FOR most of us, all we have to worry about at college is getting our papers in on time, and sweating over exam results. Many of us sail through college without a second thought about student loans and how to repay them.
In fact, many students freak out when they imagine those payments stretching out for the foreseeable future and prefer to avoid thinking about it until they absolutely have to.
Unfortunately for most graduates, student-loan debt is a fact of life.
But don’t despair! Be responsible!
Here are a few tips to help you avoid the pitfall of terminal indebtedness.
RULE NUMBER ONE: DON’T IGNORE IT!
Don't kid yourself that what you can't see (the debt), doesn't exist.
While it’s easy for college students to have that mentality, ignoring the loans can shove a student into a deep hole. An individual who wants to pay off debt must take responsibility by knowing how much is owed, anticipating payment due dates, and being aware of the interest being charged for the loan.
A debt can never be paid off if it isn’t acknowledged.
RULE NUMBER TWO: CREATE A BUDGET AND STICK TO IT
Sounds basic but it’s hugely beneficial. Eating and entertaining on a shoestring budget is a way of life for most undergraduates and essential if you are serious about paying off mounting debts.
The simple rule is to live simply and cheaply. Create two tables - one listing your income and the other listing your essential and optional expenses. In your expense table include everything from housing to cinema visits. Be realistic. You do know the true cost of a Saturday night out.
RULE NUMBER THREE: CUT COSTS WHERE POSSIBLE
Get a student bank account. Compare services and charges of different banks. Overdraft limits and related charges are essential matters to investigate before choosing a bank.
Look for discounts whenever and wherever possible. Many shops, restaurants, and bars offer discounts to undergraduate students.
Don't just choose any old utility company to run your electricity, gas, telephone, or Internet - do some research! Get online and compare prices. In the long run, utility bills can add up.
If you can't afford a nice haircut, go to a trainee. Most hairdressers need "hair models," and the trainees are supervised by experienced hairdressers. And to all of you who spend a small fortune to maintain those platinum tresses, maybe it’s time to go natural and put the extra cash towards food and shelter.
RULE NUMBER FOUR: PUT AWAY THE PLASTIC
The best way to handle credit card problems is simple: stop using the credit card or better yet take to it with a pair of scissors!
Unlike student loans, credit card debt falls into the category of bad debt.
It may seem obvious, but many do not understand how reliant they’ve become on credit card use. The temptation to use your card to purchase the latest trendy dress or set of golf clubs can be too overwhelming. It all seems too easy at the time, but credit cards generally have a high interest rate as well as other features that quickly suck away funds, such as fees for late payments.
To avoid this pitfall, you must take an active role, and immediately stop increasing your financial load by throwing away unneeded cards. You can never be too careful when it comes to credit cards.
RULE NUMBER FIVE: DON’T MOVE BACK IN WITH THE FOLKS
Thinking of moving back in with your parents to save money? Think again.
The majority of you will probably end up spending more money on entertainment, social life and cars! Why not move into cheap accommodation with a group of friends or advertise for new roommates.
And you can forget the idea of purchasing a new set of wheels. Buying a swanky car is an expensive mistake, which adds stress to an already tight budget. If you need to be independently mobile purchase a secondhand car, which will save you heaps of bucks.
RULE NUMBER SIX: SAVE FOR THE FUTURE
As hard as it may be, when budgeting DO try and set aside a small amount of money for the future.
Developing good spending and saving habits, and learning to budget and invest during your twenties, can help you prevent needless debt and put away money for the things that are important to you.
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