Essential Steps for Repaying Your Student Loans on a Variable Income

1. Be aware of your regular monthly expenses.
If you have a variable income, it is important to be aware of your expenses. It’s great if your monthly income averages $ 6,000, but if you only need to pay $ 3,000 monthly in business expenses, you have to budget accordingly.

People who have a variable income should also take into account other responsibilities. These include large bills that come in only at certain times of the year, such as car insurance, tax payments, and health premiums. Since you do not know exactly how much money you will earn each month, these loan payments can make or break you.

Knowing your regular expenses as well as knowing your high annual expenses is important. People who have a variable income should be more aware of their expenses, since they never know “if they have income next month.

Related : Westwood College loan forgiveness

2. Know your average values.
Knowing your average monthly income is a great tool to help you decide how high a student loan you can make. It may be scary to send an extra $ 500 to your student loan advisor, especially if you don’t know what the next month will bring.

However, if you have a sense of your average medium and nothing has changed in your business, you can be sure that you can afford a certain payment. It will take time to sort out. If you are new to variable income, you should wait until you can, on average, get a few months of income.

If you have a variable income for many years, you can get an idea of ​​what to expect on average for 12 months. This is my own budgeting trick with my variable income. If I work, my monthly income is likely to increase over time, which allows me to make higher student loan payments until I get rid of my debt completely.

3. Make your student loan bill a priority.
I have several freelancers I hire for my business. These contractors are full-time writers, technical assistance and a virtual assistant who helps me every ten hours a week. I know that I have to pay my team in order for my business to work efficiently, so I must always be sure that I have a certain amount of money in my bank account to pay it every month.

I’m sure that other freelancers have people with whom they can’t live without them, like a regular nanny who helps them do work without children climbing up on them.

If you always ensure that your accounts are covered in these areas, then why should your student loan be less important? In the end, reducing your student loan burden only increases your total net worth. Once your student loan is repaid, you will have more money each month to devote yourself to improving your business or even your retirement account.

Because of these considerations, you should treat your student loan payment as one of the most important bills you have, according to your rent and electricity bill. If you have a little money, you can get rid of your cable, workplace sharing, extra office supplies, and even some of your subcontractors before skipping a student loan account.

Considering your bill at the expense of the student as the main priority and “need”, and not just another monthly bill, you will be more focused on it. And you will be on your way to becoming a free student loan.

4. Get an emergency fund
I do my best to keep an emergency fund at any time. This fund, among other things, convinces me that I always have a backup copy to pay student loans.

An example that can help you is that if you estimate that you can afford to pay a student loan of $ 400 per month, based on your expenses and average expenses, you must continue to pay it every month, always saving while prioritizing with other vital monthly expenses, such as renting or your mortgage payment.

However, if you have a bad month when a key customer does not pay or a large contract does not come, you may be concerned that a payment of 400 dollars besides all your financial obligations. It is in this case that the emergency fund will help you keep your monthly budget on the go. You can borrow from yourself, and as soon as you have a high income month again, you can replenish your emergency fund.

Related : University of Phoenix student loan forgiveness

For more info :

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *