Strategies For Managing Your Student Loans

You've filed your FAFSA, talked with your college or university about their aid package, and you've been approved for a generous financial aid package. Great! Chances are this package will include a significant amount of low interest student loans that won't require repayment until you finish school. All of the sudden, your bank accounts will swell when the loan funds are distributed and you'll see balances that might dwarf any funds you've acquired through that summer job at the golf course or the local retail outlet.

Don't be fooled. Before you embark on a lifestyle upgrade to baronial lord or lady, remember that these funds indeed spring from loans with accruing interest. Graduation will come sooner than you might expect and the monthly payments will then wait for no man or woman -- no matter how well-educated! Far too many students fall into the trap of squandering their student loan money and falling deeper into debt. (i.e. more student loans) Don't let yourself be one of these hard luck cases. Below, we've outlined some strategies for living within your student loan means.

Don't Go Overboard Furnishing Your Dorm Room Or Apartment
Do you really need a framed Toulouse Lautrec print when a free movie poster from the local art house will suffice? We hope you know what the answer to that one is. And don't bother buying an expensive sound system either. Chances are your resident adviser will ban you from using it at the proper volume anyway. Finally, confine your video gaming needs to free programs from the internet and let the other kids by the latest games.

Budget, Budget Budget
This might be the most important tip of all. Write down what you need to spend every month to make your student loan last throughout the school year and make sure you stick to this plan religiously. Be sure to record all your expenses too. There are many free programs on the internet that make this process a cinch.

Use Two Accounts For Your Loan Money
Don't just dump your whole loan disbursement into your checking account. The first time you have one too many drinks at the campus Rathskeller, you're in grave danger of having to explain to your parents how you wasted your hard-earned financial aid money on an open bar tab for you and a dozen of your "friends." Make sure the majority of your loan balance resides in a savings account that's difficult to access immediately. It's a great insurance policy against your own worst impulses.

Buy Your Books Used, On the Internet
Why pay the extortionate prices at the campus bookstore when you can buy the exact same reading material for 20 percent of the price at sites like Amazon or Ebay? Trust us: This tip is worth its weight in finance 101 textbooks.

Don't Eat Out
If you have an apartment, learn how to cook at home. You're an adult now, after all! If you live in the dorms, swallow hard and learn to enjoy the cafeteria's nightly, nutritionally-balanced offering. Frequenting the campus-adjacent sushi restaurant is fine if your dad happens to be in Warren Buffet's tax bracket. Otherwise, postpone your enjoyment of fine food and drink until after you've paid off your loans early thanks to your prudent frugality. If you must dine out, at least limit yourself to special occasions -- like a date with the really cute library assistant you've had your eye on for months.