So you are done with high school and are now in college. If you have taken an education loan to complete your education, it means that you are entering into a college with debt. In New York, there is a total of $89.2 billion student loan debt with a $37,800 average. 12.1% of residents in New York owe student loan payments. These stats show that you need to have a clear debt planning strategy to become debt-free in New York City.
Therefore, while in college, you should start debt planning to get out of your debt as soon as you can. If you get into the trap of thinking that you will pay your loan after getting a job then the debt will follow you for many years after college. Even choosing services like debt settlement or debt consolidation to clear off your debts needs debt planning. But most students have no knowledge about debt planning and keep spending money during college while they could have managed that money in better ways. In the article below, we have written about debt planning post-high school.
How To Stay Debt-Free In New York City?
Make a budget
Making a budget is fundamental for debt planning. To prepare a good budget, you must understand your expenses. There are high chances that you may have never budgeted your money before entering college, especially if you have lived with your parents.
A budget is a plan that puts limits on your expenses. To prepare a budget, start by making a list of expenses. First make a list of fixed expenses like rent, books, tuition fees, utilities, and food. Also, make a list of discretionary expenses like clothing and entertainment. Now subtract both these expenses from your monthly earning. Your monthly earnings are the sum of all the money that you get every month. Now whatever is leftover with you, you can divide that to pay installments of your student loan, investing, and saving to secure your future financially.
Live within your means
No matter how perfect the budget you create at the starting of every month, it is of no use if you cannot control yourself from extra spending. During college, it is easy to go out with friends every night, buying expensive electronics, eating out multiple times a week, and planning trip every holiday. However, all of this will leave you in more debt. Therefore, it is important to follow your budget plan.
You should practice self-discipline in spending money. Never spend money on something that you do not need. If you are confused about something then try to live without it and if you can manage, then you do not need it. Remember, during college, you make little money and you have debt over you. Therefore, you should be prepared to make some sacrifices.
Secure your future
Most college students think that they do not need to save money during their college years. After paying all the necessary payments, most decide to use the money for fun activities and outings. But to get out of your debt, you must also avoid unnecessary spending and save money.
Saving in college is hard but you must learn to do it. If you have a problem saving then you can make a goal for which you can save. For example, you can decide an amount for the emergency funds that you need to save. Similarly, you can start saving money for investing, retirement funds, etc.
Avoid accumulating debt
It is easy to use your credit card for unnecessary expenses and thinking that you will pay all the money once you have a job but it is not that simple. Debt accumulates quickly and can become overwhelming before you can even notice. Therefore, always try to avoid getting into more debt. Use your credit card only for necessary expenses. Try to spend as little as possible so that you can pay the bill every month. This will not only save you from debt but also improve your credit score. A credit score is very important in the financial world. A high credit score is going to help you in the future.
Better debt planning
Debt management services are a good way of doing better debt planning. One of them is debt settlement. Debt settlement is a negotiation with your lender to clear off your debt by paying less amount than you originally owe. The second option is debt consolidation. It consolidates all your existing debts into a new loan with lower interest rates. However, both of these will be easy for you if you have a high credit score. Also, it is advisable to hire a professional company for these services.
Once you are out of high school and enter college, you should start thinking about getting out of debt as soon as you can. Do not think that you will pay all your debt once you get a job because that is not going to happen. Your debt will become huge by the time you get out of college and land a job. Start managing your money. Start creating a budget, cut off unnecessary expenses, start saving, and look for different options to clear off your debt. There are many debt settlement companies in New York. You can choose any one of them.