If you’re a recent college graduate carrying a large wad of student debt, take comfort in the fact that you’re not alone. An estimated 40 million Americans owe approximately $1.2 trillion in student loans, with the average student owing a good $29,000 upon graduation.
To make matters worse, college grads aren’t making enough money to tackle those loan balances in an efficient fashion. With the average starting salary for 2014 graduates coming in at just over $48,000, some newly minted grads are going to extremes to pay off their loans rather than subject themselves to a lifetime of monthly payments and humongous interest charges.
If you’re willing to make some sacrifices to knock out your student debt, here are a few ways you can get the job done:
Live at Home
After several years of independence, the last thing you want to do is come crawling back to your parents’ house so you can once again live under their roof. But in reality, living at home is one of the best ways to stash away as much of your earnings as possible to pay down those loans. If you live at home, you won’t have to worry about paying rent, nor will you have to pay for things like water, electricity, heat, or cable. It may not be an ideal situation, but it’s one that makes loads of financial sense.
Work Several Jobs
If your starting salary isn’t enough to help you make a significant dent in those student loans, you may want to consider taking on additional work to increase your take-home pay. You can try finding a second job on nights and weekends, or doing more flexible freelance work from the comfort of home. If you’re eligible for overtime pay at your primary job, another option is to seek out extra shifts, where you’ll earn time and a half as dictated by labor laws. Yes, it will be a drag, but the good news is that you won’t have to work like a dog forever.
Eat Like a College Student
Food can be a major budget-zapper, so if you’re serious about paying off those student loans quickly, try eating like you used to back when you lived in a dorm. This means foregoing fancy restaurant meals and doing all of your own cooking on the cheap—think instant noodles and lots of potatoes. Will you get bored easily? Yes. Will you find yourself craving takeout on more than one occasion? For sure. Will you save a significant amount of money? Absolutely.
Sell Your Prized Possessions
Sure, your signed sports memorabilia may have sentimental value, but it can also help you pay off your student loans. The same goes for your designer handbags and clothing. It’s nice to have cool things, but there’s something to be said about the ability to walk around debt-free. If that means giving up some of your prized possessions, it may just be worth it. And if you’re really willing to sacrifice, you could even consider trading in your vehicle for a bike. This only works if you live somewhere with public transportation, but as a bonus, you’ll get exercise on top of cash to pay back your loans.
Remember, the longer you carry those student loans, the more money you’ll wind up paying in interest over time. By paying down your debt quickly, you’ll actually save money in the long run. Just as importantly, you’ll free yourself from the burden of carrying a nagging student loan balance—and it’s hard to put a price on that.