A growing chorus of voices from millennials (those born between roughly 1980 and 2000) have centered around the load of student that plagues many of them. High student loans coupled with a lethargic labor market and stagnant wages have increased the anxiety of many young people over the past few years. However, we at Boone Wealth Advisors have a message of hope for you: You are not alone. Make 2017 your year to eliminate your student debt for good! Here are some steps to take when you decide to get serious about your student debt.
#1: Explore options to consolidate and/or refinance – Many people borrow money for school from multiple lenders or have their loans sold to different servicing companies. It makes sense to simplify what is actually owed by consolidating the loan balances to the lowest interest rate, or to inquire what refinancing options may be available.
#2: Realistically assess your expenses – Yes, this means doing a budget. Follow the money. Technology makes this easy. It also means taking a hard look at where your money is being spent when it may be better utilized servicing a student loan balance.
#3: Unlock your earnings potential – On a less painful note, many people who do a budget the for the first time learn that they have more ammunition for the loan balance than previously thought, and they feel as if they’ve received a ‘raise.’ Are you at a place where you have upward income mobility? What is your income plan in the next year? Important also is to think creatively about income outside your 9 to 5 job. The beautiful thing about this moment in history is that there has never been more avenues for earning more money outside of your job or career. Internet based business? Sales? Tutoring? Uber driver? Decide and execute!
#4: Set an aggressive elimination goal and make it visible – Most people respond best to a goal that is staring at them all the time. Write it down, graph it out, and put on the mirror, refrigerator, or computer backdrop. Make it your nearly singular, maniacal focus.
#5: Reward yourself – We recognize that paying down a good-sized student loan is hard work and you need ‘breathers’ along the way. Set appropriate benchmarks and treat yourself (pedicure, night out with friends, etc.) when you’ve achieved that next level. Share your success with friends!
We are passionate about helping our clients pay off debt, save and invest. If you have any questions or would like help in planning how to tackle your student debt, one of our financial planners would be happy to speak with you.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.