If you’re in the process of paying back your student loans, you might be wondering how to save money in order to make the payments on time and in full.
Luckily, there are ways to save money no matter where you are or what your financial situation looks like.
Follow these tips to help you come up with extra cash and learn how to save money no matter where you are or what your financial situation looks like.
1) Make a budget
The first step is to set a goal. Figure out how much you want to save per month and what your ultimate goal is.
For example, if you want to save $500 per month, then your goal would be $6,000 in total.
Next, review your expenses and see where the money could be saved. Keep in mind that this may vary depending on individual needs.
Finally, find ways to make more money or cut back on unnecessary spending.
One way to do this is by taking on side-hustles like driving for Uber, picking up odd jobs with Task Rabbit, doing freelance work online (e.g., Upwork), etc.
Remember that even small amounts can add up over time!
For those who have debt from school loans, it’s important to know when it makes sense to consolidate debt and when it doesn’t.
2) Stay disciplined
One of the best ways you can save money is by developing a budget. This will help you determine how much money you have coming in, and how much money goes out.
The more disciplined you are with your budget, the more savings you will see.
Give yourself a fixed amount of spending money each week or month and use it only on items that are necessary.
If you want to go to Starbucks every day, cut down on other expenditures so that this becomes possible.
Set goals: Think about what you want to buy in the future (a new phone, new car) and set small goals like saving $500 per month or 10% of your income each year until they become reality.
3) Set up automatic payments
It’s not always easy to keep track of your finances, but you can make it a lot easier by setting up automatic payments.
For example, you might set up automatic payments from your checking account or an online bank account on the 1st of every month for your loan payment.
This will help ensure that you don’t forget about it, and it will also help get the money out of your checking account so that you can’t spend it.
You should also set aside some savings: If you put aside 10% of your paycheck each month, then at the end of the year you’ll have enough saved up for a down payment on a house!
The last step is to live within your means: Make sure that you only spend as much as you earn.
If it takes six months for your paycheck to show up in your account, then take care not to buy anything expensive until then!
4) Make extra payments when possible
In the same way that you would make extra payments on a mortgage, you can also make extra payments on your student loan.
Whenever you get a raise or bonus at work, put that money towards your student loans instead of spending it on something else. This is especially effective if you have low-interest loans.
5) Refinance your loans
Refinancing your student loans can be a great way to help make your payments more manageable and you may also find that you are able to save money.
To refinance, you will need good credit and a steady job with an income that is sufficient enough to cover the monthly payments.
There are several companies that offer student loan refinancing options, so it should not be too difficult or time-consuming to find one that suits your needs.
6) Consider income-driven repayment plans
To help you save money, consider an income-driven repayment plan. Income-driven repayment plans reduce your monthly payments based on your income and family size.
They also forgive any remaining balance after 20 or 25 years of qualifying payments.
The three income-driven repayment options are:
Pay As You Earn (PAYE) -Income Based
Repayment (IBR) -Income Contingent
Repayment (ICR). The majority of borrowers should take the standard 10-year repayment option.
For those who need more time to repay their debt, there is a 20 year income-based plan available called PAYE with transitional relief that offers lower interest rates than IBR and ICR.
There is no forgiveness on federal loans under these programs but it may be possible in some states so check with your lender if this is important to you.
7) Get a part-time job
One of the easiest ways to save money is by getting a part-time job. Think about what you can do, how much time it will take and if it’s something you’re interested in.
Keep in mind that this will also eat into your free time.
However, if it’s worth it and you can afford the lost free time, then go ahead and start applying!
There are a lot of people who work full-time jobs but still find time to work another part-time one or two jobs on the side as well. It all depends on what you think you’re capable of juggling.
If possible, it might be better to get a part-time job before graduating so that you have some financial security while starting out in life after college.
Not only will it give you an opportunity to make extra cash, but you’ll also learn skills that may come in handy later on when looking for a job (depending on the type of part-time job).
For example, working at a restaurant may teach you useful cooking skills that could help you land an interview with a catering company or become an event planner.
8) Cut back on expenses
Find ways to cut back on expenses by looking at your monthly budget and see where you can find savings.
If you are willing to make some sacrifices, you might be able to save a few hundred dollars a month.
Cut out luxury purchases such as going out to eat or buying new clothes when these things are not necessary.
Skip the morning coffee from Starbucks and make your own coffee at home instead.
Bring lunch with you so that you are not tempted by fast food.
9) Start a side hustle
One of the best ways to save money is by starting a side hustle.
The idea is simple: do something you enjoy outside of your full-time job that brings in additional income.
This can be as easy as selling items on eBay or driving people around town, or it could be more involved like working as an Airbnb host or renting out a room in your home.
Remember, the key here is to choose something that generates a little bit of cash each month; if this takes up too much time or leaves you feeling drained and unhappy, then you may want to find another option.
It’s also important not to spend any money from your side hustle until after it has been deposited into your bank account because once the cash is gone, so are those extra dollars!