College graduation is awesome. But student loan debt? Not so awesome. Dying to get out of debt and stay out of debt post-graduation? We can’t give you a winning PowerBall ticket, but we can give you wisdom. That’s priceless. (I know, I’ll be here all week.) Follow these four tips to get out of debt–and then stay out of debt once you’re there!
Get a debt repayment plan.
Most student loans are to be repaid within 10 to 30 years. For a lot of you, the latter is longer than you’ve been alive, so it’s easy to be like, “Psshaw, eff that!” and defer it indefinitely. Pro tip: Don’t do that. The sooner this is out of your hair, the easier your life will be. You can try consolidating your loans into one small monthly payment, but you may end up paying more overall in interest because that usually extends your payment time. If you have a low starting salary at your first job, though, this may be your best bet because you may not be able to afford larger monthly payments.
Establish your own credit right now, that way it’s there when you need it.
That means making those loan payments on time. That means opening a credit card and paying it on time, preferably in full, every month. That way, when the time comes to rent an apartment, buy a house or get a new car, it won’t be complete Hell. Unless, of course, you get an apartment in my building, because my neighbors are loud and their kids never stop screaming and the dad snores so loud I can hear him through the walls. But I digress.
Live within your means.
Or better yet, below them. Don’t worry about keeping up with the Joneses. The Joneses are probably in a buttload of debt. Treat yourself now and then, but if you’re an entry level employee, maybe don’t treat yourself to a Birkin bag. They’re so bland looking anyway.
If your job offers it, enroll and contribute to their retirement savings plan.
Get in on that 401K action if you can. If not, open an IRA and contribute to it whenever you can.
Set money aside every month, even if it’s just a little bit. You’ll want to muster enough to last you between three and six months of living expenses should shiz hit the fan, whether it be a job loss, a medical disaster or anything else scary and expensive. Once you’ve saved that much, save some more in case your rainy days extend longer than that–or in case you eventually want to retire in Boca.