The average Canadian student graduates university with $28,000 of debt and takes an average of 14 years to pay it back. This means that if the average student graduates at 23 or 24, they will be paying off their debt by 37 or 38. Wow. For some it’s probably not until graduation comes around that the word “debt” comes up in conversation. Quite simply, student debt sucks and many Gen Y’ers are simply tired of dragging it around. For many it’s because it sometimes feels like it’ll never come to an end. I recently discovered an article in the Globe and Mail – one that many of you can probably relate to, no matter what age or stage.
It doesn’t matter where you are in life, this ball and chain called “student debt” has proven to be a slow and painful process for many – especially with things like rent, hydro, transportation and other expenses. Is there even any room for indulgences? If there isn’t, you might be tempted to use the credit card. Maybe not the best idea, but you want to have some fun right?
For those who have adopted good spending habits and put a solid chunk of every paycheque toward your student loan repayment – I salute you! However, I know it can be tempting to finally do “something fun” with your money for a change, instead of always feeling like you’re paying bills, bills, bills!
There are ways to get around this. After all, I agree with the article that you don’t want to accumulate consumer debt on top of your already annoying student debt – not fun. You could very well be experiencing a mental setback as opposed to a financial one. The article mentions three practical rules to ward off those spend fests:
First, choose one thing.
Put limitations in place to stay in control of your finances. Either pick one “big” thing or a couple of little things to save up for each month. That way you can have your cake and eat it too!
Second, use cash for the weekend.
Take out a certain amount of budgeted cash for that particular weekend. The key is – only use that amount, no exceptions.
Yes, visualize. Constantly picture the life you want to live in the joys of post-student debt-hood. It’ll keep you motivated! Maybe you want to travel a bit, or go for dinner with friends often and finally order more than your usual little appetizer (speaking from experience). Understand that indulging every so often is okay, so long as it helps to prevent random bouts of overspending and doesn’t bust your regular budget!
Debt repayment is a lifestyle, and one that you may be living with for a few years to come. Stay consistent, and keep your head up. To be honest, building these good habits will come in handy the day you pay your last dime and boot your student debt out the door! Until then, good luck!