Hi Friendos,
If you have student loans you have probably read that the recent debt ceiling deal included a restart to student loan payments around September 1st. Student loans are a complicated area and I am not an expert in this but can share a couple thoughts: (1) If you are someone who will need to re-enroll in automatic payments, sort out an updated address with your loan servicer(s), or do other administrative legwork, don’t let this slip! Here’s a useful link for you. (2) If you need to re-work your budget to include student loan payments, a good time to start might be now. You can practice making your payments – either do some actual payments sooner than required, or, if that’s not sensible for you (you’re on PSLF, are waiting to see how the Supreme Court debt relief case shakes out, etc), you could make “payments” into a savings account. This gives you a couple months to work out kinks in your budget before payments are required. Then later you can use the funds in the savings account to meet your highest priority financial goals at the time.
This technique can work in other situations as well. Say you have a 2-earner household and one earner is going to quit paid work to do full-time care work at home. You can practice living on the income that will continue and just bank (save) the income of the person who will quit paid work. That lets you transition the household financial practices over time, with some room for course correction, and when the paychecks actually stop you’ve already done the hard problem solving. Or imagine you are considering switching to a lower-paying job. You could try out a budget using only the take-home pay from the potential new job and see how that feels, diverting the extra income to savings in the meantime.
Preparedness is so boring and feels SO good.
-Stephanie
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