Student debt stress is a reality for the majority of graduating college students, and even for many who have graduated within the last decade. One US News article says that in 2012, students who graduated with student loans owed an average of over $25,000.
Student debt stress can lead to reckless financial decisions for some students, as many result in using credit cards just to get by. Learning how to deal with student debt is vital. A BBC News article says that the British Association for Counselling and Psychotherapy found that stress related to financial problems is a huge issue for college students in the U.K., where student debt is less common. Clearly, American students who are graduating with a huge debt load need to learn how to deal with the stress that debt causes.
If you’re struggling with student loan debt and are feeling stressed because of it, here are seven tips to help you deal with the stress:
1. Be realistic
Oftentimes when we’re stressed, we tend to avoid the problem, particularly when it’s financial. But failing to look at your student debt realistically can only lead you deeper into financial issues, compounding the stress down the road. To really deal with your student debt as the underlying cause of your stress, you need to understand exactly how much debt you have. Check out the National Student Loan Database if you aren’t sure exactly how much you owe or which lenders you owe money to.
2. Know your options
If you’re really in a financial pinch, your government student loans, whether they’re subsidized or unsubsidized, offer you some flexible options for repayment. While private loans may not have all these options, you can often get some relief from even these loans by talking to your lender. While options like forbearance or reduced payment plans won’t make your debt go away, they can relieve some of the burden in the short term, making it easier to pay off your debt in the long run.
3. Make a budget
Once you have a realistic idea of how much you owe and how much you need to pay on your loans using whatever repayment plan is best for your financial situation, it’s time to make a budget. Having a budget is a great way to cut down on your financial stress because you know exactly where every dollar goes, and you aren’t constantly digging yourself into a bigger hole. Make a budget based on your current income, and, if you get a bonus, you can decide whether to splurge, save, or spend it on your debt.
4. Have a plan
Once you know what your monthly budget looks like, it’s time to have a long-term plan for getting rid of your student debt. Many students who are able to, often prefer to pay down the debt faster than the ten years allowed by the basic repayment plan. If you’ve used credit cards for college students, though, and are carrying a balance on those cards, it would be wiser to pay down your cards first, since they’ll charge more interest than your student loans. It’s fine to responsibly integrate credit cards into your financial plan, but its best if you carry only a low balance if you can’t pay off the card every single month.
5. Remember what’s most important
Now that you’ve gotten most of your finances into order – even if your financial situation still looks bleak – it’s time to take a step back from the money. Looking at those huge student loan debt balances and your tiny monthly income can be really depressing! Remember that you are not just your financial situation. Whenever you find yourself stressing too much over your student debt – as long as you have a plan in place for dealing with it – step back and think about the things that are most important to you. It’s more important that you find a good job, enjoy your friends and family, and generally enjoy your life than that you have absolutely no debt. However, you might want to find ways to cut back on your spending while doing all that enjoying so you don’t have to worry about your student debt as much.
6. Do something you love
One of the best stress busters is to simply get involved with something you love. Whether you enjoy crafting or reading or playing sports or being with friends – find a way to do that thing at least once a week. Anything that you get completely engrossed in and that makes you feel relaxed afterwards is a great option when you’re dealing with lots of stress.
Exercise is one of the proven ways to release tension in the short term and to deal with depression, insomnia, and stress over the long-term, according to a US News article. Aim for at least thirty minutes of exercise a day, even if it’s just walking your dog or taking a yoga class. Hard exercise like running often releases a rush of endorphins into your body, so you can learn to relax in that post-workout euphoria.
These seven steps are all about balance. The first thing to do when you’re in any tough financial position is to simply take stock of your situation so that you can get your financial choices under control. Once you have a plan in place and are acting on it as best you can, let go of the rest. Just do what you can, be disciplined financially, and otherwise enjoy your life. Eventually, your student loans will be paid off, and by learning to handle your finances properly now, you’ll create a solid foundation of financial practices for your future.