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How to Pay Off Student Loans by Saving Money

Education Personal Finance Saving

How would you like to pay off your student loans?

A woman with spectacles holding a pen in her hand and working on her laptop

As a mother of seven children who are young adults and college educated, I know what it is like to struggle to pay for school and manage student loan debt.

Be free of student loan debt

I believe that every person can be free from the worry of student loan debt and pay them off by following steps to save money.

The key is to free up funds to put toward retiring those debts. It’s also important to write a check (or make a payment online) toward the loan at the time you save the money. If you need to, research repayment plans to make sure you can stay on track.

Otherwise, your hard work at cutting back will only get reabsorbed into the family spending.

Here are some key areas where you can begin to reach that goal.

Save in Your Community

Begin the savings adventure close to home by supporting your local schools and businesses.

  • School Discount Cards

    – Help your favorite student by purchasing their schools discount card, almost every school offers these as part of their fundraisers.Each card costs around $10 and is good at dozens of local businesses for savings on things like oil changes, dry cleaning, haircuts, pizza and more, depending on the card. We saved loads at a local coffee shop’s “buy one/get one free” offer. My friends kept wondering why I chose the same location each time we met for java but I saved $350 over the course of a year!

  • Entertainment.com

    offers a coupon book and costs between $25 and $45. Preview the coupon booklet for your area first. You’ll save on movie theaters, theme parks, sporting events, and at local shops. The average advertised total book savings is $17,000. If you redeem 25% there would be an annual savings of $4250. Even a mere10% redemption is a savings of $1700 per year to put toward student loan debt

Save On Eating Out

Some families eat out more often due to schedules or commutes. Others enjoy dining out at least once a week to have quality time and family fun.

No matter what your reason, you can save a lot of money in this area by implementing simple ideas.

  • Facebook and Twitter

    – Follow local eateries and cafes to get real time alerts on daily specials and freebies. For example, my college daughter, Bethany, follows her fave cupcake shop on Twitter and gets a word of the day for a free treat.

  • Share and Save

    – Split a meal with your partner or friend and order an appetizer to share as well. Drink water instead of soda. You’ll have a healthier wallet and waistline!

  • Local Newspaper

    – Check out your paper’s Lifestyle section for “buy one meal/get one free” offers and special days for special deals.

  • Restaurant.com

    – Want to try out a new restaurant, but don’t want to pay full price? Go to Restaurant.com, a site that issues printable gift certificates. Pay $10-$15 for a $25 gift certificate. We usually buy these on sale for only $3 to save even more. Go to Travelzoo.com or RetailMeNot.com to get the coupon codes for sales. The average restaurant bill for a family of four is $86. A weekly savings is $43 x 52 weeks or $2236 annually.

Save on Insurance

By investing 15 minutes of research, you can save hundreds of dollars on premiums.

Homeowners Policies

– Raise deductibles to at least 3% of the total value of the home and make sure to only insure the replacement value of the dwelling.

Call your provider and tell them you are thinking of switching to another company and Voila! All of the sudden, they are eager to help you reduce premiums in order to keep your business.

If your bank pays your policy, then this could reduce your monthly payments. Most people who do their research can save $250 per year.

Auto – Go to a premium research site like Progressive.com and get several different policy quotes.

Armed with the info, make a phone call to your existing provider to ask for all the discounts that your company may offer to match the best price.

Discounts vary from company and state, but here’s a sampling of possibilities:

  • Bundling

    for combining homeowners and auto policy with the same carrier

  • Non-smoker

  • Good Student

    (A and B honor roll)

  • Car Alarm Systems

  • Storage

    of vehicle in a garage versus car port or street

  • Stay at Home

    rating for vehicles driven by stay-at-home moms or dads

  • Drivers Safety Course

    taken to keep a ticket from appearing on your driving record.

The average savings for those who switch policies is $500 per year.

Save With Good Credit

A good FICO (Fair Isaac Credit Scores) can literally save you thousands of dollars each year on not only auto and mortgage APR rates, but a variety of other areas as well.

These include auto insurance premiums, whether you pay a security deposit for utilities, and much more including whether you may get the promotion or the job since many employers check FICOS.

Each spouse needs to work on their own FICOS since they are separate scores.

You can improve your FICO in only a few months by following three easy steps:

  • Pay on Time

    – Set up automatic payments online for each bill so you are never late.

  • Pay More

    – Even $5 to $10 more than the minimum balance due will indicate you are paying down debt

  • Pay Proportionality

    – Also known as credit utilization. Even if you pay off your cards monthly, make sure that you don’t have more than 50% of the available credit charged on any one card. Therefore, a card with a $5000 limit should never have more than $2500 charged on it at any given time.

Remember that each time you save money, pay down that debt.

For example, if you save $500 on your auto premium, write a $500 check toward your student loan.

There’s a saying, “If you aim at nothing you’ll hit it every time” (tweet this). So aim at becoming free from worry by taking positive steps to save money and pay down your student loans. Also make sure to check out our student loan debt hacks to see if there are creative ways you can pay off your loans more quickly.

Where will you begin to save today in order to pay your debt tomorrow?

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This article is for informational purposes only and not legal or financial advice.
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