You've made it through graduate school, and you deserve a hearty "Congratulations!" Your grad school degree is your ticket to the best-paying, most interesting jobs, and within a few years you will be enjoying the good life. But if you financed your grad school years with a loan, you are going to have your repayments taking a bite out of your initial salary. There are ways, however, to minimize the effect that your graduate school loan repayment has on your lifestyle.
Do An Honest Financial Assessment
The initial step in taking control of your financial life post-grad school is to sit down and take a hard-nosed look at your money situation. If you're smart enough to have mastered an advanced degree course, you're smart enough to understand the economic reality that you can't spend more money than you make. Make a list of your recurring expenses, from your monthly rent, grocery, and transportation expenses down to the costs of dating and sipping a latte at your favorite coffee bar. You won't be able to start getting rid of your graduate school loan and other debts until you understand exactly where your money is going.
It's just too easy, in the first months of being in the professional world, to rack up huge meal and entertainment expenses, especially when the new paycheck dwarfs any previous ones you may have earned. You may think that you can spend on non-essentials at will, and still not have to worry about covering your graduate school loan payments each month.
Discipline Is The Key
But if you are truly smart, you will forego the trappings of your new financial success for the time being. Stay away from the designer clothes, cars, and addresses until you have paid off most of your graduate school loan, even if you entered the professional world at six figures. Writing that graduate school loan repayment check each month will be a good exercise in learning financial restraint.
By living a comfortable, but not extravagant life, you can use the money you save to increase the amount of your graduate school loan that your pay down each month. You'll pay the loan off faster, saving a tidy sum in interest. You'll also do great things for your credit record. And if your job isn't one which you think you want to stay with for the duration, by getting rid of your graduate school loan and other debts, you'll be in a much better position to walk away and look for that dream career. Even better, most graduate school loan lenders do not saddle their borrowers with penalties for pre-payment.
One more tip: if you allow your lender to deduct your monthly graduate school loan payment directly from your bank account, you may be rewarded with a lower interest rate.
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