Students often ask me how to set up a plan that will begin to address paying off student loans and other debts after graduation. My response: Why wait? Depending on where you are in your college education, getting started right now with a plan for eventually retiring your debts is a smart move for two key reasons, along with many others.
First, while you may be focused on securing a job that will provide you the opportunity to work for money when you graduate, the time value of money can only start working for you when you take some action to have your money work for you. Any money you can invest today will immediately start to grow, such that when you are ready to begin to use it to make student loan and other debt payments, you will certainly have much more available than if you wait to get started in a few years.
The second and equally compelling reason is that simply taking the time to consider the issue and create a plan will have a huge impact on the way you view debt, saving and spending. One of my favorite financial social work sayings is “Spend an hour each week with your money.” It simply means that stopping to think about your short and long-term goals will positively impact your ability to achieve them.
Or as I like to say: It’s not the plan that’s important – it’s the planning. Start planning now, and eventually you’ll be able to blow through that pesky debt faster than you think.