Any advice for paying off student loans or budgeting during school/ early in your career?

Absolutely!

Minimize the amount of debt you incur. Learn to distinguish between wants and needs. Don't feel you have to compete with others when it comes to fashion, car, etc. A car needs to be dependable. Nothing more. It's just a car. If you can get by with a bicycle or scooter, go for that! If you are living away from home, look for bargains at second hand stores to furnish your room. (and even for clothes!) Figure out easy inexpensive meals, pack snacks with you, avoid vending machines. Ramen noodles really are food. (occasionally!)

On the flip side, sometimes it's better to get good quality. Such as a good non-stick skillet, which will last longer than three cheap ones!

Protect your credit rating with your life! People with a good credit rating are charged a much lower interest rate to borrow money. Pay your bills on time, don't take a credit card at every store, use a major bank credit card instead. Don't carry a balance that is close to the limit. If you don't do well with credit, function only on cash. Pay as you go.

Look around for inexpensive entertainment. Check out on campus jazz festivals, etc. Sure, it's okay to have a good time, but be mindful of what it is costing. Take advantage of other on-campus services. If you get free printing at the computer lab, use it. Use the healthcare services.

Get renter's insurance. It is inexpensive, and well worth it!

Starting out is hard. No doubt about it. But, it can be done. Good luck!!

Kim

Hi Carolyn, Great question! Unfortunately, student loan debt is ballooning into a crisis for the current generation. Thanks to technology, we have solutions to tackle this problem. There are several ways to get quality education including Massive Open Online Courses (MOOCs, think Coursera, Udacity, Khan Academy etc). Also, many big name companies have started to pay the full tuition for their employees and some cities and states are stepping up to offer tuition free college. Good on you for thinking about this.

Best Wishes

Ranga

Hi Carolyn.

Congratulations to you for thinking about this now! One of the reasons student loan debt is ballooning is because the terms of paying it back may be based on your income once you start working, but those payments may not be enough to cover the interest on the debt, leading to something called "negative amortization". It can be a vicious cycle, so staying out of it at the beginning is the right approach.

I often talk to audiences about living small and mindful spending. Let me explain.

It's so very tempting to use possessions to show your value to others. We are unfortunately trained to do this from an early age, so doing the opposite requires real restraint. Living small refers to understanding the difference between your wants and needs and might result in living with less than your peers, at least temporarily. The key is to understand what your longer term goals are (not having debt, saving for a house or retirement) and to focus on those when you have a spending decision.

Mindful spending is incorporating your goal(s) into every spending decision. Ask yourself if this purchase gets you further or closer to your goal and is it a need or a want. I usually suggest making a game out of it until it becomes second nature. See how many times you can NOT buy that extra whatever, and put the money in savings, instead. Honestly, its tough at first, but it does get easier!

In college specifically, find friends you can borrow/lend clothes from/to. No need to buy something if you can borrow it, instead. Use your meal plan as much as possible, instead of eating out. When you do go out, try heading out for ONE drink instead of making a night of it. Make a sandwich in the dorm or apartment, and then if you head out, order an appetizer instead of a full meal. Mindful spending doesn't have to mean doing without, just doing it a different way. Swap books instead of buying, or buy used. Resell them at the end of the semester. This wasn't available when I was in college, but its a great option.

Make sure you keep a written budget (or use one of the online budgeting apps). Starting this habit early on as an adult will help keep you on track to meet your goals. Although many see budgeting as awful, I prefer to look at it as simply a guide for success.

When you graduate, keep these habits of living small and mindful spending so you can pay more than your monthly payment on your student loan debt. Any excess payments go directly to paying down the principal amount, versus accumulated interest. The more you can pay, the faster you can pay it off. Be sure to look regularly at statements though, as you want to verify for yourself that your money is going into the right bucket. As much as possible, buy in cash versus taking on new debt. You'll never be sorry for having a small monthly "nut", it affords you so many more options in life than being tied to something because you need the money.

Something tells me you're going to be just fine! Best of luck to you.