Prepare Your Budget for Student Loan Payments by Doing a Test Run
Even a small student loan can be a big shock when you have to start repaying it. When you’re on a tight budget, it’s hard to get used to having to pay a hundred dollars or so every month. To keep things simpler, start saving money before repayment begins.
To get used to your financial life with student debt, it is helpful to prepare to pay off your loan before it becomes an obligation. Consider this in your running expenses so that when the budget actually changes, you get used to it and know what to expect.
Business Insider recommends that you do this during your loan grace period (or better yet, start repaying it during this time). By preparing for this change, you can avoid what Brendan Coughlin, president of Consumer Lending for Citizens Bank, calls a common new alumni mistake: committing to spending you don’t even know you can’t afford. For example, without realizing how much of the monthly budget is paid off the loan, you can sign a lease for a more expensive apartment.
The overall idea is this: test your new spending commitment so you can build and stick to a more realistic budget. And if you do it before it becomes a commitment, you can make mistakes and adjust. Business Insider has more to say on this topic, so be sure to check out their full post at the link below.
Two Biggest Mistakes Recent Graduates Make When It Comes To Pay Back Student Loans | Business Insider