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The Student Loan Skinny

“I graduated with student loans...now what?”

This is a common question that plagues college graduates as they face the realities of paying back the cost of their education – with interest. It can become a complicated mess of figuring out how much is owed, who it is owed to and how to pay it all off. So, it’s important to lock down the basics.

1. Know how much you owe. When factoring in the interest your loans accumulate, it can be difficult to determine a price tag. Thankfully, the National Student Loan Data System (link: http://www.nslds.ed.gov/nslds_SA/) collects all pertinent information and gives you a total. Before you can develop a payment plan, make sure you know the exact amount of debt you are facing.

2. Figure out who to send the checks. Since loans are often determined through your college, make sure that you know where exactly you should be sending in the money you owe. If you are unsure, contact your student loan servicer to get that sorted out.

3. Plan a budget. One of the most essential aspects of managing student loans – and often just general life on a post-college salary – is determining how much money you can afford to spend. Take the time to factor in your monthly costs – be thinking about rent, transportation, food, etc. – as you consider how much money you make. Then, think about what is a realistic amount of money that you can pay for your loans.

4. Pick a payment plan. With your budget in mind, determine what payment plan works best for you. As nice as it would be to pay your loan off as fast as possible, be realistic. Make sure the plan you choose is one you can consistently pay.

5. Get creative with how to save money. If your budget and payment plan seem discouraging, keep in mind that there are little ways to help cut down on everyday costs. Even if a change in lifestyle shaves off $5 a month, those small changes can add up to big savings – and money that can go toward combating debt. Here are some ideas:

- Cook for yourself. One of the biggest costs per month is often food. Remember, dining out can add up, and it is cheaper if you eat at home. Set a realistic budget for food per month and stick to it. If you prefer to eat out, treat yourself once a month. But otherwise, pack lunches for work and learn to appreciate a home-cooked meal. The savings will add up.

- Enjoy the outdoors. A gym membership can be expensive, and there are plenty of free or cheaper options available these days via the Internet. Think about running outdoors or investing in a small set of weights for your apartment. Peruse the web for exercise clubs or free classes. For instance, if you live in Los Angeles, lulelemon stores offer free yoga on the weekends (link: http://losangeles.freefunguides.com/free-yoga-in-los-angeles/). The options are out there, and you could save some serious dough.

- Lose the tube. Do you have cable but only watch a few channels? The television can be a major monthly cost, and you should really evaluate whether it is worth it for you. So many shows are streamed online now that it may be in your best interest to lose the cable subscription. If that seems like a scary change, consider finding other hobbies – Meetup (link: http://www.meetup.com/) is a great site to use to discover other ways to spend your downtime – or utilize your friends’ subscriptions. Get hooked on the same shows as your buddies, and then watch them together each week – on your friends’ televisions.

6. Get creative with how to make money. Another great way to spend your time is finding things you enjoy and can use to make money. Commit a few hours each week to jobs like tutoring or babysitting to help bring in additional revenue. These aren’t major time commitments, but they can help you pay your loans off faster. Or, if you still haven’t settled into a job or career path yet, take a look at this list (link “this”: http://moneyning.com/debt/10-ways-to-eliminate-student-loans-beyond-paying-them-off/) of jobs that will help pay off your loans for you.

7. Stick to your plans. Make sure that your budget and payment plan are realistic – and then stick to them. Remember, any late fees will only deepen your debt. It’s in your best interest to pay off your loans as quickly as possible, but don’t set yourself up for failure. Honestly consider your finances and plan accordingly.

8. Don’t get lost in the process – stay true to yourself. It’s vital that you develop your plans and stick to them, but don’t let them consume you. Remember, there are thousands of other people just like you struggling with loans, and each of your stories are different. Your plan and process will be unique to you. If you are smart and responsible from the onset, you’ll pay off your loans in no time. Doesn’t that sound nice?

Dream it. Believe it. Piglt.

The Piglt Team

www.PIGLT.com

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