Four Ways for Recent College Graduates to Lower Their Debt
Putting away money isn’t as challenging as some people think, but it can be a struggle when you’re new to adulthood. College can serve as a safety net while you prepare for your future career. Once you graduate, the grace period on loans goes faster than you think, and you’re left facing the real financial constraints so many adults wrestle with. Even if you land a good job after college, you still might find debt rising faster than you thought. In addition to student loans, credit cards and personal spending can be hard to juggle on an entry-level salary. To help you reduce debt and enjoy greater freedom in your early 20s, here are four ways to save.
Try Before You Buy
Most apps and software offer trials for 30 to 90 days before you commit to a purchase. Take full advantage of these prior to paying for anything. In some cases, you may get everything you wanted out of the experience within that time frame. Just be sure to cancel at least 48 hours prior to the trial’s expiration to avoid being charged. Also pay close attention to your bank statement every month. Make sure you aren’t paying for subscriptions that you rarely use. They add up fast.
Tackle Student Loans
An Earnest student loan refinance is an easy way to lower your monthly payments. While refinancing can extend the length of your loan, it can also save you more interest overall. Lowering your student loan payments makes it easier to save and build financial independence early in adulthood. Be sure to stay in contact with your lenders, too. Be open to discuss your options, and avoid skipping payments if you struggle to make them. It pays to be proactive.
Stick to a Budget
Budgeting is the most underrated adult skill. Beyond limiting your spending, it creates a framework for all your financial goals. You can track your spending through an app, or do everything by hand using a simple journal or spreadsheet. The fundamental purpose of a budget is to build awareness. When you are more conscious of how you spend, you’re less likely to waste money on things you don’t need. Even simple meal prepping can help streamline your food costs significantly by forcing you to build better grocery habits and slow down on the takeout. There are lots of budgeting methods to try. One of the most popular is the 50/30/20 method. This method is simple to understand as you take 50 percent of your income to pay off the necessary expenses, 30 percent goes to whatever it is you desire and the remaining 20 percent goes to savings.
If you’re someone on a tight budget, then becoming a bit of a minimalist is the way to go. Contrary to popular belief, being a minimalist doesn’t mean living with next to nothing. What it really means is that you’re using things that actually have value. A minimalistic person is more likely to spend $50 on a high-quality backpack rather than $50 on shoes they wear once. A minimalistic lifestyle helps create discipline and limit impulsive spending. This gives your finances time to flourish while you focus on things that bring greater value to your life.
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