Lifestyle changes are scary but necessary for growth and independence. As a new grad, it’s important to consider changing your lifestyle in order to accommodate debt repayment and gaining better control of your finances.
Here are six lifestyle changes you can implement to get you on the right path for paying off your student loans.
1. Create a system for your money
Creating a system for your money is a simple but effective way to stay on top of your finances.
Are you a saver or spender? Knowing how to deal with your spending habits is an important part of successfully managing your money, but that’s not all.
Automating your money will help you avoid making mistakes, like overdrawing your checking account or paying a credit card bill late. Not staying on top of your finances can damage your credit, which can reflect poorly on you when you’re looking to refinance your student loans.
Consider setting up reminders so you won’t forget to make payments, or sign up for automatic bill pay whenever you can. Or use a free online bill payment service to pay your bills on time every month.
You can also link a savings account to your checking account so you won’t be in danger of overdraft charges.
2. Reduce your housing costs
According to a July 2016 study from Apartment List, apartment rental costs fell slightly nationwide.
However, some cities have housing costs that are on the rise, so it’s important to do your research before choosing where to live after graduation. You should also think about choosing a city based on career opportunities available.
The monthly rent for a 2-bedroom apartment in the U.S. currently hovers around $1,300, while a 1-bedroom apartment averages $1,100.
Consider different lifestyle changes and scenarios for how you can save money if you decide to relocate, such as:
- living with a roommate
- downsizing and living in a smaller space
- moving to a city with a lower-than-average cost of rent
- renting out your couch or spare room on the weekends
- extending your commute in order to pay less on housing
3. Move to a walkable city
Owning and maintaining a car is one of the largest household expenses in the U.S.
One way to reduce this expense is by moving to a walkable city with close proximity to entertainment, shops, stores and easy access to public transit.
In addition to tangible savings, you’ll also be healthier and happier in a city where you can walk or bike to activities. In other words, moving to a walkable city can save you a lot more money than just the cost of gas.
4. Foster a side business
Another way to prepare for major lifestyle changes is by starting a side hustle, or a job that earns additional income on the side of your regular day job.
This can be anything from a weekend job you find on Craigslist to something more regular, like delivering groceries on your days off. There are plenty of jobs that pay $16 an hour or more.
Not only will starting a side business help you earn extra money to pay off your student loans, it will help you become familiar with a new city, make new friends and gain new skills. T
5. Build up your social network
When I made a cross-country move from Dallas, TX to Denver, CO I never realized how starved my social life was for like-minded peers and social events. Ever since I came to Denver my network has exploded in less than 6 months thanks to Denver’s up-and-coming tech hub for young professionals.
Hanging out with like-minded peers and making new friends has brought in countless opportunities, jobs, and connections to big companies that I never had in the past. Don’t discount the importance of social networking events where you can meet new people or connect with like-minded peers.
6. Review your loans and bills
Major lifestyle changes are a good catalyst for revising your bills and loans to see where you stand. You may even be able to lower them.
As you move on from one phase of your life to the next you’ll most likely have different expenses to consider. You may have to start researching health insurance options, or if you move to a new state you may have to get new car insurance.
Can you negotiate a lower rate by joining an organization or signing up for automatic bill payment? Most companies are open to reducing your interest rate, or monthly utility bill if you simply sign up for automatic payments. It never hurts to do the research and ask what your options are.
Making these preparations for major lifestyle changes can help you save money on living costs. This will help you aggressively pay down your debt and achieve your financial goals as you move into the next phase of your life.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|