So you’ve recently graduated and gone out into the world to get a job, only to find that it’s tough to make ends meet on a basic pay packet, particularly with student loan repayments kicking in.
It’s such a common scenario that it can feel like one you’ve just got to grin and get used to, right? Wrong; with a few savvy maneuvers, you could rejig your finances and continue to pay off your student loan without constantly feeling like your entry-level salary is being completely monopolized by this obligation.
Get your budget in order
Everyone needs a clear, carefully planned budget that takes into account their incomings, outgoings and various financial responsibilities.
It’s important to note that you can make a budget that works even if you’re only employed part-time, so if you’ve got a full time job there’s no excuse to overlook this, regardless of the size of your salary.
The starting point is studying your current spending habits, comparing these with your income, and seeing if there are any places to make savings. You should be able to see if you’re wasting money on things like streaming subscriptions or gym memberships that you don’t really use. You’ll then have the incentive to rethink your expenses and implement adjustments as needed.
Student loan repayments will fall into the category of necessary expenses in your budget, along with things like rent, utility bills and grocery costs. Giving yourself more wiggle room with your disposable income will make these unavoidable outgoings more bearable.
Consider refinancing your student loan
An intriguing option that more people are taking advantage of at the moment is moving their student loan from their current provider to a new lender in order to get a better deal and shrink repayments as a result.
Taking advantage of student loan refinancing or similar deals from other modern lenders could help you account for anticipated interest rate increases, as well as minimizing your repayments right now.
This proves that you don’t just have to settle for whatever current loan arrangement you’ve got, but can take action to trim down the costs of paying off your student debt without making compromises.
The prospect of student loans being forgiven is still up in the air, of course, so in the interim, it’s sensible to make changes under your own steam, rather than living in the hope of a political manoeuvre which might never come to pass.
Earn extra cash to supplement your income
The sad truth is that entry-level salaries are often inadequate to enable recent graduates to cope with the costs of living in the current economic climate. It could be a few years into your career that you’re finally able to command a decent paycheck from your employer, and once again it’s wise to be proactive rather than settling for second best.
This is where mixing things up with a side hustle that generates a secondary income to go along with your salary comes into play.
In the digital era, there are so many second jobs you can do which don’t need to eat into too much of your spare time or leave you staring down the barrel of the minimum wage. Doing freelance work, for example, means you can use the skills you already have to serve all sorts of clients and get paid well for the privilege.
Platforms like Fiverr have helped the gig economy to bloom in recent years, and while there are critics of this reality we’re faced with, for people with a stable job there’s still a lot to be gained from getting an additional income stream started.
Take the next step in your career
Last of all, if you’ve been stuck with an entry-level salary for what feels like an eternity, now could be the time to change things up.
There are a couple of ways to go about this. First, you could ask for a raise in your current role, with the hopes that your hard work and development as an employee will be recognized. Second, you could look for a more senior position in a different organization and start the process of upping sticks in search of a more sizable salary.
Obviously, you need to be tactful about requesting a raise and be prepared to both justify your request and accept rejection gracefully. Likewise, the very act of looking for a better-paid job elsewhere could help you renegotiate your pay packet with your current employer, so there’s a twofold benefit to following this path.
It’s also an opportunity to see how your salary compares with other graduates with the same background and skill set as you. It might become apparent that you’re actually not getting the most competitive package, which again you can harness when putting in a request for an increase.
Final thoughts
There’s no quick fix for costly student loan repayments, but there are ways to mitigate the impact, as you can now see.
So don’t just passively accept the struggle, and instead make moves that will bolster your position and prevent student debt from being a constant worry.
