Millennials today face insurmountable student loan debt as well as an ignorance of personal finances or known tools to handle this debt. I am amongst this number as I am in my twenties and I am facing 81k worth of student loan debt. The number alone is scary to witness but it has also put a fire under my soles to educate myself and really come up with a game plan on how I can reduce my debt and eventually create wealth for my future generations and myself. In order to be able to pay off this kind of debt I simply have to be dedicated and disciplined. Unfortunately, there is much information that they don’t teach you in school and sometimes members of your family may not be sources of advice when they too are struggling with debt. I am not an expert but I have created a game plan based on gathered information and tools to reach my personal finance goals. There are so many little bits of information that I was simply unaware of that can go a long way in understanding the full picture of budgeting.

Budgeting

The first step of this journey towards financial freedom is to understand your net worth. Networth is the value of all assets minus the total of all liabilities or simply what is owned minus what is owed. I quickly discovered from calculating this number that I don’t have a networth and my goal is to have my assets surpass my liabilities. Next, I took a full look into my monthly income and expenses and decided an easy smaller attainable goal that I can complete by the end of the year. My goal is to completely pay off 1 of the 3 loans I took out to pay for college. Tools that can help you keep track of your budget; expenses and savings include Mint, YNAB (You Need A Budget), and Mvelopes.

One major tip that has really helped me tremendously in reaching my savings goals has been to simply open bank accounts for particular aspects of my budget. I have a separate checking account for my bills, a separate savings account for my loans, and another savings account for my life that can be a trip, a car, an apartment etc. It is important for me to save to get out of debt but also to save to live. This method has been extremely helpful because the money I see in my main account is strictly the money I am able to spend for the month and I have essentially made it much harder and less visible to access other parts of my money for frivolous reasons.

Comment down below if you have gone through the same thing or used any of these methods!