Why You Should Live Like a Student Until You’re Debt-Free

living with less

It’s not easy being a young professional these days. Graduating into unclear career paths and loads of student debt is enough to make anyone want to rewind to the simpler days of childhood.

As if that’s not enough, there’s an unspoken pressure to have the perfect apartment, wardrobe, and Instagram-worthy life. It doesn’t matter if you earn enough to afford such things, the pressure is on to get them. Because the sooner you do, the sooner you can call yourself an “adult.”

But it’s the actions you take, not the things you own, that signify adulthood. Nothing about having a picture-perfect life is required. In fact, I’d argue that living with less until student debt is paid off is the most adult thing you can do.

Living like you used to in college can lead to some pretty great benefits.

1. You’ll build credit by paying off debt

If having things like a nicer apartment and furniture are high on your list for adulting, then you’re going to need to build credit. After all, it’s not easy to get an apartment without a decent credit score.

If you live like a student for a while, you can apply the money you save to your student loan debt. You can live with roommates, move back in with your parents, or live in a cheaper apartment. Spend a year or more doing this and you’ll be able to build up a credit score that will make you eligible for the apartment you really want.

2. Your “income” will increase when you pay off debt

Living like a student to focus on paying off debt can also help you increase your “income” in the future.

How so? Let’s say you earn $2,000 per month and pay $500 per month for student loans. That’s 25 percent of your income going to debt! But when you pay it off, then you can do whatever you want with that $500 per month (or $6,000 per year).

Paying off debt is a lot like getting a pay raise without even changing a thing about your current job. That’s a lot better than having to change jobs or ask for a raise!

3. You’ll pay less for your debt by paying it off sooner

If you focus on living with less until your debt is paid off, you’re more likely to pay it off sooner. And if you pay your loans off sooner, you’ll pay less for them overall.

U.S. News has a great chart that illustrates this. You can also see for yourself how much you can save overall by using our prepayment calculator.

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Note: If you pay extra on your debt, make sure your student loan servicer processes your payments correctly. As noted by The Washington Post, some servicers don’t automatically apply your extra payments to your balance. Rather, they apply it to next month’s payment due. You can fix this, though. Go to your servicer’s website and make sure the option to send extra payments to the principal balance is checked off. If you can’t find it, give them a call to have them walk you through the process.

4. You’ll get good at distinguishing between your needs and wants

There’s more to cheap living beside the benefit of debt payoff. This type of lifestyle allows you to better distinguish between your needs and wants.

There’s a concept in business called “hire when it hurts.” The idea is to ensure you only hire the kind of people you really need so you don’t waste money on resources you could have done without. Use this concept in your money management and only “spend when it hurts,” and you’ll quickly understand where you need your limited funds to go.

5. Living with less is good practice for mindfulness

If you choose to live with less for as long as possible, you’ll be forced to become more mindful of your spending. In fact, this mindfulness can help you manage your money wisely long after you’ve paid off debt and upgraded your lifestyle.

No matter how much money we earn, we all need to be mindful of it lest we want to spend it on things that don’t really matter to us. Learning mindfulness will make living on a budget easier to do for the rest of your life.

6. Living on a budget will help you appreciate what you have

I’m going to sound like a parent here, even though I’m not one yet: living with less will give you a greater sense of appreciation for what you have.

Over my career, I’ve seen a few fluctuations in income. Because I didn’t practice the mindfulness I mentioned above, I would inevitably spend more freely whenever my income went up. Then I’d make some life change that required me to tighten the budget and suddenly I didn’t feel like I needed the things I thought I needed before.

Instead, I became more appreciative of what I have.

When you live like a student and focus more of your money towards debt payoff, the little bit you spend on yourself will feel a lot more special. Enjoy that appreciation for as long as you can. Because when you let it go like I did, then you could end up wasting money on things you don’t want, need, or appreciate.

7. Less financial obligations = more flexibility for life’s adventures

This is my favorite result of cheap living. The less money you spend on stuff and the less financial obligations you have, the more flexibility you’ll have for life’s adventures.

Want to take a job across the country? It’s a lot easier to pay for that move if you’ve been living like a student and paying off your debt. Get bit by the travel bug? Living with less will make it easier to pack your life away and hit the road. Is your dream house for sale? It’s a lot easier to pay for a mortgage when you’re student loan debt free and used to living on a budget.

Whatever it is that strikes your fancy, the less financial obligations you have, the more flexibility your life will have. If that’s not motivation to live like a student until your debt is paid off, I don’t know what is.

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