Creating a Budget
Creating a realistic budget that includes monthly student loan payments is important in helping borrowers avoid default. A budget is a spending plan that helps borrowers track the money they have available to pay bills, cover expenses, make purchases and save for the future.
Creating a College Budget
Using a budget calculator helps borrowers determine expenses and estimate total available income, including all financial assistance, while in college. Access the U.S. Department of Education's College Budget Calculator.
Creating a Budget After College
A one-year budget broken down on a month-by-month basis will help borrowers get an accurate picture of their economic situation. Access the U.S. Department of Education's Budget Calculator.
Borrowers can use this calculator to compare spending habits to others in the same pay range by entering their monthly take-home income.
Borrowers should avoid the following common money mistakes that can break a budget:
No Savings - When something needs to be cut from a budget, often the first thing eliminated is the contribution to savings. Borrowers should always budget an amount for savings so they will have money available for unexpected costs, such as car repairs.
Reliance on Credit - Credit cards should not be used to make up the difference in a budget. In the end, borrowers will only be in worse shape when it is time to pay the credit card bill.
Failure to Plan for Large Expenses - Unexpected expenses, such as an annual insurance premium, new tires, or replacing a large appliance can catch new graduates off guard. They should plan ahead for these expenses by putting away extra cash each month.
Blowing Extra Money - Instead of making a big purchase, borrowers should put extra money from a tax refund, bonus, or inheritance aside to build up savings.