How to Limit Monthly Expenditures So You Can Attack Your Debt
This week, I posted the 45th episode of the Adulting Is Easy podcast. Jamila joined to discuss her journey of paying off $83,000 of student loans in 3 years. Jamila is a wealth of information (pun intended), much of which can be found at jamilastwocents.com. You should definitely listen to learn more about public vs. private student loans, subsidized vs unsubsidized student loans, how she paid hers off, and much more! Here are Jamila’s tips for keeping monthly expenditures low so you can contribute as much as possible to your student loan debt.
Live at Home: If you have generous family members, the best financial step you can take right out of school is to move (back) in with them. Housing is almost every American’s largest expenditure and knocking that rent or mortgage payment right off the top of your expenses frees up a lot of cash flow to put towards student loans.
--> Alternative – Rent Somewhere Cheap: Not everyone gets along with their family, and not every family still has room in their homes for their adult children. If you’re not willing or able to move in with family, try renting out a room or renting a place with roommates.
Use Public Transportation/Don’t Have a Car: Between the purchase price, gas, insurance, and maintenance, transportation sucks a huge percent of Americans’ budgets as well. Jamila saved money by not having a car and using public transportation to get around.
--> Alternative – Inexpensive Car: Not every area lends itself to good public transportation. If you must buy a car, buy a used, reliable one. Then shop your insurance quotes around to make sure you get the best price for the coverage you need.
No Extravagant Vacations: When we think of discretionary spending, we tend to think of the vacation fund. While it is important to recharge from time to time, when you’re committed to paying off your student loans quickly, vacations should be limited both in nature and in number. For example, instead of flying across the country to ski, maybe book a short-term rental an hour or two away.
Limit Unnecessary Spending: Again, it’s OK to live a little while you’re paying off your loans, but entertainment and clothing budgets need to be carefully monitored. Eating out adds up over time, so try to limit this spending as much as possible. Maybe decide to go out once per week or decide to go to two relatively less expensive restaurants. It is necessary to purchase clothing, and if you are a recent graduate, you probably just landed a job that requires different clothing than you wore in college. Don’t go overboard, though, and look for deals whenever possible.
Getting into debt is much easier than getting out of it, however, once you master these cash flow-generating techniques, paying off debt becomes inevitable. Once you’re consumer and student loan debt free, and if you keep even some of your frugal ways, your ability to invest will skyrocket. If you keep your eye on the big picture and stay patient, those debt balances will eventually fall to zero.
Jamila’s story is truly an interesting and inspirational one, and I highly suggest you follow her on Twitter and read her blogs. And of course, listen to episode 45 of the Adulting Is Easy Podcast as well.