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Eight Tips For Budgeting While Struggling With Student Loan Payments

Expert Panel
POST WRITTEN BY
Forbes Finance Council
This article is more than 6 years old.

With the annual cost of college education rising steadily over the past 20 years, student loan debt has climbed to a jaw-dropping $1.34 trillion in the United States, spread out among 44 million people, according to New York Federal Reserve statistics for the first quarter of 2017. The figure ranks student loans as the second largest consumer debt after mortgage debt, being considerably higher than auto loan and credit card debt.

Unsurprisingly, a significant number of borrowers have a hard time repaying their loans, with 11% of debt being more than 90 days in default or delinquency. The only way to reverse this worrying trend is to enforce a clear and strict financial strategy that will allow college graduates to get out of debt sooner rather than later. Here are eight efficient budgeting tips to from Forbes Finance Council experts that can help you make your payments without giving up a fairly comfortable lifestyle. 

All photos courtesy of Forbes Councils members.

1. Get Angry

You have to get angry at the debt you amassed in college. It should infuriate you to be dealing with this beyond college. Once you've reached that level of indignation, you'll be laser-focused, paying it down as quickly as possible. My clients have taken second jobs, worked through government programs for debt forgiveness or put off the pleasures of life just to knock these nuisances out of the way. - Justin Goodbread, Heritage Investors

2. Follow The 20-30-50 Plan

Better than a budget, the 20-30-50 plan is a fun and flexible way to account for your spending. First, devote 20% of your take-home pay towards financial betterment. In this case, you could direct it toward paying off your student loans every month. Then, allot 30% toward fun/wants, such as nights out with your friends. Finally, spend 50% on essentials, such as your rent. - Elle Kaplan, LexION Capital

3. Pay Yourself First

It doesn’t matter what kind of debt you’re carrying. If you aren’t paying yourself first, you’re shortchanging yourself. If you have a decent income coming in, you should always be able to put 10% toward debt and 10% toward savings. Keep pace and, when extra money comes in, increase payments. - Ismael Wrixen, FE International

4. Track Everything You Spend

It’s easy to spend money when you aren’t tracking your finances closely. Track every expense, even those paid in cash. There are now many banking and online auto save features that make it easier to have money deducted monthly to help you save. Try to pay off your student loans, but also try and save monthly towards a future goal, such as a down payment on a home, retirement and a rainy day fund. - Nick Stamos, Sindeo

5. Don't Take On Additional Debt

A common thing I see happening is that people with high student loan debt also tend to compound it with other debt (new car, credit card or condo). I would focus on aggressively paying down the debt that I have, before borrowing more. Having too much debt at a young age can limit the risks you take with your career and thereby limit the potential for a high-paying career. - Mahati Mukkamala, Klaviyo

6. Set A Strict Budget

Budgeting requires discipline and consistency, not unlike a strict diet. Set a weekly or monthly allowance for yourself. If you dip under your allowance, put that money towards student loans. If you go slightly over, consider it a cheat day and make up for the loss the next week/month. Avoid reckless spending and unnecessary expenditures. Your wallet and peace of mind will thank you later. - Ibrahim AlHusseini, The Husseini Group

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7. Avoid Bank Fees

The first step is getting ahold of your finances, and there are several services and apps available that help keep track of your income, expenses and savings. Just knowing your monthly financial situation is helpful in starting to put money towards paying down debt. Students should also ensure they get low APR credit cards and open bank accounts that offer fee-free transactions. - Adam Dell, Clarity Money

8. Stop Using Technology

So much of the consumer-facing technology today is dedicated to charging for convenience. Instead of mass transit, you order a Lyft. Instead of cooking dinner, you order food delivery through an app. All of this leads to expenses. If you want to pay down debt, start small. Try taking one fewer Lyft for the first week, and then two the second week, and so forth. Reducing expenses is key. - Jason Lee, DailyPay