Student loans are a reality for millions of recent graduates and even some of us who have been out of school for a while. Americans alone have 1.36 trillion dollars of student loan debt. That's second only to U.S. mortgage debt.
Don't worry! There are plenty of ways to manage your student debt and continue doing what you love. With these tips, you can get out and spend your time traveling while making all of your payments on time!
1. Take a Look at Your Loans Before You Go
Getting ready for a big trip is actually a very good time to re-evaluate your student loans (and the rest of your finances), especially because it has the potential to save you a lot of money. By refinancing your student loans you could save thousands. That's because you may be able to get a better APR, and you can also change the terms of your loan so that your monthly payment feels more manageable.
Even a small difference in the interest rate can make a big difference over the time that you're paying off your loan. With online lenders like CommonBond, you can get an APR starting as low as 2.14%. It only takes minutes to fill out the application, and you're under no obligation to change your loan once you get your free quote.
That cash you're saving can easily go into your travel fund!
2. Consider Consolidating Your Loans
This second tip is closely linked to the first, since in the process of refinancing your loans, you may also want to consolidate your loans. This means that if you have multiple student loans, instead of paying, let's say, three separate bills every month, you can combine all of your existing loans into one.
Consolidating your loans will help to simplify the payment process for you and reduce the time you spend every month administering and worrying about your loan payments.
This is an especially important point for people planning to travel, since you're already going to have a lot of logistics to keep straight. The simpler you can keep your loan payments, the better.
3. Put Things in Perspective — And Into Your Budget!
It can be paralyzing to think about the total amount of money that you owe, especially if you know you're going to be spending the next 20 years of your life paying it off.
It's more helpful to put things in perspective, so once you've refinanced your loans and you have a manageable monthly payment, treat that like you would any other monthly bill that you have to pay.
Take it on a month-to-month basis and you won't feel as limited by the amount of money that you owe. When you're making your travel budget, simply factor in the monthly payment that you'll be making into your overall budget for the time you'll be traveling, and set aside that money before you go. That way, you won't feel like you have to scramble for funds at the last minute.
4. Start a Travel Fund
Figure out how much money you can commit to setting aside for travel every month. Then you can set up an automatic transfer into a special bank account that is dedicated just to travel expenses. Even if you're only putting in a few hundred dollars a month, you'll be surprised at how fast these funds can add up over time.
See also: Best Credit Cards for College Students
5. Create a Realistic Budget
You should think about how you like to travel and be honest with yourself. Frugal travel is not for everyone, so you should consider what your priorities are; maybe you will be just as satisfied going on a shorter trip and putting more emphasis on higher-end accommodations and fancy restaurant meals.
If these types of comforts or luxuries don't matter to you, you can probably get by with a smaller budget, but on a longer trip. (See also: Save Big With These Slow Travel Tips)
Budgeting is all about striking a balance that works best for you while being realistic about how much you can afford to spend on your trip. By weighing these decisions before you leave, you'll eliminate a lot of money-related stress so that you can just enjoy your trip, knowing that you've already budgeted in the funds to cover your student loans.
6. Earn Extra Money for Travel
You're probably already getting excited to go, so if you want to speed up the process you can always consider earning a little extra money to cover your travel expenses.
It's up to you what skills you have and what kind of work you enjoy, but maybe you want to consider getting a second part-time job and putting the money you earn right into your travel account!
Depending on your professional skill set, you can also consider taking on some freelance gigs, since they can be very flexible and add a little something extra to your normal paycheck. While you'll have less free time, this also means less time to be out spending money which can be a big help when you're trying to save money. There are also ways to make money while you’re traveling.
Don't Let Debt Stop You
There's no reason to let student debt paralyze you, and there are simple steps you can take if you're passionate about traveling. It will take a bit of good strategy, combined with some hard work and a proper execution of your plan, but if you're willing to put in the time you can really reap the rewards on your next trip (and even at home).
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