By CATHERINE NEW
Student loans can enable you to get a higher education and launch into the world with a degree. And much research has found that over time, getting a college and/or graduate degree is worth the investment when it comes to your lifetime earnings.
However, when you look at your monthly budget and see so much of your hard-earned income going toward repaying those loans, your degree might not feel worth it. Monthly student loan payments can total hundreds of dollars and stretch out over decades.
When you tack on loan payments to your rent, grocery bills, car payments and other life expenses, it can be a recipe for financial stress and unhappiness. A June 2016 Credit Karma and Qualtrics study found that 70 percent of respondents were kept up at night because of their student loans.
But you can take steps to be happy even with student loan debt. Here's how.
1. Don't let your debt drive your job search.
With your student loans hanging over you, it's understandable to want to take a job that pays you as much as possible. However, that might not make you happy.
An Earnest survey found that student loans are accelerating the timeline for many graduates to find new jobs -- who can afford an unpaid internship these days?
Among millennials who changed their job search strategy, 55 percent said that they accepted a job more quickly than they would have without debt in order to have income sooner.
Older borrowers (aged 35 to 44) were less likely to take jobs more quickly, but more likely to consider different roles or industries than they would have had they not had debt.
In the survey, people who didn't let their debt change their job search were happier with their job than people who did change their search. Among the job searchers who changed their job search due to debt, only 59 percent reported being happy with their job compared to 79 percent of people who had debt but didn't let it determine their job search.
It's just another piece of the increasing amount of research that shows that having a job you love has a high value -- no matter how much money you have in the bank.
2. Negotiate your job offer.
More and more employers are adding workplace benefits to help their employees with student loans, such as contributing a certain amount per year toward each employee's student loans.
That means when you get your next job offer, you might want to consider negotiating for help paying off your student loans as part of your compensation package, whether that's direct assistance with loans or simply a higher salary.
If a higher salary isn't up for negotiation, think about things such as equity in the company or additional vacation days. You could also negotiate for additional skills training.
More than half of people don't negotiate their job offer at all -- and that could mean leaving money on the table.
The added benefit of negotiating is that it could make you feel better about your job, even if you're not successful at getting what you want. An Earnest survey found that people who negotiated their job offer were happier with the job than people who didn't think to do it at all.
According to the survey, 75 percent of people who negotiated their last job were happy with their job, compared to 52 percent of people who said they forgot to negotiate.
So you owe it to yourself to ask for what you want.
3. Refinance your loans.
Who says you have to live with the current terms of your student loans forever?
If you have a high-paying job and excellent credit and you're carrying around private student loans, which have an estimated average interest rate of between nine and 12 percent, you may want to see what you can save by refinancing.
Refinancing your loans could save you money by lowering the interest rate you pay. You may also be able to change your monthly payment to something that better suits your budget.
For example, Earnest uses its Precision Pricing feature to create a personalized repayment plan according to your budget.
Even if refinancing isn't the right fit for you at the moment, you don't have to drive yourself crazy with multiple loan payments each month. If you have federal student loans, you may be able to consolidate them so you have one payment per month, rather than multiple payments.
Just keep in mind that you could end up paying slightly more in interest if you consolidate, as your new interest rate is a weighted average of your existing rates.
4. Spend the money you do have smartly.
While much of your paycheck may go toward your cost of living plus student loans, how you spend the rest of your money can also impact how happy you are -- debt or no debt. Research has shown that when you spend money on experiences, rather than things, it tends to make you feel happier.
This means that you may want to think carefully about how you spend your money -- if you're debating whether to treat yourself to a new set of headphones or your favorite meal for your birthday, you could end up being happier with the latter.
5. Save even a small amount for retirement.
Think about the long game on this one -- you're planning ahead for the happiness of your future self.
Even if you're in your 20s, and especially if you're in your 30s, you may want to consider saving for retirement as soon as you can -- whether that's through your employer-sponsored 401(k) plan (if available) or with an IRA. The sooner you begin, the more time your money has to grow. Check with a certified financial adviser to learn about your options and determine what type of account is best for your needs.
If you don't have a lot of money to spare right now, don't fret -- the power of compounding interest can make even a $100 monthly contribution add up over time, saving your future self a lot of stress and worry.
Student loans may be a fact of your life, but you don't need to let them take it over. By being proactive with your student loans specifically -- and your financial life overall -- you put yourself back in the driver's seat.
Prior to that, Catherine spent a decade in journalism with jobs at Associated Press, Wall Street Journal, and Huffington Post. She graduated from Stanford University and studied journalism at the Columbia University Graduate School of Journalism. Her passion is for consumer advocacy and empowerment through better information and technology. You can read more of Catherine's work on Earnest's blog.
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