Like many recent graduates, I finished college with a lot of student loan debt. When I first looked at how much I owed, I was sure I would never have enough money to do anything but make student loan payments.
When staring at the big number, it's easy to feel like you have to pay it off as quickly as possible. And while it's true that you don't want to drag out your student loan repayment, at the same time, you don't have to put your life on hold. You can pay down your student loans without giving up or ignoring the other milestones you hope to reach, like buying a home, saving for retirement, starting a family, or even traveling.
Here are three steps you can take to move forward with your life, even if you have student loan debt:
1. Consolidate or refinance your student loans
All of your various student loan payments can add up to a large portion of your cash flow each month. Consolidating your student loans so that you only have one (probably lower) monthly payment can free up cash flow, so you have a little extra each month for the things that really matter to you. Check to see if you qualify for programs like income-based repayment or public service loan forgiveness. There are also private refinancing options that might allow you to save money on interest and keep your monthly payments lower. Find out what you're eligible for to determine what makes the most sense for you.
2. Start saving for retirement ASAP
Now is the perfect time to start planning for retirement. You don't have to wait until you pay off your student loans. In fact, one in three of Fidelity's retirement plan participants have student loan debt.* Starting now means building a stronger future—even if you don't feel like you have a lot of money to spare. Start out by contributing what you can afford to divert from your paycheck (even just 1%–3% is a good start), and check to see if your company offers matching contributions. An employer contribution (often called a "match") means that you get free money to build for retirement, so don't leave that money on the table.
3. Choose your priorities
Don't get so caught up in paying down your student loans that you forget to live your life. Review your priorities for the next few years. What milestones are you working toward? Do you want to build your emergency fund? Save up for a down payment on a home? Start a family? Travel the world? Put money toward those priorities once you meet the minimum requirement on your student loans and save something for retirement. It's easier to feel you are moving forward when some of your money goes toward helping you meet your other life objectives.
As your income improves, and as you meet your other goals, you can speed up your student loan repayment in time. In the meantime, don't stress about it. Instead, continue to research the tools and opportunities that can help you build toward the life you want—while at the same time tackling your student loan debt.