Think Carefully About Your Student Debt
For todays young adults, incurring student debt is often a fact of life. A hopeful ticket to career success. Investing in yourself and your future is the right thing to do as long as you go about it with your eyes wide open. Here are some thoughts to help you make the right decisions for you and your money.
Link The Amount of Debt To Your Future Earning Potential
The sky is the limit when it comes to career choices and post secondary education. Whatever your choice, make sure you think rationally about the amount of debt you’re willing to incur. Imagine trying to pay off a $60,000 student loan while enjoying life on a bartender’s salary? Think through how long it will take to pay back, how much it will cost per month and what you will have leftover to live. Remember to consider other options, like working part time or taking a year off to build up your bank account.
Student Loans Are Not “Free Money”
I get upset when I hear that students splurge on big ticket items because they have student loans. Like vacations or big screen TV’s. Don’t get me wrong. I love those things too. I just hope students remember that each dollar they get from a loan must be paid back (with interest) hopefully sooner rather than later.
Be Realistic and Take a Long Term View
You wouldn’t flush money down the toilet or burn money in the fireplace. Treat your student loan the same way. Whenever you incur debt, you get the benefit today. But, you often will make sacrifices tomorrow to pay it off. Like, living with your parents for a period of time after you graduate, forgoing a new car or watching every dollar you spend.
No Idea What You Want To Study? Get Clarity Before You Jump Into Debt
It takes lots of thought, effort and sometimes luck to figure out what direction to take. Very few students know what careers are out there let alone which ones make sense for them. Rather than following your friends to university, take the time you need to make the right decision. Maybe that means trying your hand at a few different jobs first to see what you like. Or talking to as many people as you can about their own career choices. Talk to people who have completed a degree only to re-enroll in a completely different area of study. Their wisdom and advice could help you with your own decisions.
When it comes to your student debt, ask for help/advice from a trusted and respected source. It could mean a world of difference and prevent you from digging out from a mountain of debt.