Surely we’ve all been taught that 10% of our income should go into a savings account, but this can be difficult to do when you’re paying off hundreds of dollars every month in student loans.
Those of us with student loans to repay know it can be tough to juggle debts and saving. Even though the total amount of outstanding student loan debt in the country is at an all-time high —1.31 trillion dollars — it’s still possible for individuals to save money while still paying their student loans down.
Try the avalanche method
If you have a credit card or loan with a higher interest rate, devote as much money to paying it off every month as you can. Make minimum payments on other cards during that time. When it’s paid off, you’ll free up a substantial amount of your monthly income, plus you’ll save money on interest in the long run.
Set small goals
If you’re really strapped for cash, try setting small goals to start. Try saving five dollars per month for a few months, then slowly increase the amount every few months. Eventually you won’t even miss the money you’re putting away, and you’ll set yourself up for success down the road.
Pay your debt on time
This may seem like common sense, but no matter what, it’s important to pay your loans on time. Defaulting can result in poor credit and more money than you originally owed.
Enroll in a 401k or IRA
If your employer offers a 401k, take advantage of it — especially if they offer employee contribution matching. Many employers do, and it will help you save money for retirement without costing you too much money. If your employer does not offer this program, consider enrolling yourself in an IRA. Your monthly contribution could be as low as $10 per month, but set you up for financial success down the road.
Get a part time job
The “gig economy” is booming right now, meaning that there are more opportunities for people to work short-term jobs on their own schedule to make a little extra cash. You can give rides to people, run errands, and much more, and do it only when you feel like it.
Try a savings app
There are apps out there that will help you save money without impacting your lifestyle too much. Try one that rounds up every purchase you make, then puts a few cents into an account with every purchase you make, such as Acorns.
Maximize your tax return
If you’re single and make under $50,000 a year, chances are that you’ll get a sizable tax return. It may be tempting to spend this money on something you’ve been wanting for a long time, but if you put it into a savings account instead, you’ll thank yourself down the road. You could also use this money to make a large dent in a high-interest credit card balance, lowering your monthly payments.
Learn to live lean
This one may be obvious, but living within your means will help you save money. Sit down and make a tight budget, then stick to it. There are many apps that will help you do this. Spend money only on the things you need, not the things you want but can live without.
Put a little extra into your student loan payment
Most student loan payments are preset, but if you pay as little as ten dollars extra per month, that amount will usually be applied directly to the principal of your loan amount — lowering your interest and saving you money over time. It can also help you pay off your student loans faster.
Refinance high interest loans
If your loan has a high interest rate from a private lending institution, do some research and see if any other lenders are offering lower interest rates. This could potentially lower your interest rate and free up some of your paycheck to put into savings. Even if your monthly payment doesn’t change much, you may still be able to save yourself money in the long-term in the form of lower interest.
If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.