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.
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