A Beginner's Guide to Creating and Sticking to a Budget

Are high student loan payments putting a wrench in your budget? You're not alone. Student loan debt can be daunting, but there's good news. With careful planning and discipline, you can take control of your finances and be on the way toward a life without costly monthly payments. 

In this beginner's guide, we'll discuss the fundamentals of creating and sticking to a budget, with a special focus on how refinancing private student loans can lead to more manageable finances.

Are You Budgeting for Student Loan Repayment?

Before getting started on creating your monthly budget it’s important to understand exactly where your money is going every month and how student loan interest works. Whether it’s a daily UberEats habit or clothing therapy, many people often have unaccounted-for gaps between what they think they are spending and what they actually spend. The impact of unbudgeted spending may not be felt immediately, but it can take a toll over time, especially if the spending makes it difficult to manage budgeting to payoff student loans.

Student loan interest can be another burden on the monthly budget that significantly impacts your repayment journey. Refinancing to a lower or fixed interest rate product can make payments more manageable so that you don’t have to forgo payments to cover regular expenses. At Alt Lending we can help you see the light at the end of the tunnel and get you on the right path toward debt payoff.

5 Steps to Create Your Budget

A good budget is a roadmap that helps you allocate your income towards essential expenses, savings, and debt repayment. While it’s easy to feel like it can control your finances, a successful budget to payoff student loans can actually help you control your money and make it work for you. If you’re ready to tackle your student loan balance with a budget that gets you on the right track, read on for five easy steps to get started.

1. Assess Your Income and Expenses: Start by listing all your sources of income and monthly expenses. This includes rent or mortgage, utilities, groceries, transportation, entertainment, and, of course, your student loan payments.
2. Differentiate Between Needs and Wants: Differentiating between essential expenses and discretionary spending is important to come up with a realistic budget that you can follow. While you can't eliminate needs like housing and food, you may be able to cut back on non-essential items to free up more funds for debt repayment.
3. Set Realistic Goals: Establish clear, achievable goals for your budget. Whether it's paying off a specific amount of student loan debt each month or saving for a financial milestone, having concrete targets will keep you motivated.
4. Allocate Funds for Debt Repayment: Prioritize debt repayment in your budget. Consider allocating a significant portion of your income towards paying off your student loans to accelerate the process.
5. Consider Refinancing: Refinancing your private student loans can be a game-changer when it comes to budgeting. A lower interest rate or even a fixed rate can potentially lower your monthly payments, reducing the total interest paid over the life of the loan and even shortening the repayment period. This can free up more funds in your budget for other financial goals you may have for the future.

Sticking to Your Budget

Creating a budget is just the beginning of managing your finances; the real challenge lies in sticking to it. To stay on track you’ll want to keep a close eye on your spending habits by tracking your expenses but you also need to build in some wiggle room. Setting a budget is not the final step. Sticking to a budget long-term involves regular reviews to make sure it still works for your lifestyle and goals.

Is a raise in your future? Instead of increasing spending on your wants, consider automating increased payments to your student loans to decrease the life of your loan. 

Lastly, remember that there is always room to explore opportunities to cut costs. This could involve negotiating lower bills by shopping around for car insurance or better phone plans or cooking at home more often. 

When you feel like motivation is waning, remind yourself of your financial goals. Maybe it's envisioning a debt-free future or celebrating small victories along the way. Thinking of a future without student loan debt can help you effectively manage your finances and ultimately achieve your financial goals.

Creating and sticking to a budget is a fundamental step toward financial wellness, especially when dealing with student loan debt. By understanding the basics of budgeting, prioritizing debt repayment, and exploring options like refinancing, you can take control of your finances and work towards a brighter financial future. Remember, consistency and discipline are key, but with determination and the right strategies, you can achieve your financial goals and pave the way toward a debt-free life.

Contact Alt Lending For Help Refinancing Your Private Student Loan Today

Are you ready to take control of your student loan debt and work towards a brighter financial future? Let us help you choose the path that aligns with your long-term financial goals. Connect with the Alt Lending team at (844) ALT-LEND (258-5363) to get started!