By William Peacock, Esq. on January 7, 2014 11:55 AM
New Year's Resolution #1: start paying attention to my ever-expanding student loan debt.
Now, you may think that NYRs are an idiotic concept. Fair enough. My roommate ranted for forty-five minutes on the subject just last week.
That's fine. Call it a resolution, call it a goal, call it good old fashioned budgeting and finance. Either way, the moment you have a job, your focus should turn to your debt. Here are ten ways to assess the debt, free up cash, and finish paying off your debt long before 2075.
The short version? It puts your total debt, monthly payments, etc. in one place, which is great for planning and tracking purposes.
9. Drive a Crappy Car
My friends drive nice cars. They've decided not to pay their student loan debt and instead, have Maserati car payments and high insurance rates.
As much as I'm left unsatisfied by my fourteen-year-old Honda Civic Si, my repair costs for the past year have been equal to one car payment on a more "lawyerly" vehicle, and my liability-only car insurance costs one-fifth of what full coverage would.
Of course, if your car is always in the shop, and the upkeep is pushing into monthly payment territory, consider a reasonable (used) upgrade. Just remember, car loans often require full insurance coverage.
8. Cut Overhead
Cell phone contracts? Nah, prepaid. Cable TV and Internet? Try the cheapest DSL and forego premium TV. (Grey's Anatomy is available online. after all.)
Don't be a hermit. Loneliness, after all, kills. But instead of spending all night at $9 beer night, live like you're still in college. Pre-gaming with Brass Monkeys or boxed wine can cut your bar tab in half, if not more.
6. Prioritize Payments
Some of your debt carries a high interest rate.
Some doesn't. Pay the high interest debt first. If you can, try getting a forbearance or deferring payments on the low-interest debt while you dump all of your disposable income into the high-interest debt.
5. Get Your Credit Sorted
How terrible is your credit score? Check out CreditKarma. a free credit monitoring service that will allow you to see who's dinging your score.
4. Balance Transferring
Speaking of credit, once your credit score is in order, if you have high-interest credit card debt, consider one of Nerd Wallet's best balance transfer cards to give yourself an 18-month break from interest and a more favorable rate thereafter.
3. Loan Consolidating
This is tough to advise for or against without looking at your individual loans, but it may beat making a dozen small monthly payments.
For federal loans, the new interest rate becomes fixed at the weighted average of your previous loans' rates. As for private loans, you want to compare your present rates with those of the new loan.
Ideally, I'd like to live in San Francisco. I don't, for obvious reasons. I also don't live in Oakland, for very different reasons .
When picking a place to live, you'd like to be where the fun is, but consider the cost of your commute and rent. Just don't move somewhere too cheap. Debt beats death. Just sayin'.
Though if you are feeling brave, there's always Detroit. Nothing beats that town for low cost-of-living.
1. Purge Belongings
Maybe you have one-too-many guitars, pairs of shoes, or tech toys.
You don't need to adopt a Spartan lifestyle, but if you aren't using your old toys anymore, consider flipping them on craigslist or eBay. Less clutter is nice. Less debt is better.
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