It’s that unlucky day in the month when you have to make your pesky student loan payments. Shudder. I know that feeling – for a while, I was making student loan payments that were over double my monthly rent at the time. As someone who loves to travel, and takes trips basically every month, these payments prevented me from going where I wanted to. However, with a few small adjustments in mindset and in lifestyle, I was able to work around my student loans and start traveling to new places, hitting a new destination almost every single month. Here I share my top tips on how to travel with student loans.
Determine Your Monthly Budget Without Travel
Do you know right off the bat how much you spend each month? Make a list in Excel of all of the expenses you incur each month, including rent, student loans, gym memberships, groceries, bills, and any other leisure expenses you can’t live without. Then, see where you can trim down your costs. Can you join a cheaper gym? Downgrade your phone service or switch to a cheaper carrier? Go out to eat less? Taking these budget cuts into consideration will help you visualize how much you can realistically save for travel each month.
Next, compare your minimum monthly expenditures to your monthly net income, after taxes. How much money does that leave you? Usually, at this point, I take 75% of that amount and commit to putting that much away toward travel. I usually leave 25% of my disposable income for things like new clothes, unexpected medical expenses, and accidental impulse buys. So, for example, if your income after all of your necessary expenses is $1,000, you’d be able to reasonably save $750 of that. For you, that number may differ greatly, but it’s important to know how much you can save up if you are hoping to travel with student loans.
Consider Refinancing Your Loans
When I started working after college, I immediately looked into options for refinancing my loans. What is refinancing, exactly? Basically, it’s an option to have a new loan company “buy out” your loans at a lower interest rate than you’re currently paying with your provider. I did some research and settled on SoFi as my refinanced loan provider.
With this option, I was able to reduce my monthly payments by over 25%. This alleviated my financial burden substantially each month, at basically no added cost. Be sure to research refinancing programs significantly before choosing one to work with, as you’ll likely be working with them to pay off your loans until the very last payment.
Use Points and Miles to Subsidize Your Trip
I’ve gone on and on before about how points and miles have enabled me to travel substantially, but they’re especially relevant here. If you’re paying off a huge burden in student loans, traveling using points and miles is a great way to see the world while reducing your out-of-pocket expenses.
For example, if you only have $500 to spend on a week-long trip, it’s likely that you’d have to go to a domestic location and stay with friends or family. However, if you can use points and miles to buy your flight, you can go somewhere where you can get by on the remaining ~$70 per day for the week. That opens up a lot more places in the world to you!
Spread Out the Costs
If you’re planning your trip far in advance (as you should be, if you’re trying to work around large loan payments), try to figure out where you can spread out your costs. For example, if you’re planning on traveling in September and it’s currently May, you can spread out your purchases over the next few months. You can purchase your flight in June, book your tours and accommodation in July, and then pay for all the on-the-ground costs of travel in September. Although you’re still paying the same amount for your trip, it’s easier to digest the costs when they’re broken into small expenses, rather than one lump sum.
Student loans can drastically limit the amount of disposable income you have to do other things. I get that. However, it is possible to travel with a budget of just a few hundred dollars if you are realistic about your situation. It’s NEVER a good idea to go into debt for travel (or anything really, barring major life-changing things like an education or a house), so instead take a few months to save what you can and plan your trip based on that amount.
Some trips I’ve been on for less than $1,000 include a trip to Cuba, four days in Slovenia, and weekends in places like Mexico City, Alberta, Canada, and within the continental United States. You can do a lot of damage if you take a few months to save up for your dream trip.
The bottom line is that you can travel with student loans. It might take some time to save up money, and it may require additional planning and research, but it’s worth those minor details to have some amazing life experiences. Hit the ground running, make the necessary changes, and go see the world.