Winter is finally over, the weather is warm, and you’re getting amped up for summer.
One thing could make this season even better: getting rid of your student loans.
Instead of overspending this summer, try these five budget hacks to save money. Then, use your extra cash to crush your student loan debt ahead of schedule.
1. Create a summer budget
Have you checked your budget lately? Summer is the perfect time for a budget revamp since your expenses probably will be different from those in the winter.
“Make sure you are clear about how much you want to spend this summer and that it doesn’t interfere with your financial responsibilities,” said Natasha Rachel Smith, a personal finance expert at TopCashBack.com. “The best way to achieve this is by planning out each summer month in advance by budgeting.”
You don’t have to cut out fun summer events, but you can prepare for them with a “summer activity budget.”
“Set money aside to cover any must-go events while also giving yourself room for some spontaneous spending,” said Smith. “Make sure to set a limit on how much you spend every week or month on these summer fun activities and stick to it!”
Expense-tracking apps such as Mint or You Need a Budget could help you monitor your spending. You also can add a category for debt payoff in your budget.
Once you’ve taken care of other priorities — such as building your emergency fund or contributing to a 401(k) — you can put any leftover money each month toward your student loans.
2. Design your personalized debt payoff plan
If you have federal student loans, you automatically get put on a 10-year repayment plan. Most private lenders also offer a 10-year term on student loans, along with other repayment options.
But you don’t have to stay on the 10-year term. Making extra payments will get you out of debt faster and save you money on interest.
For instance, let’s say you have a $15,000 loan at a 6.00% interest rate. Over 10 years, you’d pay about $167 per month and $4,984 in interest.
However, you could shave a year off your term by ramping up your monthly payment to $180. Or you could get out of debt four years and five months faster and save $2,310 on total interest charges by making an extra payment of $100 every month.
If you have a strong credit score or a qualifying cosigner, you might consider student loan refinancing. Refinancing restructures your debt, plus you could get a lower interest rate.
However, make sure you understand all the pros and cons of refinancing before you apply.
3. Save money with free (or cheap) summer activities
From music festivals to travel to outdoor dining, it’s way too easy to overspend during the summer.
That’s why Jacob Dayan, the CEO and co-founder of Community Tax, recommended finding cheap alternatives to pricey activities such as dining out.
“If you’re looking to save money this summer to put towards paying off your student loans, limit the number of times you go out to eat to once per week,” said Dayan. “If this is a major hit to your social life, try hosting a potluck at your place and have each friend bring a dish.”
He also suggested cutting some monthly costs, such as your gym membership.
“With the great weather that comes along with the summer months, take advantage of the sunshine and longer days by taking your workouts outdoors,” Dayan said. “Not only will this allow you to save money, but it will help you get outside, which is great for your mental health as well.”
Eric Anthony, the managing editor at Houston On The Cheap, has another tip for summer savings.
“[Look] for inexpensive forms of entertainment, which are abundant in the summer months,” said Anthony. “For example, most towns will run summer concert series that provide free admission. This can be a great way to engage in the arts and hang out with friends without hurting your budget.”
Search online for a calendar of fun local activities that are easy on your budget.
4. Make more money with a side hustle
Budgeting and saving can only take you so far. Another way to pay off your student loans fast is to increase your income.
“The fastest way to get out of student loan debt is attacking it with everything you have,” said Kelan Kline, who co-founded The Savvy Couple blog with his wife, Brittany. “Sometimes that means getting a side hustle or second job going.”
Some ideas for making extra money include:
Renting out a room or hosting an experience on Airbnb
Working as a freelance writer or editor
Doing small jobs in your neighborhood through sites such as TaskRabbit
Offering consulting services online
Selling used clothes (or other items) online
The possibilities are endless, so think about what you would enjoy doing.
“Whether it’s starting a blog, taking online surveys, or selling old items on eBay, every little bit counts,” said Kline.
By finding a way to make more money this summer, you could conquer your student debt.
5. Avoid overspending on travel
According to a survey by Allianz Global Assistance, Americans were planning to spend $101.1 billion on summer vacations in 2017. Generation X respondents were planning to spend an average of $2,628 per person, while millennials were likely to spend an estimated $1,373.
Travel expenses can add up, so make sure you’re not blowing past your budget to take a trip.
Look for ways to save on travel, such as comparing flight prices across different sites and opting for a carry-on instead of a checked bag.
You also might want to choose affordable accommodation, such as an Airbnb spot or a hostel, as well as cook your own food sometimes instead of going out to eat every meal.
Finally, make the most of rewards points if you have a travel credit card. Of course, you don’t want to go into credit card debt while chasing those points. But as long as you’re in control of your spending, travel rewards credit cards can be a useful way to lower travel costs.
You also might be able to redeem those points for cash, which can then be put directly toward your student loan balance.
Student loans don’t have to get in the way of travel, but you might want to plan cheap trips until you’ve got a handle on your debt.
Make your student loans melt away this summer
Although summer is a time to relax and have fun, that doesn’t mean you should take your eye off the debt payoff prize.
Take steps to avoid overspending, and find ways to increase your income. Then, use the money you make or save to pay off your student loans as fast as possible.
In the end, you’ll be able to enjoy yourself more knowing you’re making progress on your student debt.
After all, the only thing that should be hanging over your head this summer is a beach umbrella.
Interested in refinancing student loans?
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