If you have student loans and you find yourself spending more than you intended month after month, you might want to consider budgeting. Now budgeting isn’t for everyone. There are plenty of people out there who don’t budget and are able to manage their loans just fine. But for me, not budgeting usually means spending more than I make. And if you’re in debt, you know spending more than you make on a consistent basis won’t get you anywhere except in more debt.
Here are 3 ways budgeting can help you pay down your student loans.
1. Budgeting helps you prioritize your money
When you budget, you might prioritize your bills (student loans!), savings, and/or investments. Once you’ve determined how much money will go to each category, the remaining money is yours to use for guilt-free spending.
Without a budget, I’m not entirely aware of all the bills I have upcoming, and my student loan, saving and investing goals become an afterthought rather than a priority. So for me, budgeting helps me be more intentional and thoughtful when it comes to determining where my money will go, and ultimately helps ensure that in each budget I allocate a significant amount toward my number one goal: student loans.
2. Budgeting helps you keep your spending in check
When I don’t budget (or when I don’t stick to my budget!), it’s likely I run out of cash, and because I’d rather not dip into my savings, I’ll use a credit card if I want to make a purchase. This is pretty irresponsible for an obvious reason: I’m simply adding more debt to my repertoire. And it gets worse: when the next month rolls around and it’s time to budget, I have to allocate however much I spent on that purchase to my credit card company. All of this to say: There’s less money for me to allocate to my future student loan payments if I don’t keep my spending in check with a budget.
3. Budgeting helps you reach your financial goals
I budget now because I have financial goals that I’d like to accomplish in the near future. My goals range from paying off my student loans to obtaining financial independence by growing my net worth, and budgeting keeps me focused on and reminded of these goals. If I didn’t budget now, I’d lose motivation, overspend, and slowly but surely fall farther and farther away from my goals. Bottom line: if you have major financial goals, take the necessary steps now to get there later. For me, that’s budgeting. And maybe that’s the best next step for you, too.
Budgeting has been a great tool in helping me manage my money thus far. I’ve only been at it for a little over two months now, but the results I’ve had are worth the effort it’s taken (and it’s really not that difficult or time consuming!). I highly recommend trying a budget out if you never have before.
What about you? Do you budget? How do you feel about budgeting?
Other posts you might like:
- How I Paid Off $60k of Student Loan Debt in 4.5 Years: A Timeline
- Paying Off Debt? 2 Books You Must Read for Motivation
- 17 Creative Strategies to Pay Off Your Debt
- 3 Major Life Changes I Made on My Debt Free Journey