Saturday, July 10, 2010

GRADUATED! Cue the loan payments from hell

While this could easily turn into a rant about how the ALA and other organizations need to stop promoting library science degrees like they're the new hotness, I'd rather focus on the ways in which to calm your debtor nerves.

Use loan refunds/surplus to pay your credit cards down, down, down.
I know a lot of people who have used loan refunds to treat themselves to something at the end of the semester. I was certainly guilty of this to an extent, but the looming loan payments made me more concerned about my credit card debt. I used my tax return and all loan refund money to pay my cards off. Now, I'll start repaying my enormous loans, but at least they are currently my ONLY debt.

Live below your means. Get two jobs. Find a way to find extra money.
This is easier said than done, as most of the time if someone used the phrase "extra money" in my presence I would spit my free tap water in their face in amusement. However, just like losing weight boils down to the hard work you put in and calories in versus calories out, money woes often boil down to the same money in versus money out ratio. Unfortunately, loans are a total bummer in the "money out" category, as they're just kind of hanging there, being useless. I got a second job primarily for professional reasons (as an internship for my MLIS program), but the financial reasons are why I keep it up. I'm able to live a lot more comfortably with just a meager extra paycheck. My bills are all paid and I've been able to save money. I am not one of those people who are fortunate enough to have what they call a "savings fund." Currently, I have $2,000 in savings, and that is a huge accomplishment for me. It's almost shameful to admit that, but whatever. Try to set up rules: no going out for drinks on weeknights, or if you do, only during happy hour.

You can cut down frivolous expenses pretty easily. Leave your cards at home. Carry an allotted amount of cash for the week. When that cash runs out, so does your spending for the week. Cook at home. Trader Joe's is cheap and easy.

For lunches at work, I buy hummus, pita, and carrots every Monday on my walk in. These items last me the week. Five days of lunches for $10 is not too shabby, and saves me about $60-80 per month.

Review your repayment options carefully.
Until very recently, I didn't know I had repayment options. It took a lot of digging to uncover what all of the fine print rules mean. Last week, I filed for Income Based Repayment. With loans that are nearly double my annual salary, I couldn't work out the math in a way that would allow me to make payments and not hate my life. I haven't heard back from my loan provider, yet. We'll see.

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