At the end of each year, I take the time to review my personal finances to see how I’m progressing towards my goals and to make any needed course corrections. I refer to this annual ritual as “getting my financial house in order.” It’s proven to be a worthwhile exercise over the years, as it’s helped me to not only navigate the inevitable peaks and valleys that occur, but to also review my financial goals on an annual basis.
While I no longer have student loan debt, there was a time when I did. While studying for my bachelor’s degree, I borrowed money to help pay for tuition, fees, and housing expenses. Fortunately, I had been able to work part-time while in school, and full-time during the summers, so when I graduated I was left with what I considered a modest level of debt.
After graduating, I remember receiving my student loan statement and payment slips in the mail. It had been several months since graduation, and because I had deferred my principal and interest payments while in school, I didn’t know exactly how much I owed, or when my payments were due. I can still remember looking at my loan statement and seeing how much I owed and the monthly amount due, then counting the number of payment slips, and realizing it was going to be quite some time before I would be able to pay my loans off in full.
Reality set in. Having taken some finance classes while in school, I knew the high interest rates on my loans would cause interest to accrue rapidly each month on the remaining outstanding principal balance. The longer it was going to take me to pay off my loans, the more it was going to cost me. So I sat down and developed a plan with a monthly budget to manage my finances and pay off my student loans as soon as possible. This was the start of getting my financial house in order.
Since that time, student loans, both federal and private, have greatly evolved. There are many more repayment options now available to students and parents to help them manage their student loan debt, including various income-driven repayment plans, federal loan consolidation, and private student loan refinancing. Each of these options has distinctive features and eligibility requirements, so it makes sense to compare them to one another to see if any meet your needs. You can learn more about federal student loan repayment plan options by visiting the Department of Education’s Federal Student Aid website. To learn more about student loan refinancing and loan consolidation, and which one may be right for you, click here.
Creating a solid financial plan and sticking to it is an important part of any person’s financial well-being. If you haven’t already done so, I highly encourage you to review your financial situation, create a plan, and set a monthly budget. If you need help getting started, U-fi offers several tools including budgeting strategies, worksheets, and financial wellness tips.
Once you’ve created your plan, be sure to review it at least once per year, as your goals and/or financial situation may change. This way you can make any needed adjustments to ensure you stay on track. By keeping your financial house in order you can increase the likelihood of achieving financial success.