At the end of each year, I review my personal finances to see how I’m progressing towards my goals. I also take stock to see if I need to make any course corrections. I refer to this annual ritual as getting my financial house in order. It has proven to be a worthwhile exercise over the years. It’s helped me navigate the inevitable peaks and valleys, and also review my financial goals annually. It especially helped when it came to handling student loan debt.
Student Loan Debt
While I am no longer handling 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 was able to work part-time in school, and full-time during the summers. When I graduated, I had what I considered a modest level of debt.
The Realization of Repayment
After graduating, I remember receiving my student loan statement and payment slips in the mail. It had been several months since graduation. I hadn’t thought much about handling my student loan debt. Because I deferred my principal and interest payments while in school, I didn’t know exactly how much I owed. I didn’t even know 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, I counted the number of payment slips. I realized it was going to be quite some time before I could 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 on the remaining principal balance. The longer it took me to pay off my loans, the more it would cost. So, I sat down and developed a plan. I set up 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.
Discovering Repayment Options
Since that time, student loans, both federal and private, have greatly evolved. There are now many more repayment options available to students and parents to help them handle student loan debt. These include 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.
Making a Repayment Plan
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.