In a New York Times article, Shaquille Lampley shares his feelings of happiness combined with a tinge of survivor’s guilt now that he is student debt free. Shaquille is part of the 396 Morehouse Atlanta campus 2019 graduates who received a rare gift of student loan payment from investor and philanthropist Robert F. Smith. Shaquille shares that he had accumulated $200,000 in student debt, and he was utterly at a loss on how he would pay it all back.

There are very few university graduates who get the opportunity to leave their institutions of higher learning debt free. According to a Brookings Institutions report, student loans are the second largest source of liability for households. If you, therefore, have had to crawl your way out of the debt cycle and paid off your student loan through acute discipline and self-denial you are right to hold a “I am debt free” party, or even go on your debt-free holiday.

You deserve it.

Why? You must have fought hard to stay above the statistic that says that over 40 million U.S adults have a student loan debt.

While paying off that debt, you must have thought of other meaningful ways you could have utilized those repayments. Once free of the loan with the help of online services that finds suitable lenders like this one, you now can get back to your life plans with the extra income left over at the month’s end right?

In an ideal world, this would be easy. However, in an instant gratification world where FOMO (Fear Of Missing Out) drives purchasing decisions, the money now left over in your account is in danger of impulse purchases.

Therefore, to direct this money to useful pursuits (top among them being savings), here are a few smart steps you can employ.

How to save money once you pay off your student loan is paid off

Adopt the 80/20 rule
The 80/20 rule is borrowed from the Pareto Principle, which states that 80% of your results will come from 20% of your efforts. To keep the economic discipline momentum going, you need to get into your budget and find items where you no longer need to spend money.

If you pay a closer look at your grocery bill, for instance, it is highly probable that 20% of the items purchased took up 80% of the budgeted money set aside for the said grocery list.

The moneywise say that you should learn to focus on where 80% of your budget goes. Go through those items, and eliminate those that are unnecessary, and then find cheaper substitutes. This process will ensure that you have enough cash left to save for future plans.

Set savings goals and see them through
Once your budget has been whittled down to the basics, now start thinking in terms of percentages. How much do you want to save? A 5% of your savings directed to a rainy-day account can make for a substantial amount in a few years. Send at least 10% of your income toward retirement. With the money left over in your account that was utilized by loan repayments, you can also max out all of your retirement contributions to help you catch up for the years when you could only pay the basic minimums.

To keep to your savings plan, think of your end goals. Is it a house you want, or maybe a holiday? If you have enough, leave a little amount to reward yourself for sticking to your savings plan.

With such plans set, you will avoid impulse spending. NerdWallet advises Millennials to save at least 22% of their income for retirement.

Have a savings account separate from your checking account
Out of sight, out of mind can works wonders, at least as far as mitigating impulse spending goes. The best way to ensure that you can build wealth is to try to make your savings as unreachable as possible for those thoughtless purchases. Some savers advocate a savings account in a bank different from the one that holds your checking account.

This way ensures that pulling back your nest egg into your checking account is much more difficult. In many banks, such a move may take a day or two before the funds clear. This should give you enough time to think your purchases through. It is crucial, however, to leave minimal amounts in your main account to ensure that you have a little at hand for those quick cash emergencies.

Use cash back cards for your shopping
The best cards are those that pay you for spending. An American Express Blue Cash Preferred, for instance, gives back a full 6% for cash spent on grocery shopping. On Amazon, you could enjoy a 5% cashback with the Amazon Rewards Visa card.

Other cards will give back at least 1% to 2% of the amounts spent on purchases. This number might seem like a small amount. However, over time, if well utilized, it can build up into substantial savings.

Budget
While budgeting may conjure in your mind discouraging pictures of absolute boredom, it doesn’t have to be boring as a practice. Sometimes all you need to do is to figure out your budgeting style. For instance, if crunching boring numbers in an excel sheet is boring, you can try the 50/30/20 budget process.

This budget is pretty much simplified, and all you have to is the following:

• Use 50% of your earnings for your living expenses also known as needs
• 30% of your income should focus on the wants, which can include that expensive dead sea salt scrub you have been salivating over
• The last percentage deals with your future, which is where the cash that was once used to pay your student bill can be directed to. The 20% figure is your payment to the future you. You can also use it to pay off.

Pay off your outstanding high-interest debt
It is highly probable that while you were paying off your education loans, you got caught up in the plastic money debt trap. Credit card debt is a significant source of stress for many American adults. Statistics show that the average millennial has a $67,000 high-interest debt tag attached to their name. This kind of debt does not wait for you to get all your ducks in a row.

The longer you hold off paying it back, the more giant its penalties and interest repayments mushroom. If you have a personal loan, payday day or card debt that is raking too much interest, you can employ the “debt avalanche” method of payoff. This method works by first listing of all liability, starting with the most expensive of them all down to the least. Then begin by paying off the high-interest rate debt while paying minimums to lower interest debts. Once that one loan is paid off, work your way to the next credit on your list till you are financially free.

Get your employer to match your retirement savings contributions.
If you are completely debt free, then you have a fantastic chance to build wealth that you can use to retire early or retire like a boss. You need, therefore to verify what your employer contribution match percentage is in your 401(k).

If there is one available, this means free money for you. If for instance you save 6% of your income and send it to your 401(k) and your employer in return adds their 3 %, your outstanding employer has just handed you 50% of your life savings as returns. It is wise, therefore, to max your contributions to ensure that you get the highest match your employer can give.

The final word
Paying off a student is indeed a feat not easily achieved. To keep up that financial discipline keeps the momentum going by applying the above methods to assist you to save more of your money. In the end, you can have the future of your dreams.

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