How to Stay Out of Debt After Graduation

I don’t know any magic tricks for getting out of debt after college. What I do know is why you should save before college and spend less during it. Think about it – attending university is overly expensive. Add food and housing to those costs, and now you understand why students say they’re broke. Going away for college is a life lesson, nevertheless. Yet staying out of debt after graduation is a life hack.
The average debt for a graduating college student is somewhere around $30,000, which is a 25% increase compared to 2008. That is a lot of money to pay back without having an assured job or any work experience! It puts a lot of pressure on you, and adds to the post-college stress. It’s not enough that you must quickly find a job and go through all the new changes in your life; with debt, you must also start paying $30,000 out of your own pocket. Instead of making your way up from scratch, you turn a loss before even having a chance to make a living.

Because we thought you might need some help figuring out your finances, here are some tips on how to stay out of debt after graduation. As I’ve mentioned before – nothing magical, only rationality and logic combined.

1. Save Before College
Because college brings a pile of endless papers and dreadful exams with it, saving before attending is a smart move. Not only you are going to feel relieved after you graduate, but you are going to make your college life easier too. If you think about your finances in advance, you save precious time and effort in the long-run.

For instance, did you know that children who have a college fund on their names are 30% more willing to attend college than kids who don’t? And that people who save money beforehand are more willing to stay away from health problems? Gift of College provides great advice on how to save before graduating, advice that I find necessary for any college student. Education might seem more affordable after consulting with professionals about it, so don’t hesitate to take action!

2. Take Your Time
I know everybody seems to be in a hurry to graduate – you don’t have to. Take your time and stick to your own pace when it comes to important life choices. Don’t hurry. The longer you stay in college, the more money you can save. Instead of graduating in 2 years and getting a career right after, you should not stress about it and go with the flow. You are going to find your true call sooner or later, but not when you are in a rush to enter the job market.
Important tip: while in college, work a lot and save money for repaying loans! More on that on point 4.

3. Apply for Scholarships
You don’t have to pay scholarships back! Apply for as many as possible, and try to nail those applications. If you get many scholarships, you might not even need to apply for loans. Make sure you are determined and perseverant in your applications, and show them why you truly deserve it.
Even if you don’t get the full amount of the scholarship, that’s still more than nothing. It will help you pay those loans back because the sum borrowed will be smaller. Think smartly!

4. Work While in College
One of the best options for working in college is pursuing a paid internship. It won’t only help you gather some money in the long-term, but it will widen your horizons greatly. An internship in your area of interest can be of great help for your future career. They say, “Practice makes perfect.” The more you practice doing what you love, the more expertise you get, and the better you become.
If you are not necessarily interested in an internship, you can work – either part-time or full time – on campus. There are a lot of jobs open strictly for students! Apply for them! Maybe you can even get more than one. You are going to earn your own money and pay for your own food while saving for graduation. Sounds like a plan, doesn’t it? It sounds like adulthood.

5. Pay Off Prioritized Loans
The most annoying loan has to go first, that’s the rule. If you earn enough money, make sure that you repay that one first. Deposit a monthly amount on your savings account and use the bank’s interest rate to expand the sum. At the end of your four college years, you are going to have more money than expected. You might even be able to pay half of your loan, who knows? Try it and see for yourself.

6. Start with the Smallest Loan
If you earn more than enough, you can start repaying loans while in college. No need to deposit the money into a savings account anymore, pay it directly to the bank! Get rid of the small loans with high interest rates first, and then save for the bigger ones. That is a great strategy to use because you literally save money. Better pay a loan with a 20% interest rate and get rid of it shortly than pay a student loan having a 5% interest rate, but keeping the 20% one, right?

7. What is Your Main Goal? 
Least but not last, you need to ask yourself: what are your goals? What are your dreams? What do you want to achieve in the long run? It is sad to work for nothing, and save money towards an objective that you don’t really want. So, sit down, grab a pencil and a paper, and write down:

• Your short-term goals for college: what internships do you want to pursue? What careers interest you the most? What’s the most interesting thing that you like doing? What’s your major?
• Your long-term goals: Where do you see yourself in 5 years? Do you plan on focusing on family or on your career? 

Conclusion
Make sure you have answers to almost all the above questions before going to college and beginning to work. If you don’t have a purpose and a target to achieve, or even a reason for it, you might end up depressed and frustrated. Constantly ask yourself questions and make smart decisions based on your true feelings. If you find answers, start saving smartly!

Author’s bio: Justin is a blogger from Leicester, England, UK. When not teaching his little students and rooting for Leicester FC, he loves to share his thoughts and opinions about education, writing and blogging with other people on different blogs and forums. Currently, he is working as an editor at BestEssays. Follow Justin on Facebook and Twitter.