Debt reduction and getting out of debt are the greatest concerns for most Americans facing debt. In fact, at every stage of life, many Americans are looking for ways to reduce or eliminate the debt they owe to lenders. So, if you are in a debt when you graduate from college you are not alone.
Many Americans have debts ranging from credit card debt, mortgages, automobile loans, to student loans. The amount of debt causes people to re-evaluate their lives. Often, many Americans have to cut out many things that bring happiness in their lives to fight the debt menace.
Why do people get into debt?
We want good things, and want them NOW! If you are honest with yourself, you will find that you are unwilling to work, save, and pay for the experience or items you want.
Emergencies, especially medical ones, can happen and blow away one’s saving in seconds.
It is unfortunate that most Americans don’t understand how lenders make money. The loan servicing payments in the early years are all interest. This means that taking out a loan and repaying it early when you could have paid in cash is to your disadvantage.
You want what your friends have.
Insecure people tend to be more heavily indebted.
Strategies for staying out of debt after graduation
Are you ready to work on getting out of debt and being financially free? This is the best time to make your plan for debt elimination and to create wealth.
Strategy 1. First, pay off the most ‘annoying’ loan
It will make a lot of sense to first pay off your highest priority loans, or those that makes you the most worried, the most annoyed (or the angriest)! What is your most annoying debt? Identify it; is it your credit card debt, the automobile loan, or your student loan? Paying off this debt will give you peace of mind. Also, you can better focus on the things that matter.
Strategy 2. Pay off the loans with the highest interest rates
This is a sensible strategy because it will enable you to save the most money. For example, you have a revolving credit card debt of $ 5,000 at an interest rate of 15%, and a student loan with an interest rate of 6%. As you can see, it will make better financial sense to first pay off your credit card debt before settling the lower interest student loan. In fact, it will save you money.
Strategy 3. Pay off loans from the smallest to the largest
Paying off the smallest loans is much easier to do and provides you with more visible progress. This helps you build momentum which is a powerful tool. In fact, this will supercharge your finances. Besides, the victory of settling one loan will spur you into action, and you will find yourself paying off the next debt and so on and so forth. On the other hand, paying off the largest debt first may actually feel like you are chipping away at a mountain!
Strategy 4. Focus on what you want your life to be like; your Goals and Dreams
The sad reality is that the average American has to work for 107 days in a year in order to pay taxes. This is a depressing statistic and should cause you to think about your options in life. This is why cunning Americans seek to find legal means to shelter their incomes. In fact, if you have no debt you will find it much easier to free. You can engage in things that make you happy. And, you wouldn’t have to “Labor” anymore.
Strategy 5. Use anthropomorphism
This means giving your debt a personality that you dislike. Consider your debt as someone you despise. In fact, the more you despise your loans, the more you will want to get rid of them.
Now, remember that these strategies are not mutually exclusive. The key is to find the strategies that best suit your situation and stay focused. Also, consider deploying different strategies at different stages in your journey to financial freedom.
If you are in debt when you graduate from college you are not alone. In fact, debt reduction and getting out of debt are the greatest concerns for most Americans facing debt. Moreover, at every stage of life, many Americans are looking for ways to reduce or eliminate the debt they owe to lenders.
The good news is that there are many strategies you can deploy to get – and stay – out of debt after graduation. Hopefully the tips and insights above serve you well!