As a parent, it can be disheartening to see your child mired in student loan debt. They’re just starting out and the cards are already stacked against them at such a young age. You may wonder how you can help your child pay off their student loans.
On one hand, you want to help and do what you can, but on the other, you have to look out for yourself and your own financial well-being, especially as you near retirement age.
Luckily, there are small ways you can contribute and help your kids pay off student loans without sacrificing your own finances.
1. Forget the gifts – do this instead
Consider how much you spend each year on Christmas gifts, birthdays, and other special occasions. While everyone loves gifts, I’d venture to say that many student loan borrowers would prefer to have that money you spent go toward their student loan payments instead.
Rather than giving cash, you can typically become an authorized payer on your child’s student loans through their servicer. That way, you can go directly to the source and make payments.
It doesn’t have to be a lot either. Let’s say you typically spend $20 on a gift. Instead of buying something your children may not need or even like, you can help them financially by putting that $20 toward their student loans.
2. Match their payments
“If parents can afford to double down on payments with their children at least every other month, it’s extremely helpful,” said Tonya Rapley, founder of My Fab Finance and the Banish the Balance Challenge, which helps people get out of debt.
“By doubling down, I mean matching their payment,” she explained. “So instead of a $400 payment, they are making payments of $800 at least six times a year. This nudge can significantly speed up the repayment process.”
If you want to support your kids year round, rather than putting money toward loans once or twice a year for holidays, consider matching your child’s student loan payments. By matching payments, you can motivate them to get out of debt even sooner and help make significant progress.
3. Help out their bottom line
A recent report by GoodCall notes that 58 percent of college grads with student loan debt would give up buying a new car, while 59 percent would give up a vacation and 46 percent would sacrifice saving for their future in order to get rid of their loans.
Instead of helping out directly with student loan payments, you can contribute in other small, yet effective ways to help your kids’ bottom line. This frees up some cash for your kids, which then can then put toward their student loans.
To help out, consider the following:
- Getting a gift card to a grocery store
- Helping buy them toiletries
- Purchasing new clothes they need
When I was paying off debt, my mom would occasionally send me a $50 Trader Joe’s gift card and I can’t begin to describe how happy it made me. That was $50 I didn’t need to spend on groceries that month and could allot toward my student loan repayment instead.
A small gesture like that really went a long way for me. Helping your kid buy necessities like food, toiletries, clothes, etc. can help them get what they need, while focusing on their debt repayment.
4. Sign up for Upromise
There’s one way you can make money for your day-to-day spending AND help your kids pay off student loans. Upromise allows you to sign up for their free rewards program by linking your credit and/or debit card. You’ll earn cash back on a variety of purchases including travel, restaurants, groceries, shopping online, and more.
In other words, you could earn cash back for spending that you are going to do anyway. You can cash out your rewards via check or use them to pay down an eligible student loan directly. Signing up for Upromise is a great, hassle-free way to help you earn more specifically to pay off student loans for your child.
5. Refer them for gigs
One way you can help your kids pay off student loans without spending a dime is by referring them for side hustle opportunities that will help them earn extra income.
A side hustle is any gig outside of a traditional day job. Hopefully, your kids have steady employment, but whether they do or not, having a gig on the side can be helpful.
Consider gigs like freelance writing, design services, pet sitting, house cleaning, landscaping, and more. Still need ideas? We got you covered.
When it comes to getting gigs it’s often about who you know, rather than what you know.
Of course, speak to your kids first before recommending them for something and make sure you are both on the same page. Once you both are in agreement and have an understanding of what you are willing to do, you can help refer them to side hustle gigs that can help them earn more money and pay off student loans faster.
There are a variety of ways you can help your kids pay off student loans, from a monetary standpoint and otherwise. Of course, you want to keep your own financial success on track before helping out your kids; using these tips, you can find something that works for you.
You can continue to support yourself while helping your kids pay off student loans. Just be sure to never put your own financial life in jeopardy to help your children, as they still have many working years ahead of them!
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