Money

Best Debt Advice for Students

For many people, after high school is when they start accumulating debt. It’s not surprising considering that’s when young adults begin to experience their first sense of freedom – and typically get their first credit cards. If they end up going to college or university, then student loan debt just gets added on top of all that.

It’s not just about bad spending habits, either. Tuition continues to rise and reports show that the average student loan is at just over $5,300 per year. But just because the circumstances are stacked against you, doesn’t mean that you can’t take steps now to ensure that you won’t be loaded in debt after graduating.

If you’re finding yourself struggling with debt while in school, it might be time to consider getting some financial debt counselling and make real changes to your lifestyle in order to live debt-free.

Here are some of the best tips you can find about how to do this.

1. Be More Frugal

Students often make the mistake of thinking that after they graduate they will get a job right away and start earning money. The reality is that many people actually end up having to take on unpaid internships or will only receive temporary work after graduating.

With this in mind, it’s important to not spend money that you don’t have in hopes that you can make it up in the future. Take steps to live more frugally and save money by cutting costs where you can.

2. Work Part-Time

Many students choose to not work part-time and instead rely on loans in order to sustain themselves during school. It’s understandable that they would want to focus all their attention on school and not have any other distractions or stresses.

If possible though, consider doing some part-time work and earning some extra cash. Even if it’s only a couple of shifts a week, you’ll have that money to help you out. Just make sure you’re not tempted to use that extra money on unnecessary spending; after all, the goal is to live frugally!

3. Stay Away from Credit Cards and Car Loans

Did you know that student loans are considered “good debt” by credit reporting agencies because they are considered an investment that you should be able to pay back? On the other hand, credit cards and car loans are actually “bad debt” because the interest rates are high and the things you buy with them generally depreciate in value (i.e., cars lose their value as soon as they leave the lot).

It’s highly recommended that you avoid car loans while you’re a student, and if you do get a credit card make sure that you are paying the balance off in full every month. This will help you build good credit and also ensure that you aren’t paying a lot of money in interest fees.

Advice for Graduates

If you’ve already graduated from post-secondary education and you’re swimming in debt, then it’s time to get some help. Consider contacting a not-for-profit credit counselling agency, or look into student loan repayment assistance options.

Don’t let debt be a reality of your day-to-day life. Start making changes now so that you’ll be better off in the future.

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