If you have multiple loans (student loans, auto loans, or any other type of loans), it can be easy to lose track of your payments and the overall balance of each loan. But, how do I avoid financial stress and stay on top of my debts?
This can lead to some stressful financial situations and even some unwanted side effects like late fees and high interest rates on your loans.
In order to avoid these issues, try out these eight methods to stay on top of your loan payments so they don’t overwhelm you!
How to Avoid Financial Stress
1. Create a monthly budget
If you want to make sure that you stay on top of your loans, create a monthly budget. It is easy! Just take all your living expenses for the month (mortgage, car payment, groceries, utilities, phone bill) and divide them by the number of days in the month.
This will tell you how much money you will need each day to cover these bills. Now just add in any extra expenses (gifts for friends or family, entertainment) and subtract it from your daily amount.
For example, if my budget says I need $300 per day to cover my expenses but I know I’m going out one night this week, then I know I will only have $200 left over per day for other things like fuel and food.
2. Follow Budgeting Apps
There are plenty of apps out there that can help you stay on top. Mint, for example, is a free budgeting app that links your bank account to the app so you can see exactly where your money’s going.
You can set budgets for each category and receive alerts when you’ve exceeded them. It also offers insight into your spending habits which may help you find new ways to save or earn more money.accounts through in order to keep track of their loans.
Other apps like Clarity Money allow you to consolidate all your loans together onto one page with easy access to all the information you need about payments, interest rates, and other helpful information.
For people who have a lot of debt in different places with different balances, this can be a very useful tool!
3. Put it On Paper
Sometimes going the old fashion way may do us more good than we ever thought, to get this done, we’ve listed few ways to put your money on paper.
✓) Make a List – The first thing you should do is create a list of all your loans, checking off the ones that are paid off.
Writing down what each loan is for will help you remember why you took out the loan and how much debt you still have left to pay off. Plus, it will help you keep track of when payments are due.
✓) Figure Out What You Owe – Once you know exactly which loans need to be paid back, figure out the total amount owed.
You can use an online calculator or spreadsheet program like Excel or Numbers to find this information. Be sure not to forget about any fees associated with your loan!
4. Save Money
It can be difficult to stay on top of all your loans, especially if you’re juggling a few at once. Keeping track of your loans will help you know what you owe and make sure that any missed payments are caught up with quickly.
With a little bit of planning and organization, managing your loan debt is doable! Set Up Alerts: Signing up for email alerts from your loan servicer can ensure that you don’t miss important deadlines like upcoming payment due dates or grace periods. Use Trackers. Keep tabs on what type of loan you have by using an easy-to-use tracker tool.
5. Build an Emergency Fund
Having an emergency fund can really help you stay on top of your loans. You may not be able to pay off your loans as quickly, but being able to avoid high interest rates will definitely save you money in the long run.
It’s a good idea for everyone, but especially if you’re struggling financially. Here are some ways to build up an emergency fund
✓) Create a budget that allows you to save 5-10% of what you make per month.
✓) Set up automatic deposits from your paycheck into a savings account so it doesn’t even have time to touch anything else.
✓) Start with small amounts (like $25) and work up from there until you’ve reached your goal.
✓) And remember, it’s better to have something than nothing at all!
6. Know Where You Stand
If you’re struggling with debt, it’s important to know where you stand. To get started, make a list of all your loans. Then rank them from highest interest rate to lowest interest rate.
The higher-interest loans should be paid off first while the lower-interest loans should be paid off last. You can also use a good credit card monitoring service that will alert you when your balance is getting high or if there are any fees you’re unaware of.
If you have more than one loan with a variable interest rate, such as student loans or car payments, you should set up auto bill pay for each of them so the monthly payments are automatically deducted from your checking account.
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7. Use School Resources
One way that schools can help individuals is by providing them with the tools they need to stay organized, track their loans, and budget wisely.
For example, many colleges offer financial counseling services where you can talk one-on-one with a counselor who can review your budget and discuss different approaches for paying off your loans. In addition, there are many helpful websites that provide advice on how best to stay financially healthy while in school.
8. Get Free Help Online
If you’re in need of help, the good news is that there are a number of different resources available for those who don’t have the money to pay for professional assistance.
For example, National Credit Counseling Services offers free budget counseling, debt management plans and more. You can visit their site and seek for help.