So now you’re done with college and living with a mountain of debt and a job market so bad that you can’t even get hired at McDonalds. After a month or three of looking you manage to get a job riding a lawnmower around for ten bucks an hour. With that, you make just enough money to barely survive while your debt increases. What you need to do is severely cut costs to the point where half your income can actually go to paying off your debt without killing yourself.
Regardless of why you’re drowning in debt, let’s take a quick look at a list of things you thought were essentials that are really just luxuries that you don’t really need.
Lose the Car- Unless you live in a place with no public transportation and you have to travel over 5 miles to work, you don’t really need a car. Ride a bike or take a bus. If you must drive get an old clunker, dump anything that smells like debt.
Move into a Crappy Apartment- Get out of your nice spacious apartment. It’s not a matter of “falling that far”. Taking out a loan to raise your standard of living is dangerous and if you couldn’t afford it in the first place, you will need to lower it.
Get Roomates- It doesn’t matter if you “just need your independence”. Sleeping in a place with someone else helping on the rent can make the difference between sipping tea in front of a fire in the winter or shivering under a bridge.
Buy Cheap Food- Most people think they know what this means. They are wrong, it’s not just Ramen. Buy Potatoes, Flour, Rice, Noodles, and whatever vegetable is in season and cheap. A week’s worth of food can cost $25 or less if you really stick to the cheap diet and won’t result in your developing nutritional deficiencies.
Grow your Own Food- You don’t need a house with a nice garden. In college, I plowed up the flowerbed in front of my duplex and planted potatoes, onions, spices, and vegetables. I didn’t even buy seeds but instead used partially spoiled (uncooked) stuff out of my fridge. If you do this you can push your food bill even lower and improve your diet (usually healthier than when you were spending real money).
Lose the Coupons- What? Coupons save money! Except that there is something cheaper than buying stuff with coupons, and that’s not buying the stuff that the coupons are for (usually fancy boxed processed food). Seriously, stop buying that stuff. Eat your potatoes and the salad out of your garden.
Go through your life, look at each individual thing there and think, “do I really need this?” You might be surprised how much stuff you can cut out. Don’t get caught in the trap of trying to minimize your payment on your loans, because it’ll just make it take even longer to get free from the trap.
Refinance- Once you’ve done all that and you still feel the pinch on your bank account, you should think about refinancing. Find yourself a lawyer and see what you can do about lowering payments, interest rates, and lowering your principal. Also your job slump won’t last forever. If you keep looking you’ll eventually get a higher paying job. At this point if you continue applying these tips you’ll have a large profit margin between your life costs and your income. But don’t give in to the temptation to use your newfound surplus on easing the austerity. Instead, shovel all your extra money into paying off your loan so that you can be free of the burden.
Alan Brady is a real estate and financial writer who spends a lot of time blogging about personal finance and frugality, home ownership and responsible practices for http://www.attorneys.com/loan-modification/