Michael Stummer’s Tips for Paying off Student Loan Debt

Many people in Waco carry a crippling amount of student loan debt. 70 percent of all college students graduate with loans. These loans average $37,000. Paying off student loans is an important step toward achieving financial health and independence. Financial experts like Michael Stummer have 7 proven methods of paying off student loans faster, meaning that people can move on with their financial lives and enjoy new cars, homes, and vacations.

1. Live Below Your Means

When college students graduate and enter the workforce in Waco, they are often surprised by their new standard of living. Just because your cash flow has doubled doesn’t mean you should double your expenses. Try to live below your means as much as possible. Stay in the same inexpensive housing and drive the same car as you did in college. Avoid making expensive and unnecessary purchases. When you keep your standard of living the same as it was in college, you will be able to painlessly pay off your debt with the extra money you have earned.

2. Pay More Than the Minimum

Making only the minimum payment on your student loans will maximize the amount of interest that you need to pay. Make sure that you pay more than your minimum each month. Some people choose to make more than one payment each month. This will help to continually reduce interest, leading to a quicker pay-off timeline.

3. Know the Repayment Guidelines

Become familiar with the terms of your loans before you sign. You may find that you will owe significantly more money than you thought. It is important to keep on top of these situations to avoid becoming too entangled in your student loan debt.

4. Pay Everything on Time

Make sure that all of your payments, including student loans, are made on time. Creating auto-payments from your checking account may help, but make sure that you have the money in your account to cover the payment to avoid excessive bank fees. Making late payments will damage your credit, which may keep you from getting a low-interest home loan or car loan in the future.

5. Don’t Wait for the Grace Period

While many loans have a grace period after graduation, it is smart to start paying right away. You will build a positive habit, and you will be able to pay your loans off at a quicker rate. This will also help dramatically reduce the total interest accumulated during the course of the loan.

6. Make a Budget and Stick to It

Too many young people fail to make a budget, leading to unnecessary spending. Spend time laying out all of your financial obligations and income. Give yourself a small cash allowance each week for items like coffee, lunch, and impulse purchases. Saving money will pay off in the larger payments you can make on your student loan. You may feel that your friends are spending more than you, but it is likely that their student loans are not receiving the right amount of priority in their financial lives.

7. Be Careful with Credit Cards

While it is smart to pay as much as you can toward your student loans, it is not wise to run up credit card debt. Credit cards often have a much higher rate of interest than student loans. Ideally, these should be paid off each month. If you can’t pay your balance each month, make sure to pay more than the minimum payment, just as you would with your student loans.

Enjoy Financial Freedom Sooner

When you concentrate on paying your student loans quickly, you will be able to buy homes and cars much more easily. Following these 7 tips from financial experts like Michael Stummer will help Waco residents create a more secure financial future for yourself and for the family you may have in the future.