Affording college now is difficult. Tuition keeps rising, while incomes have not kept pace. (How could they considering how quickly tuition prices climb?) Nearly 2/3rds of college students graduate with student loan debt, and a fair number also leave with credit card debt.
Now that you’re out of college, if you’re one of the many with debt, it’s time to fix your finances. Better to do it now than 20 years from now when you’re likely married with kids.
Take these simple steps to get your finances in order in no time:
1. Consolidate your credit card debt. Search the Internet to discover your options for personal loans. You’ll likely find that a bank can offer you a much lower interest rate than you are paying on your credit card.
2. Refinance your existing loans. If you have an existing loan like a car loan, see if you can refinance to get a lower interest rate. You can select a bank loan that will help you get more bang for your buck. The less you have to pay in interest, the faster you can pay off your debt.
3. Forego some luxuries to get out of debt faster. Consider having a roommate or two to cut costs. Pack your lunch. Downgrade your cell phone service. Sure, it’s not glamorous, but neither is having debt. The more you can pinch pennies now, the better off you’ll be in the future.
4. Don’t forget about retirement. There is a tendency to want to apply all of your money to your debt to get it paid off as quickly as possible. However, don’t forget about your retirement savings, especially if your employer matches what you contribute. Don’t turn down free money! Plus, remember the power of compounding interest. The more you can save for retirement the younger you are, the better your nest egg at retirement.
5. Work overtime if you can. If you have the option to work overtime or a side job, why not? Sure it will cut into your social life a bit, but it’s only temporary, until your finances are under control. In a few years, you’ll be glad to be debt free.
If you’re a recent college grad in a tight financial bind, don’t despair. There are steps to follow to get yourself out of debt. With dedication, doing so might only take a year or two.