Is the burden of your student loans weighing heavier on your shoulders? Is there something special you would like to buy but cannot afford? Feeling sorry for yourself will not help and will not get you the money you need or the things you want. Savings will!
At this point, you’re probably thinking you can barely get from one paycheck to the next, and saving money is impossible in your situation. Contrary to what you may feel, there are many other people in your situation. Here are the numbers that prove it.
STUDENT LOANS FAST STATS
According to StudentLoanHero Statistics for 2018:
- No less than 44.2 million Americans currently have student loan debts
- Their student loan debts are worth $1.48 trillions
- The delinquency rate on student loans is 11.2%
- Borrowers between 20 and 30 years of age owe monthly student loan payments of $351
These statistics prove you are neither alone nor special, at least as far as your finances are concerned. However, you can stand out from the crowd through your future actions, through what you choose to do in order to cover some of your debts or make your dreams come true.
ARE YOU CONSIDERING REFINANCING OR LEAVING YOUR DEBTS UNPAID?
I hate to break it to you, but these options won’t help. Here is why:
- Refinancing – In order to reduce your monthly payments through refinancing, you would most likely have to extend your loan period. This actually means more debts, over a longer period of time. Even if some loan offers may have lower interest and seem like a way to save some money, they probably have some fees or commissions that will even the balance and take away any gains. Even if they don’t, getting approved will take time and effort that you could invest in something more productive.
- Leaving debts unpaid – It does not help either. Even if the lender has no way to recover their money from you, their debt collection agents will drive you crazy and ruin your reputation. Moreover, you will ruin your credit score and reduce or destroy your chances of ever getting another loan, a credit card, buying a home, or even renting one.
What will help? Here is an idea:
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10 Smart Ways For Millennials To Save Money
You’re probably thinking I’m crazy, and it’s impossible to save money when you can barely make it from one paycheck the next. I used to think the same thing, so I can’t blame you. However, some methods really work. They might work for you too if you give them a chance. Here they are:
1. Set automatic deposits on the same date as your paycheck
Check with your bank and see if they have such deposits, create a PayPal account and set automatic transfers to it, find a way to move some money from your account automatically on the day of your paycheck. Whether it’s $10, $50, or $100, just imagine you didn’t receive it in the first place. You will simply have to get by without it, and I’m sure you will. Within a few months, you’ll have some money set aside to pay off some of your debts or invest in something you really want.
2. Use an online tool to manage your budget
There are all kinds of apps and platforms you can use to organize and monitor your spending. While you can surely do your math without them, they are a great way to see where most of your money goes, and I have a feeling you won’t like it. My wakeup call was the delicious $2.5 coffee I used to get every morning and the weekly cost of getting my nails done. Suffice to say, I make my own coffee and I do my own nails now.
3. Start cooking and inviting friends over
How often do you eat at the restaurant and go out with your friends and family? If you do your math, you will see that the money you spend on one restaurant meal is enough to let you cook for you and your friends or family. You can start with simple recipes, like eggs, fries, and pasta, and move on to more complex recipes when you feel ready. Besides helping you save money, this practice will help you consolidate your relationships, give you a new hobby and prepare you for family life.
4. Buy in bulk
When you live alone, you tend to buy everything in small quantities, thinking you don’t need more. However, if you buy the things you need in bulk, you can save a lot of money. Perhaps your budget won’t allow you to switch to bulk acquisitions from the beginning, but you can start with one or two items, and expand gradually.
5. Use coupon codes and cashback websites
I don’t recommend subscribing to coupon and cashback websites, as they’ll tempt you to buy things you don’t need every notification. However, you should use them when buying something online. Find the website you want to buy from, look up coupon codes online, log in to your cashback shopping account, and get what you need at a discount. While the coupon code helps you pay less, the cashback shopping website gives you back a few percentages of the price you paid as money, credit, or vouchers.
6. Convince your friends or family to accept joint subscriptions
You all need Netflix, the Internet, and other subscriptions available with shared or group packages as well. Instead of signing separate contracts and paying their full price, why not share contracts and save a lot of money?
7. Seek free entertainment
You probably love going to the movies and fancy clubs, but there are ways to have fun without paying an entry fee. Instead, invite your friends to a run or a football game in the park, go to street festivals and outdoor concerts, and take turns at throwing parties. Lookup free social events online and attend them. Nothing beats free entertainment!
8. Trade cab rides for public transportation or rideshare services
I know, taking the cab is easier and more comfortable than taking the sub or the tram. However, the price difference is overwhelming as well, and you can save even more by getting a subscription for the routes you cover often. If you can’t take the sub or the tram, Uber or Lyft could still put some money back into your pocket and get you to your destination.
9. Stay away from credit cards
They seem safe and useful, a gateway to getting what you want when you can’t afford it. What they really do is add up to your already considerable financial burden, and get you into even more trouble. If you’ve already got credit cards and you can’t cancel them or pay them off, cut them, to make sure you can’t use them.
10. Change your thinking
At this point, at every paycheck, you’re probably trying to cover everything you need and want from the money you have. It’s not enough, and the conclusion is frustrating, depressing, and makes you want to spend even more money.
Instead of trying to accommodate your paychecks to a list, you should build the list around your paycheck. Start with the basics, the things you desperately need, and add the things you can afford according to their importance. You will no longer be cutting things off your list but adding them and you will surely feel better.
DRAWING THE LINE – HOW MUCH DID YOU SAVE?
I know: you haven’t saved enough money to pay off your debt and change your life forever. However, you did get by and you put some money aside, and that is a great start.
Even if your savings only pay for a new outfit, a birthday party with your friends, or a gift for your loved one this time, they’re paying for something you couldn’t afford before, something that matters to you.
Every dollar you save is a step forward, a reason to stick to these methods, try new ones, and keep saving. Who knows, one day you may actually be able to say you’re debt-free and you’re saving for something big, like your home, a new car, or even a yacht.
Until that happens, I would love to hear what saving methods worked for you, what you save for, and if you’ve managed to pay off your debts, so don’t hesitate to share your story!
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