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You have deferred your student loans longer than you’ve actually been in school. Now you have decided to bite the bullet and pay up. The great paying job you have more than covers your living expenses. Instead of shopping, traveling and enjoying life, you spend the majority of your paycheck paying back student loans. How’d that happen? The good news is you can still live the good life and fulfill your obligations as a law-abiding citizen. Here’s how to budget those ugly loans:

Consolidate Loans or Lower Payment Plans
If you have more than one loan, it may be beneficial to consolidate them into one monthly payment to save money over your payment term. You may consolidate loans at www.salliemae.com. If you don’t choose to consolidate, you may also renegotiate your payment plan. There are several to choose from. The Grad Choice repayment plan begins with lower payments, but increases as the term continues. The Income Sensitive Repayment Plan is based on the individual’s monthly income.

Create a spending plan

Do you know what you spend your money on daily, weekly or even monthly? Most people don’t. The easiest way to track your spending habits is to create a spending plan. Record all sources of income, (i.e., job, inheritance, child support, etc.). Record how much money you think should be allotted to expense categories. Please be realistic!

Expense categories are the categories in which we spend money, such as housing (mortgage, rent, utilities, etc.), automobile (car note, insurance, gas). Don’t forget entertainment (going out on weekends, movies, trips) and personal (salon appointments, massages, toiletries). Set an amount of money that should be spent in each category monthly. For example, allot $100 a month for food/groceries. Total your expenses and subtract them from the total income amount. What’s left over is your net spendable income.

Prioritize your spending
Now that you know how much money you are working with, here’s the hard part: trimming your expenses to save more income. Sure, there are some bills that you can’t lower, but there’s always something you can do to put more cash in your pocket. Will you really “just die” if you don’t get that dress hanging in the front window? Wait until it’s on sale. Try brown-bagging it at work to cut back on food costs. It’s not about being cheap, it’s about spending smart. Use the extra cash to pay at least $10 over your monthly loan payment to cover some accrued interest.

Give Yourself Time to See Progress

Allow about three months to really see the benefits of your spending plan. Track how much money you are able to save each month. Apply some of that income to your loans and other debts.

Get a Part-time Gig
It’s a dirty job, but somebody’s gotta do it. Think because you have a 9-5, part-time jobs are beneath you? Think again. According to the U.S. Bureau of Labor Statistics, 3.8 million men and 3.7 million women worked a second or third job in 2005. Find a job that you are interested in and go for it. Use the extra income to pay off student debts and create a savings, rather than spend it all at the mall. Don’t forget to treat yourself periodically. Most night jobs offer great discounts!

Think Outside of the Box
Okay, you’re making progress. You’ve cut back on some of those unnecessary luxuries. You’re holding down a second job. Now what? Think about your career field and research programs that offer student loan payment and cancellation incentives. In some states, teaching in specific areas for four to five years can loan cancellation. Research other incentive programs at www.fedmoney.org.

Don’t Overlook Helpful Resources
You may not consider yourself a computer geek, but that laptop has a lot of information you can use to help pay down debt. Find out how long it will take you to break Sallie Mae off her moolah with debt calculators at www.nextstudent.com or www.finaid.org.

Be smart. Live life. The Good Life.

Some information taken from www.salliemae.com.

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