Exiting the Grace Period Gracefully.
So you’ve graduated, Instagrammed your way through the ceremonies and parties, anxiously ripped open envelopes stuffed with gift cards, and now you’re basking in the glow of your new-found knowledge and freedom.
Over the next six months, you’ll hopefully line up a new job, or settle into the one you’ve already secured. You’ll learn about 401(k)s and hopefully do your best to avoid sad desk lunches. Or maybe you’ll take the summer off to travel before heading off to grad school. One thing’s for sure — thinking about your student loans is the last thing you’ll want to do. While it wouldn’t be wise to start freaking out right away, it does make sense to use these few months to calmly make a plan for how you’ll tackle those loan payments.
Here are a few tips to get you started!
- Tackle any credit card debt you have.
So…maybe you got lured by the promise of a free pizza during college, and applied for and received a credit card. Maybe that card saved your life when you got stranded in another city for longer than you intended. Maybe you spent it all on new shoes. Whatever the case may be, if you have a credit card and it’s your first one then you probably have an incredibly high interest rate. Carrying a balance will do you no favors, so paying that card off before your grace period ends will be a great way to eliminate an extra bill before Navient comes knocking.
- Start and stick to a budget.
Living it up for the next six months is fine, but it will only make the loss of your excess income that much more difficult when November rolls around. Living well within or below your means right away will take some of the sting out of having a large chunk of your money go to that loan bill.
- Do your research.
Know exactly how many loans you have, who the lender is, and what your interest rates are. Will you consolidate? Do you have private or unsubsidized loans that are subject to different terms? How much do you anticipate being able to pay each month? Will you have to place a deferment or forbearance on your loans? Will you be taking out more loans to continue your education, and if so will you be making interest payments? Take your time to get a handle on the facts (and vocab) regarding all your loans, so when you start having serious conversations about your accounts you’ll be less overwhelmed. And with all that said…
- Do not freak out.
No matter how big or small the loan amount, having the payments come due can make anyone nervous. When you feel as if you won’t be able to survive on your salary and make these payments, feelings of regret and despair can easily creep in. Through preparation, however, you can accept and tackle the task at hand. Confronting and staying on top of your loans is one of the best ways to keep your emotions in check. Ignoring a problem or an obstacle has never made one disappear, and will only increase the anxiety around paying off your loans.
Finally entering ‘the real world’ will have more than its fair share of ups and downs. But your monthly loan payments do not have to take away the joy of starting your career or furthering your education. It’s a part of life that if properly managed, won’t put a dent in all the other wonderful plans you have for your future!