5 Ways to Prevent Student Loan Payments From Making Life Miserable


Today’s average college graduate leaves school with about $35,000 in student loan debt. That’s a hefty financial burden, especially in those first few years right out of school.

You may want to aggressively repay your loans, but you’d rather not celebrate your birthday with a cup of Ramen noodles. (A cup of Ramen noodles plus a cupcake, at least, would be nice.)

How do you strike the right balance between paying down debt and still living life to the fullest?

Try these five tips to maintain your sanity while repaying your student loans.

1. Stay in Balance

The key to handling your finances is to learn to balance the seemingly endless priorities competing for your limited income.

In the short-term, you need to make sure you’re fed, clothed, and relatively happy. You may not be able to live the high life, but at minimum, you want a life that’s satisfying and even a little fun (see tip #3).

Developing a monthly budget helps. First, write down how much you spend on necessities like rent, groceries, and utilities. See how you can reduce those categories as much as possible (like taking on a roommate or giving up your cable subscription.)

Next, add categories for long-term financial goals such as building your emergency savings, setting money aside for retirement, and repaying student loans. You may not be able to contribute a ton to these categories right now, but every little bit helps.

Finally, any money that’s remaining can go towards discretionary items, such as restaurants, entertainment, and decorating.

It’s admirable to want to aggressively repay your student loans. Just don’t do it at the expense of your other big goals. Creating a budget and then playing with the numbers is a great way to make sure your money is working as hard as possible.

2. Don’t Skimp on Important Items

There’s thriftiness, and then there’s stinginess.

Sometimes the lowest price isn’t the best decision. For example, eating ramen noodles might be great for your budget, but neglecting your health is a choice that could come back to haunt you — both physically and financially. Fresh fruits and veggies may help you save on doctors’ bills down the road. You’ll also have energy to shine at your job and earn that promotion.

Cheapest isn’t always best. Skimping on insurance, medical care, and car repairs will hurt your budget (and you) in the long run. Be frugal, but be wise about it.

3. Avoid All Thrift and No Fun

Smart money management is a lot like smart food management. While it’s generally best to make healthy choices, allowing yourself an occasional “treat” can keep you motivated.

When you feel like you’re depriving yourself, you’re more likely to become frustrated, which can lead to a big splurge. Build room in your budget for mini-splurges.

Yes, you may want to keep the dining out to a minimum so you can throw more money at your student loans, but it’s okay to allow yourself the occasional coffee or brunch out with friends. This can actually help you stick to your budget in the long run.

4. Imagine the Future

While you’re still young and untethered — no mortgage, no family to support — you can get away with living on a shoestring budget. Later in life, however, cost-cutting may not be quite as simple.

The more you chip away at your student loan balances now, the more money you’ll have later to pay for big-ticket items like a wedding or a down payment on a home.

Keep this motivation in mind when you’re making financial choices. Sure, that swanky apartment looks great now, but downgrading to a smaller place could help you save a few hundred dollars each month. That could help you repay your student loans a few years early and move on to pursuing other goals that much faster.

If you start to feel frustrated by living frugally while you pay down your loans, keep the big picture in mind. Every dollar you can towards your student loans now gives you more freedom in the future.

5. Defend Your Non-Negotiables

This said, don’t live so far in the future that you neglect the present moment. Choose a few favorite activities that you’ll include in your budget, regardless of your student loan balance.

Maybe, for example, you love to ski or snowboard. Several of your friends organize an annual mountain trip, which is one of your favorite memories. Don’t sacrifice this on the altar of student-loan-payoff. Enjoy those trips, even if it means you can only pay the minimum on your student loans for a month or two.

Yes, that’s right: it’s okay to maintain a slower loan payback schedule if you’re conscious about where else you’re spending your money.

Why? Because 20 years from now, you’re not going to look back on your life and remember that you repaid your student loans by age 27 vs. 29. But you’ll definitely remember the annual ski trip with your best friends. These are the moments that can’t be replicated. Grab them while they’re here.

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