According to a 2016 Gallup analysis, 35 percent of Millennials are carrying student loan debt. This doesn’t even account for school debt racked up on personal credit cards, which 47 percent also have. Combine that with surging cost of living in the urban hubs offering the best jobs, and you have a conundrum.
To live your best life without jeopardizing future financial goals, check out these four debt relief tips for recent graduates.
Determine Where Your Money’s Been Going
You know how much money you’re earning and approximately how much things like rent, utilities, your phone bill, and transportation costs. Do you know where the rest of it goes? Things like eating out, nightlife, entertainment, health costs, personal hygiene expenses, coffee habits, subscription services, etc. These activities all add up and are easy to forget about. Don’t only look at your biggest expenses, look at your least necessary expenditures when trying to trim spending.
Increase Your Income
Telling Millennials to get a side hustle is a bit repetitive (since many already work multiple jobs). But so is telling them to save money and pay off their debts. At the end of the day, there are only so many ways to save money that don’t involve spending precious hours of time. If you’re young, have skills to offer, (or have skills in mind you want to develop so you can make money off them in the future) now’s the time to invest in yourself.
Consider John Kapetaneas, a New York City-based journalist who graduated with $111,354 worth of student loans that he managed to pay off in two years. Kapetaneas certainly cut spending; he moved back in with his parents, didn’t travel, and stopped going out to restaurants and bars. But Kapetaneas was able to extinguish his huge debt in two years because he took every available freelance gig he could find, including nights, weekends, and holidays. He said he went from never making more than $20,000 in a year to making six figures. Way to go, John!
Track Your Progress
Now that you’ve determined the money bleed, and brainstormed ways to create additional income — it’s time to track your progress. There are several money-management apps that let you do so. Tools like Mint or Clarity Money connect to your bank account and track your spending across various categories. Wally allows users to keep track of their income, savings goals, and budgets in one simple interface, while also displaying social and location information tied to expenses so you can get an idea of the locations you spend the most in, and the company whom influences it. Of course, more in-depth desktop tools also exist, such as You Need a Budget. Regardless of what tool you use, the important thing is knowing where your money is going, and your progress toward achieving long-term savings goals.
Seek Expertise When in Doubt
If you’ve gone through the above steps and think your debt has gotten out of control in relation to what your income prospects can afford, it could be worthwhile to seek debt relief advice. Plenty of top providers, such as Freedom Debt Relief offer tips on debt settlement and possible consolidation to help debtors get back on track toward financial freedom. It’s important to understand that seeking out the help of a debt relief company doesn’t mean you should go forward with the debt settlement. Each debtor’s situation is different, but at the least, having finance professionals review your situation and discuss your best options available should simplify the process.
There’s nothing peaceful or stress-free about being in debt, especially when you’re young and want to travel, enjoy a rich social life, and build a financial future through assets or investments. But you can’t do that with debt. By following the above tips and practicing a rigid discipline, you can beat your debt and get on to living your best financial life.