As a senior, the start of another winter semester is an exciting moment in our career. With only a handful of classes standing in the way of getting our academic degree, the end of our life on campus will be over in a few months. Hopefully, the diploma we’ll be leaving campus with will open plenty of doors – including the one leading to a real adult career.
But that diploma also unlocks other grown-up responsibilities, adding student loan payments on top of regular living expenses. The practicalities of living our life as a grad can leave us feeling a little insecure about our future. If we aren’t sure how we can balance our budget in the real world, these money management tips may help us.
Keep track of loans
With the country’s total student loan debt reaching new heights every year, it’s never been more expensive to be a college grad. Most graduates leave college shouldering more than $37,000 in student loan debt.
Understanding one’s personal debt is sound financial advice regardless of age, career, or financial situation. Simply knowing how much we owe and when it’s due will put in a better position than if we were totally ignorant of our debts.
We should account for everything – federal student loans, private student loans, credit cards, and any personal loans we have in our name. With a diverse list of debts, it’s unlikely the terms of any loan will match up – which means each will have different payment schedules. Need to read up on their terms and conditions to make sure knowing when each of them is due.
Make a budget
A well-made budget should cover all of our debts and their payment deadlines.
That might be a long list depending on our situation. An app like Mint can help ease the stress one may feel. It automates our budget and aggregates all our financial information in one place. From the basic profile, we’ll see how much money we have and how much money we owe. This app can also help develop a payment plan by tracking income and notifying us of upcoming bill payments.
Whether we choose to use an app or to create our budget by hand, the important part is we know how much of our income will go towards our debt. When we understand how much of our paycheck will go towards these payments, we’ll never be left guessing over how much we should pay or how much money we have leftover for other parts of our budget.
Understand our options
Once we complete our graduation, getting a job may be our number one priority. This means we’ll be able to cover loan payments and bills with confidence. Getting one in our area of focus is just the icing on the cake.
The latest employment stats suggest there’s good news in our future. The National Association of Colleges and Employers show last year’s graduates had an average starting salary of roughly $51,000. Meanwhile, grads face only a 4.8 percent unemployment rate.
Some grads will be lucky and earn this average or more within months of leaving campus. For others, a high-paying job won’t come as easily. But there are options for grads who struggle to get their careers off the ground.
- Online Loans: It can take some time getting used to paying bills and student loans. We might be blindsided by a loan payment or unexpected bill if we’re not used to making a budget and following it to the T. If it’s just a momentary slip-up, an online lender like MoneyKey may be able to help us when we hit a rough patch and can’t cover unexpected expenses.
Online lenders offer simple online loans that are often more convenient than personal loans secured through mainstream banks. They also put less of an emphasis on credit history, making them a more forgiving option for recent grads who have yet to build a lot of credit. We can click here to get more info on how they differ from options from mainstream banks – just remember they’re ideal for one-time emergencies.
- Deferment: If our financial issues aren’t due to a temporary mistake but due to long-term unemployment or underemployment, we may have the option to defer our student loans. This service may allow us to put a temporary stop on our monthly payments, or it may reduce how much we pay each month. If we are eligible, we’ll most likely still have to pay any interest that accrues during our deferment period.
- Forbearance: This service is very similar to deferment, in that it may reduce or stop our payments during a specific time period. Unlike deferment, forbearance typically doesn’t require us to pay the interest that accrues during this period. This payment plan is best used when we’re facing exceptional medical expenses or financial difficulties due to unemployment, as it may have similar consequences as bankruptcy on our credit history.
For more information on forbearance and how it differs from deferment, check out this guide. It may help to decide which service is appropriate for any particular situation.
If this is our last semester before we graduate, we’re probably excited to take our final exams and close our books for good. But don’t close our mind to learning – especially when it comes our finances.
Although we may soon be graduate with a diploma in our hand, our education doesn’t stop as soon as we leave campus. If we expect to meet our bills and pay off our student loan debts, we need to make sure we’re informed at every new stage of our post-graduation life.
But If, one is still student -enjoy it! Good luck with the new semester and remember, it’s possible to keep calm once we graduate. Responsible money management is our key to success on- and off-campus.