans to make a plan for how they will gradually cancel them within 25 years.
The easiest way to do this is to make a monthly average of how much money you’re spending every month and save the difference every month. You can save your money in a savings account or investment account that allows for automatic transfers from your bank account. Once you have built up enough cash, use it to pay off one of your personal loans and repeat the process until all of them are gone.
