How to Pay Off Student Loan Debt While Living in an Expensive City

how to cut expenses

Big lights, busy city, and…big student loan balance? Living in an expensive city and managing your student loan debt can seem downright impossible. After all, in some places more than half of your income could go toward rent.

But if you live in a major city, you can learn how to cut expenses and earn more to pay off your student loan debt. It may not be easy, but it is possible. Before you move to the middle of nowhere to lower costs, give these ideas a try.

Here are seven ways to cut expenses and earn more while living in a big city, so you can rock your repayment.

How to cut expenses

1. Automate your payments

As your payment date approaches every month, you may start to feel a pang of anxiety about your student loan debt. If you’re not careful, you could even forget to make a payment. But there’s one surefire way you can commit to paying down debt: Automate your payments.

This strategy helps San Francisco dweller Lisa Danganan, founder of personal finance blog Lisa vs. the Loans, pay back her student loans.

“Living in the San Francisco Bay Area is getting more and more expensive by the day it seems,” admits Danganan. “But even the growing cost of living won’t stop me from paying back my student loans. Why? Because my bank account is automatically debited each month by my student loan servicer on my normal pay day.”

Automating your payments on (or shortly after) payday ensures you have the funds and can help you avoid missing any payments.

Additionally, some loan servicers offer an interest rate reduction of 0.25 percent if you sign up for autopay. Using this strategy, you can pay your student loans without even thinking about it and potentially save money on interest. Learn more about automating student loan payments here.

2. Get creative with housing

If you live in an expensive city, a huge chunk of your paycheck can be eaten up by rent, leaving you to wonder how to cut expenses. The first, and most obvious, fix is to get a roommate. Having a roommate can help you cut costs and also enhance your social life.

Mario Bonifacio, founder of Debt BLAG, currently lives in New York and is paying back $160,000 in student loan and credit card debt. “The big city has the potential to be expensive — even spectacularly so — but it doesn’t have to be. To save, I focus on the big stuff. I pay less New York rent by having roommates,” says Bonifacio.

Another option is to find a work-trade living situation, such as being a property manager at an apartment or working as a live-in nanny. For more adventurous minimalists, you can always resort to couch surfing or working as a house sitter or pet sitter for your living arrangement. Sure, you give up consistency, but you can save a ton of money in return.

3. Take advantage of free activities

While living in a pricey city may mean paying higher rent than other areas of the country, there are other ways to cut expenses, especially when it comes to your entertainment budget. Cities like New York City, Los Angeles, San Francisco, and Chicago are cultural hubs that offer tons of free activities, from free museum admission days to street festivals and more.

“I make a concerted effort to take advantage of all the free or low-cost options the city offers like, visiting museums, free concerts, or taking urban hikes throughout the city,” says Bonifacio. Instead of paying top dollar for your entertainment, you can enjoy frugal activities in your own backyard.

4. Make more money

Instead of learning how to save money on bills, you can earn more money to put towards your student loan debt. If you live in a big city, there are endless ways you can make extra cash. Big population = more side hustle opportunities.

When I lived in New York, I made extra money by working as a brand ambassador, house cleaner, event assistant, medical study participant, greeter, and pet sitter, among others.

With the rise of apps like Postmates, TaskRabbit, Instacart, DoorDash, Uber and Lyft, you can start making money almost immediately — and in bigger cities, it can be more lucrative because there are more people. Whether you chauffeur people around, complete odd jobs, or run errands for others, these apps make it easy to fit extra work around your regular schedule.

5. Ditch the car

If you live in a city like New York where public transportation is easy and goes everywhere you need to go, consider ditching your car altogether.

Why spend money on a car payment, insurance, gas, and repairs? Don’t forget about parking — you may need to pay hundreds each month for own spot, or battle for street parking and risk pesky parking tickets.

Instead, opt for public transportation. If you only need a car occasionally, consider using Uber or Lyft, or a service like Car2Go or GetAround. Ditching your car could save you thousands of dollars each year.

6. Save money on food

When you live in the city, it’s easy to get wrapped up in happy hours with friends, weekends full of brunch dates, and daily pick-me-ups at Starbucks. All of those things can add up quickly, though.

Instead of going out all the time, cut your food costs by learning how to cook. “I avoid New York food and drink prices by cooking most meals at home, saving meals out for special occasions with friends,” says Bonifacio.

When you do go out, you can still figure out how to reduce expenses as much as possible. Plan outings around Groupon deals or go during happy hour when there are food and drink specials. Another option is to take advantage of local culinary schools; often you can get gourmet meals for a fraction of the price!

7. Negotiate a higher salary

Are you getting paid what you’re worth in the market you are in? While living in a city can mean paying more for necessities, it can also mean higher salaries to adjust for the cost of living.

Check out sites like Payscale to see what others in your field and geographic location are making. You may find out you’re making significantly less. If that’s the case, it’s time to negotiate your salary and ask for more. Even if you’re not making less, if you’ve been in your current position a while and have gone above and beyond, it may be the right time to ask for more.

Negotiating your salary can help you earn more money without doing anything differently. You can use the extra income you earn and put it toward your student loan debt, while living on your old salary. Need tips on negotiating? Learn more about how to master the art of negotiation.

By learning how to cut expenses and earn more, you can successfully pay off student loan debt while living in a city. Depending on how well you can reduce costs and maximize income, living in a busy city could actually help you pay off debt by providing more opportunities.

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