Getting your finances in order and paying off debt is a frequently-made New Year’s resolution. We all look to the New Year with big plans to be the best version of ourselves but without a plan in place, our resolutions can fade by February.
While paying off your student loans entirely in 2016 may not be realistic, making a plan to pay off that debt helps you stay on track in all areas of your finances. In order to get your year off to a good start, you should know what you’re currently spending, know how much you should save and decide where you can cut expenses.
Save on student loans:
Debt used wisely can help improve your credit and reach your career goals, so don’t beat yourself up for having student loans. Your education got you where you are today and that probably wouldn’t have been possible without taking out loans. However, a high interest rate doesn’t do you any favors, so refinance with Purefy to lower your interest rate and get out of debt faster. By refinancing, you are able to apply more towards your principal amount by lowering your interest rate and/or shortening your term.
See which refinancing strategy is right for you.
Track your spending:
Take a look at your finances, evaluate what you are spending money on, and determine if that is more important than your long term goals. It may seem obvious, but looking at your spending history in black and white helps you to reduce what you spend. Start with your main checking account and take a look at the past three months to give you a picture of trends and where you can cut costs. Make sure you note any transfers you made from savings and what you can do to prevent future withdrawals. There are a lot of great tools to help you manage and track your spending. Mint is a free budgeting tool that links to your bank account. You can see your spending and savings habits broken out by category and amount.
An easy and quick way to save money is to cut out the things you are paying for that you don’t need. Do you really need cable, Netflix, and Hulu? Choose the one you use the most and cut out everything else. With so many on demand options that automatically charge your account, you can save a lot just by canceling the services and products you don’t need. This is an easy way to help take control of your money quickly and free up extra cash.
Set goals for your savings:
With retirement, an emergency fund, investing, and a regular savings account, it can be difficult to save for everything. Put a strategy in place to make sure you are saving your money wisely. Start by building an emergency fund to make sure you have 3 – 6 months of living expenses saved up. Once your emergency fund is in place, divert the money you were putting in that fund to save for other goals like a down payment on a house or investing. Set up separate savings accounts for each goal to keep you organized and on track.
Read more on saving for retirement while paying off your student loans.
Let us help you get out of debt faster by refinancing your student loans and meet your other financial goals in the process. Happy New Year!