For those of us unfortunate enough to live in countries where we have to pay for our own college education, student loans is a huge problem. There are fewer words or phrases that fill so many of us up with discomfort and despair. “Repayment plans” and “increasing interest rates” are spookier than the next door neighbor’s Halloween decorations. However, here are some practical tips that could help you save up large sums of money to payback your student loans a little faster.
I went to graduate school knowing that I didn’t have the money to pay for it. Living with my parents, I had the privilege of not paying for rent or food and enrolled in school with a part time job and no savings to count on. I knew I would be charged interest on my student loans which is a big financial no-no in my religion. My blase attitude turned to guilt, then panic, and eventual hard determination post-graduation to repay the loans. And I was able to do so with the help of immense privilege, good forturne and the following tips:
1. Paying it back became a priority
I’ve made many promises to myself; I’m going to sleep early, exercise more, and paint more. But because, consciously or subconsciously, I’ve prioritized sleep, comfort and social media, those promises are always left hanging.
It was different with my loans. It preyed on my mind. There were weeks where it was all I talked about with my family and friends. So I set up a schedule, gathered my resources, prayed, and got to work. Every Friday I would sit down, set small goals and check my progress. If I had carried an indifferent attitude of “it’ll get paid eventually,” I don’t think I would have done it.
“[The] progress thermometer doodle became the most motivating page in my journal.”
2. Keeping a progress log
One of the first things I did was bring all the information together. How much I needed to pay, what was the monthly requirement, how long would it take, and more. I drew a goal setting thermometer, and every time I made a payment of my student loans I would mark the date and amount with a colored pen. I signed up for apps such as mint which would calculate my budget and inform me of my over-spending and overall momentum. Overtime that progress thermometer doodle became the most motivating page in my journal.
3. Minimizing social visits
Being an introvert this one comes easy to me. Early on, I realized hanging out with friends was expensive. We’d go shopping, unanimously decide an item was a must have, and then buy it. And then grab a bit to eat, which needed to be washed down with tea and digested with dessert. Going out with friends has to be the most dangerous activity while lugging heavy debt. With this realization I opened a lot of space in my calendar. I chose which invitations to decline which events to leave early. For the friends I wanted to keep constant communication with, there were phone calls and google hangouts to be had.
4. Give personalized gifts
Come summer time and everyone is graduating and getting married. Throw in babies and birthdays and my budget was struggling. While it’s hard to be frugal at major milestones, I opted for less expensive and more personalized gifts for birthdays and bridal showers. I’ve seen others give handcrafted items which are met with much more enthusiasm than my $50 gift card. Another option was to thoughtfully buy something inexpensive which I knew the friend was in need of. I’ll be honest, I struggled with this category, especially because it took more time making the present than buying one. However, knowing my student loans were being paid made it bearable.
“[I] decreased my interest rate and made me incredibly happy to mark off a large chunk of my loans”
5. Participating in ROSCAS
Rotating savings and credit association or ROSCA is known by different names in different communities. South Asians call it “committee”, latin american’s call it “tanda”. Basically it’s a short term interest free loaning system among trusted friends or family. Every set interval of time, say a month, people pool together money which goes to one individual of the group. The individual is selected randomly or based on need. Every interval a different individual gets the collected sum of money until everyone has given what they received. It helps with savings and making big purchases. When I joined my family “committee” that my aunt led, I agreed to put down $350 a month for a 10 month cycle. I received a “loan” of $3500 and put that to pay my student loans. It decreased my interest rate and made me incredibly happy to mark off a large chunk of money.
To read the remaining 5 tips on how to payback your student loans click here for part 2! And let me know what methods you used to pay back your debts.
This post was originally published on March 20, 2017 and updated on October 27, 2019
