Be sure to cover all your expenses before you spend money on fun activities. If you receive any extra money, like a
bonus or a gift, as tempting as it is to spend it frivolously, stop and think: why not use a portion of it to make an extra loan payment? Yes, you have graduated from college and you’re earning a salary—you’re in charge of your money. But that means you’re responsible for your bills and should be wise about your spending habits.
Finally don’t stress out. It might seem like it’s going to take forever to pay that amount of money off, but once you land a good-paying job, your bigger paycheck should enable you to make larger payments. And every year you
work, you’ll get raises and bonuses, and eventually you’ll leave that job and get a new one that pays you even more. The student loan gave you a leg up in the world, setting you up for a strong career path. One day, it will be paid off!
Personal Finance Stories Matt’s family isn’t rich. His parents went to college and it was expected that he would too, but the thought of how to pay for it was stressful for the whole family. Matt got good grades and qualified for a small sports scholarship that paid for his first college semester, but the remaining semesters would have to come out of his pocket. So, he applied for a student loan through the university. When he finished college, the total amount of his student loans was about $70,000. He had a grace period before he had to pay off the loans, but he decided to start paying $100 a month right away. After about six months, he was able to get an entry-level job in his field, earning him $60,000 per year. Because he lived with his parents, this income enabled him to pay about $500 a month toward his student loans. He added this amount to his budget, along with entertainment, car expenses, clothes, and the small amount of rent he paid to his parents for food and lodging. Also, anytime he got any extra money he’d put it toward the student loans. Fast forward six years, when Matt was able to make his final payment for his student loans. What a relief!
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