049: Money Moves in your 20s
Tip 02: Break up with debts
Tip #2 Break up with debts
Debt is the reality of most young people today. It’s unreal how many graduates come out college with huge debts and many don’t have a real idea if they will get jobs right away.
Your number one focus should be to get rid of college debt, or any other debt as fast as possible. Your future's so bright, that you don’t want to be bugged down by still paying your debts off in your 30s, if possible.
Do your numbers.
- Figure out how much debt you have? How fast can you pay it off.
- By now you have a budget in place, which will allows you to understand what your basic needs are. Most of your discretionary money should be spent paying down your debt. If you have credit card debt, you should focus on paying higher interest rate balance first. (Check out Daily Jui$$e 021: What debt should you pay off first? )
- Adding additional dollars, beyond what you pay monthly (and by the way, remember that a lot of student loan providers give you 0.25% discount on your interest rate, if you set up auto payments) to your debt principal will help you in two ways: Save money on interest paid over time and Speed the time of paying off the debts
- You also might be interested in exploring jobs which help you pay off your loans, for example (Public Service loan forgiveness, if you have public service job, federal government, military service or Peace Corps.)