Get in the black financially after secondary education

 

Finishing university and starting life in the real world is a scary thing. It is even scarier when a graduate has to leave university with a huge amount of debt. 

With university costs up all around the world, more and more students are finding that they need to take out loans in order to fund their further education, which means students are leaving university with higher amounts of debt. While there is no easy solution to paying off student debt, there are tips that graduates can follow in order to successfully manage their debt. 

 

Find a job 

It should go without saying that every graduate should beg 

in job hunting once out of university. The sooner a graduate can have a steady income, the sooner regular payments can be made toward the outstanding balance of student loan. 

Job hunting is never an easy endeavour. If you can only find part time work, consider getting multiple part time jobs with hours equating to the amount of hours found in a full time job. This will ensure that you are maximising the amount you make each week and that you will be able to meet your budget requirements each month. 

Some employers will offer loan repayment aid as one of the job benefits for their newly graduated employees. When looking for a job consider enquiring about this benefit. 

“Advise your bank as soon as you have completed your studies and secured a job. Discuss a suitable time for the commencement of repayment; this could be immediate or you may opt to start a little later. Most student loan programmes are designed with a moratorium on principal and interest for the duration of the course plus another three to six months to allow the student to find a job,” said Paul Elliott, senior manager and head of Personal Lending at Butterfield. 

 

Budgeting 

The first thing graduates should do when leaving university is work out exactly how much they owe 

and work out a proper budget that factors in all monthly expenses along with a monthly loan repayment. When in debt, the best way to move forward and get back in the black is budgeting. 

Your budget should include money for all your bills – such as rent, electricity and phone, food, emergency money and any other expense you may find you have each month.  

After creating your monthly budget, you will then be able to set aside money each month to go toward your loan repayment. You may find that after paying your monthly instalment for your student loan you have more money than you need for your budget. If this is the case then consider paying more than the minimum for your student loan repayment instalment for that month. Doing this will help to pay the loan off faster, and will help to lower interest incurred. 

 

be economical 

Another tip to manage student loan debt is to live on a very strict budget throughout the time you are repaying the loan. Where ever possible try to save money. For example, when grocery shopping b 

uy products on special offer or when driving to work, see if you can start a carpool and alternate days that you drive to save on gas money. 

Even little techniques will make a huge difference when it comes to saving money. 

It is also best to put off major life goals until after you have paid of the majority of your student loan. While this may not fit into the plan that you had for yourself initially, huge expenses like a wedding or buying a house can hinder the repayment of your student loan, leading you further and further into debt. 

 

Pay every month 

The key to paying off student loans is to never, ever miss a payment. Always make sure at least the minimum is paid every month – and that it is paid on time. Lenders can be very unforgiving, and unlike interest free student overdrafts and other non-repayable grants, student loans will incur interest fees and penalties should payments be late or missed. 

As long as the money to go toward 

repaying the loan is set aside each month, then the likelihood that a payment is missed will be slim; however, if at all possible try setting up a direct debit so that the money is automatically taken out of your account each month. A direct debit can help to make the entire process much easier as the exact amount of money will be sent on time, making it virtually impossible to miss a payment. 

“If the loan fund is a revolving one, then your payment is critical in ensuring the continuation of the programme and the ability of others to access loans, so never renege on your debt,” says Elliott. 

 

Seek assistance 

At the end of the day, there is always an option to seek financial advice. While this could become costly, it will help to put you on the right track to bettering yourself financially. Consider speaking to someone at your bank about setting up a financial plan. Similarly, consider discussing with your parents or other financially stable people you know financial planning and ask for advice. 

Tackling student loan debt isn’t an easy task, it could take time and serious effort in order to stay on the right track. After graduating from university remember to get to task as soon as possible, the sooner you begin a repayment plan, the sooner you will find yourself back in the black.  

 

“On full repayment of you student loan, ensure that guarantors are advised that they have been relieved of their obligations. This is normally done by your lending institution but it doesn’t hurt to ensure that it gets done,” says Elliott.