By GEORGE KAMEL
Whether you like it or not (and I can’t imagine you’d like it), you’re going to have to resume your student loans payments in the new year. Specifically, on Feb. 1, 2022. And while student loan relief may be extended again in the future, eventually, you will have to pay back the Pied Piper. So instead of waiting, you need to prepare now.
You may be dreading the end of student loan relief, but listen to me: These student loans don’t have to stick around forever. How do I know? Years ago, I was able to pay off $36,000 of student loans in 18 months. You can do the same thing. And with no student loans, you can live a life with more margin and freedom.
Make sure your information is correct
You may not have made a loan payment in nearly two years—and a lot can happen in that time. Did you get hitched? Change your last name? Move to the mountains to work remotely in an Insta-worthy log cabin? (If it’s all three, my hat’s off to you. Congrats!)
But if you don’t keep your lenders in the loop with your changes, they will assume you’ve gone into hiding. Trust me, the student loan industry doesn’t want you to win — they want your money. Don’t let outdated information give them the chance to screw you with more fees and penalties.
So double-check that your name, address and bank information are all up to date. And while you’re at it, take a look at your payment plan so you’re not surprised.
And if you know you’re going to struggle to pay your bill, tell your lender ahead of time. You may be able to switch to a payment plan that works for your current situation. But don’t wait until relief ends on January 31, 2022, to get this all figured out (looking at you, fellow procrastinators)!
Budget for your student loan payment
Money will up and evaporate from your bank account if you’re not intentional about managing it. That’s why I budget — and why you should too. If you haven’t experienced the joy of using a budget yet, today is the perfect day to start. I want you to manage your money the smart way, using what’s called the zero-based budget.
Just list your income and subtract all your expenses until you get that magical zero. If you end up with a positive number, you’ve got work to do—give those leftover dollars a job. We don’t want our dollars unemployed!
If you end up with a negative number, then you’ve really got work to do. As in, you probably need to cut back somewhere or get a second job to bring in more money. But hey, you’re just an app away from earning some extra cash walking dogs with Rover, delivering groceries with Instacart or Shipt, or driving for Uber or Lyft. I worked multiple side hustles when I was paying off my student loans, and it made all the difference.
Start paying your loans back now
The biggest mistake I see people making during this debt relief period is not paying back their loans, even when they could. Honestly, if that’s you, you’re choosing what you want right now instead of what’s best for your future. That’s a terrible tradeoff. Instead, take advantage of this interest-free period. Pay your loans back now and all the dough Sallie Mae would normally pocket from interest will go toward your principal balance and your freedom.
Yes, paying off your student debt takes time, hard work and a whole lot of sacrifice, but there is a light at the end of this student loan tunnel — a life on your terms. But you’ll never get it if you don’t act. Don’t wait on student loan relief, or for any other government program like Public Service Loan Forgiveness (which currently has an appalling 2% success rate). Take a step toward a life of margin and freedom right now!
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George Kamel is a personal finance expert with a counter-cultural approach to money. He is the host of The Fine Print and EntreLeadership podcasts on the Ramsey Network. Since 2013 George has served at Ramsey Solutions where his goal is to help people spend less, save more, and avoid consumer traps, so that they can make the most of their money. Follow George on Twitter, Instagram, Facebook or find out more about him online at ramseysolutions.com/personalities.