Let’s Discuss the Challenges of Managing Student Loan Debt

Student loan debt has recently been a hot topic in the media. The clamour for student loan debt forgiveness has reached a crescendo, as if, if we shout it loud enough, the debt would suddenly vanish into thin air, with the total amount of student loan debt in the United States approaching $1.75 million (including mine). The actual dilemma today, without the possibility of a presidential magic wand erasing everything, is how to save for the future, pay off your debt, and enjoy life completely.

I’m always reading about the financial difficulties that recent college grads experience as they try to pay off their student debts and maintain their standard of living. Many people blame a crooked system, companies that don’t pay their fair share, or exploitative lending practises. Though these organisations have real concerns, I witness too frequently a lack of personal responsibility on their part. Often, the subject of a news story is found to own a Mercedes or rent an apartment that their social position says they should have, but not the one that their pocketbook requires. Step back for a moment.

The following questions need a resounding “yes.”

  • When the month ends, I’ll know precisely how much money I’ll have.
  • I’m not a person who relies on handouts.
  • I’m able to pay my expenses and save money for the things on my bucket list.

No, if you responded “no” to any of the above questions. It’s time for a lifestyle change. We tend to neglect the emotional aspect of money. It’s common for many of us to see money as a reflection of our personality. Brunch costs $150 a month, yet no one boasts about it. And no one boasts about their inclination to avoid checking their bank accounts because they are afraid of what the amount will be. A life-changing experience came to me after graduation when I realised that the only way I could control how my money was spent was to be the one who made the decisions. Consider a budget that starts at $0.

If you’ve never heard of it, zero-based budgeting means putting every dollar of your salary into a certain category. By putting a monetary value on each purchase, you can see exactly how much you’re spending and how quickly it adds up to more than you expected. You have to answer the question, “Do I need to budget $100 on Uber rides?” To be honest, I’d rather use it on something more significant. You have to make a mental calculation and trade-off in order to approve the way you spend your money. You Need a Budget (YNAB) and EveryDollar are two examples of applications that may help you with this. There are substantial savings that may be used to cover the cost of the next month’s payments, thereby allowing me to maintain a cushion in the event of an unexpected need. I eat at home, and now I have $150 to spend as I like (hello, Hawaii money!).

Here’s the crux of the matter: budgeting every penny puts you free. It may seem to be a contradiction, but it isn’t. You know what to do with each dollar. Setting objectives, making trade-offs, and avoiding further debt are all things I can do to improve my financial situation. I’m no longer plagued by the anxiety of not knowing whether I’ll make it until the next payday. The last thing to keep in mind is that paying down your debt will boost your income, even if it’s challenging at first. Fortunately, your spending patterns won’t change even if you become richer.

How can you pay off your debt, save for the future, and enjoy life to the fullest? You take charge of your financial condition, with all of its pitfalls and imperfections.

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