The Online Degree Dorm Room

online degree programs psychology | How to get out of debt if you’re in

Posted by bposton on December 22nd, 2006 — Posted in online degree programs psychology

I supposed that before I go much farther ranting on about the tremedous amount of college debt most students take on, that I should offer some suggestions on how to get out of debt.

No, I’m not a financial planner, but I did stay at a holiday inn express last night

Anyway, here are some tips that I’ve learned from the real financial folks on how to whittle down the debt after you get out of college - or even before:
Numero Uno - Set Up A Budget

In my opinion this is the first and most important step in the process of bringing down your debt. You need to start tracking your expenses on a monthly, weekly, or even a daily basis to find out where your money is going.

yeah, I know that you THINK you know where it’s going, but beleive me, you DON’T until you track it. :-0

Once you know where the money is going, you can make good decisions about where to curb your spending, and where to focus your debt pay-off strategy.

Number 2 -Pay off high interest before low interest.

This is probably well known, but deverses another mention. Take a look at all your loans, school, credit card, etc and make sure you’re paying off the loan with the highest interest rate. Part of this is also contacting the credit card company and asking for a lower rate. If they don’t give you one, switch to another card that will let you transfer your balance for a low or zero interest rate amount. Then, still work on the loan with the highest interest.

Number 3  It would be wise to stop using your credit card. Only keep it for emergencies.
And by emergency I don’t mean the guys all came over and you want to order 20 pizzas

Number 4. If you happen to already have money in liquid investments, like savings accounts or stock trading accounts, give that money out and pay off your loans with it. YOu can’t justify having money in a savings account that’s earning 3% interest when you have a balance on your loan that you pay 15% on. Understood? Again, you have your credit card to fall back on in a true emergency.

I hope this helps you if you are stuggling with college debt. If you have any other suggestions, feel free to post them.

Ben