We hear so much about the national student debt crisis in the news. The estimated amount of student debt is $1.6 trillion in the U.S. alone, and that number is growing. Yet, it’s rare that we actually talk to each other about it. When’s the last time you talked to your friends about the reality of your student loan debt? Probably never!
Sharing Your Experiences with College Friends
Student loans are a sensitive topic since it can reveal a lot about your personal or even your family’s financial status. But there is a way to be open about having student loans without disclosing all of your personal information or feeling shame about what you owe.
The first step is to find a few close friends you trust. After all, your friends likely already know a lot about you – unique personality quirks and all! You can feel comfortable talking about money, too. According to data from the Federal Reserve, roughly 45 million Americans currently have student loans, and over a third of borrowers are under 30, so chances are your friends have them too.
Having a #RealMoneyTalk with your college friends can be eye-opening and helpful for you to remember that you’re not alone since so many others are struggling with similar problems. One way to initiate this conversation is by discussing your financial aid packages and work-study options. It can be a good confirmation for you to know that your friends are open to talking about finances. This is also an opportunity for all of you to learn from each other through sharing your experiences and finding ways to manage the debt together. Your friends can introduce you to additional resources as well as share their tips and knowledge about various student loans and paying them back. Talking to friends who have already graduated from college is another way to gain insight into how you can pay back your debt post-graduation. Remember, it’s never too early to create a debt repayment plan and start saving while you’re in school!
Think of your friends as accountability partners who can help you prioritize your spending so you can save money toward eliminating your debt. For example, you can all make a pact to not pressure each other to spend money on things you might not need. Giving your friends a heads up that you’re trying to budget more this month and cut down your spending in a certain area, such as eating out less, helps too. Pro-tip for your budgeting — follow the 50-30-20 rule, spend 50% of your income on essentials like rent, insurance, groceries, 30% on personal or lifestyle choices and 20% on savings. You can also budget with the Mint app to make sure you’re staying on track! Family dinner anyone??
Post-Grad Life Adulting Doesn’t Have to Feel Lonely
So you’ve passed your last final exam and graduated congrats! Now you have to start worrying about those bills… Student loans can be an afterthought for most people, including how much they owe – only 42% of Americans are aware of how much student loan debt they currently have or had in the past. Even when you are working towards paying back those loans, you might feel like you’re struggling especially when it seems like your friends are posting vacation pictures on social media or going out every weekend. Being open to talking with your friends about student loan debt can reduce the pressure of dropping cash just to have a good time. There are plenty of ways for you and your friends to balance relaxing and enjoying yourselves while staying frugal. Additionally, to avoid the FOMO, consider a social media break so you can focus on your financial goals and not be influenced to spend money to have fun.
To take your debt repayment plan a step further, try to build healthy spending habits such as avoiding impulse purchases or buying trendy pieces that won’t last long. Another good habit is consistently saving a portion of your paycheck so you can keep reducing your debt instead of letting it pile up and become even scarier. You can do this easily using apps with an automated savings feature or schedule an automatic transfer to your savings account.
Managing your finances is no easy feat, but you don’t have to do it alone. More likely than not, you and your friends are in a similar situation and can relate. Having the #RealMoneyTalk with your friends about your financial hurdles, including your student loans can help everyone feel more confident about tackling that debt and bring you closer together.