Student Loans

Student Loan Repayment – A Beginner’s Guide

Many graduates are unable to land a job within the first 6 months which is sharply followed by loan payments. With no savings, a bleak situation turns grave as many are faced with default on these student loans. Stress level begins to rise often resulting in irrational decisions. This could lead to entrapment into programs of consolidations, deferments etc. Some of these programs could result in financial disaster as they leave graduates in a much worse situation.

Avoid getting trapped and becoming a “defaultee”. Start the student loan repayment process right after taking off that cap and grown! Follow this simple “3 Step Program” You’ll be glad you did!

Step 1

Now that you are a graduate real life begins. Spend less time on texting, emailing, playing internet games, tweeting and on Face book. Instead, start a new type of education–one you probably never learned in college. Get on the computer or go to the library and research all there is about starting a simple Home Business. Learn the difference between a legal and an illegal business, often referred to as a pyramid scheme.

Most Home Businesses can be conducted online as well as offline, or both. Select one that is legal. There should be products or genuine services offered. A business that is simple to understand and easy to operate. One that you will enjoy while you do your job hunting. Also one that takes very little capital to start. A business that you can operate part time successfully while you try to target that desired job in your area of specialization. Once you start earning some money you will not be so tense at your interviews.

Step 2

College life is over–real life kicks in–start budgeting! Use a simple method. Most important and foremost–pay yourself first (10%) of whatever you earn. Use a log and record your monthly income and all your expenses–every bit. At the end of the month subtract your total expenses from your total income. If you have a positive balance i.e. money left over- you are doing GREAT! If you have a negative–that means you have spent more than you earned. You therefore will have to make more money and cut back on your expenses.

Strive to have a positive balance each month. Place this extra into a savings account to build up an emergency fund–up to about 6 months of your average expenses. It does not matter if your left over is only $10 to begin the process– it will grow! Your Home Business may take a little time to take off but with persistence you will find that job even if it’s not the one you desire–better will come!

Step 3

If you had followed through on steps 1 & 2 there should be enough funds in your emergency account to make that first student loan repayment when it comes due. If your Home Business had taken off or you landed your dream job you may be able to leave your emergency account alone, avoided that depressing student loan default, and start on Step3–which is SAVING..

The younger you start, the brighter your future will be.

Had you made a good choice of a Home Business you may now be in a position to start some investing with your profits. Here again is where you will do something that you probably did not learn in college–investment research. Expand your knowledge, listen to the ones who have been there–in other words be cautious. You don’t want to lose your hard earned cash!

Be conservative, stick to CDs until you know what investing is all about.

When you feel a bit secure in your job, your Home Business, and have your loan payment under control it may be time to attack the next leg–that of speed paying down those student loans.

When it comes time for your wedding your spouse will be happier since you did not enter the relationship with heavy debts, including student loans.

Finally-make debt-free living one of your priorities!

How? By operating a profitable part time business that will bridge the gap between your salary and any excess bills that may come your way. In other words–keep your monthly bottom line in the positive–ALWAYS!

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