Repaying student loans is usually one of the biggest financial goals that recent graduates have. Student debt can seem like a millstone around the necks of student debt borrowers, and many people view repaying such loans as their primary financial aspiration after they graduate from school. However, after student loans are paid off, individuals may work toward other financial aspirations, and the biggest goals after repaying student debt fall into a few categories.
Buy a Home
One of the biggest goals after repaying student debt is to buy a home. Indeed, this was my biggest financial aspiration after repaying student debt, and I was able to purchase a home around 20 months after I repaid my student debt. Home ownership is a great way to amass wealth, obtain lucrative tax benefits, and build a strong financial foundation.
The most important thing to keep in mind when purchasing a home is to save enough money for a deposit and closing costs. In most circumstances, people should save at least twenty percent of the cost of a home to put as a down payment so that they can avoid paying mortgage insurance. In addition, closing costs can be a five figure sum, and individuals need to be prepared to furnish this amount of money.
Student debt borrowers should be well-positioned to purchase a home. By applying the same saving tactics and side-hustles that assisted in repaying student debt, individuals should be able to acquire the money needed to purchase a home. Indeed, it only took me a little over a year to save and earn the money I needed to purchase a home. Of course, purchasing a home is not ideal in certain circumstances, and the housing market differs in various parts of the country. Nevertheless, buying a home is definitely one of the biggest goals after repaying student debt.
Repay Other Debt
If you have other debt, repaying this debt may be one of the biggest goals after repaying student debt. Student loans may have high interest rates. Indeed, I had tens of thousands of dollars of student loans that had interest rates close to eight percent, although the average of all of the interest rates on my debt was much lower than this.
People may have debt that they pay off less fast than student loans since the interest rates are lower and there is not as much of a penalty for carrying this debt. For instance, car loans generally have interest rates that are far below the rate for student debt, likely because the amount borrowed is less and there is collateral to back the debt. In addition, some personal loans and other kinds of debt may have an interest rate lower than student loans. After student debt is vanquished, eliminating some of this other debt may be one of the biggest goals after repaying student debt.
Save for a Family
Another one of the biggest goals after repaying student debt is to save money to have a family. Some might not believe that individuals need to have some forethought about having children. However, now that I have nieces and nephews of my own, and numerous friends who have children, I understand how children are extremely expensive. Indeed, diapers, food, medical expenses, and other costs can substantially add to a household budget, and individuals need to think about how they are going to deal with this cost.
It may sound odd, but some people may be unwilling to have children because they do not believe they are financially capable of this due to their student debt. After repaying student loans, many people may wish to build their savings so that they can deal with the added expenses of expanding their family. With the right financial planning, people can rest assured that they can balance their financial aspirations with their familial goals.
A long-term one of the biggest goals after repaying student debt is to save money in retirement accounts. It might be difficult for student debt borrowers to save money for retirement. Once student loan payments are made, and living expenses are paid, very little might be left over. to save for retirement. Indeed, I did not save anything toward my retirement until late in my student debt repayment saga since I wanted to focus my efforts on repaying student debt.
However, individuals should definitely consider making payments toward retirement accounts if their employers will match contributions. In addition, once student loans are repaid, individuals should begin saving money for retirement if they have not already done so. The earlier you start saving for retirement, the more interest will be earned on your savings and the easier it will be to retire. Individuals do not want to end up in a difficult financial situation during their golden years, and for this reason, retirement saving should be a big part of financial planning for individuals who have repaid student loans.
All told, it might be difficult for many student debt borrowers to imagine a time without student loans, but this goal is achievable to many. Once you are free from student loans, some of the biggest goals after repaying student debt might include setting yourself up financially in the present and ensuring that you have enough retirement savings to enjoy your golden years.