How to Adjust Your Budget for Student Loan Payments

Cut Discretionary Spending

Possibly the easiest way to make room for student loan payments is to pare back on lifestyle-related expenses. There's no need to go full spartan and eat only rice and beans. But, depending on what your student loan payment looks like, cutting back a little here and there can make a huge difference.

Start by taking a look at your expenses over the past few months to get a good idea of where your money is going. Then, pinpoint categories where you can reduce your spending without disrupting your lifestyle too much.

Some examples include:

• Eating out once or twice less per month
• Inviting friends over for drinks instead of meeting at a bar
• Spending less on movie tickets, concerts and other live events
• Sharing streaming services with a friend or family member instead of paying the full subscription on your own
• Opting for generic-brand items at the grocery store
• Getting books and audiobooks for free from your local library instead of buying them

You can also look at your spending on clothing, electronics and other items to ensure you're not spending more than you need.

If you enjoy a daily latte from the local coffee shop, it could make sense to buy an inexpensive espresso machine and make your coffee at home. Even with the upfront cost, you could end up saving a lot over time.

Find a Cheaper Place to Live

Housing is likely your biggest monthly expense, and depending on your situation, you may or may not have much flexibility with what you pay in rent or a mortgage payment.

If possible, though, consider potential ways to cut your housing costs. One option would be to downsize and live in a less expensive apartment or home. You may also consider moving back home for a short period while you get your budget into a better place—though it is understandable if family dynamics make that option difficult or impossible.

An alternative to moving is to find a roommate or, if you own a home, rent out a portion of your space to a tenant. While those won't reduce your monthly rent or mortgage payment, they can provide some income to offset that cost and cover your monthly student loan payment and more.

Reduce Your Monthly Bills

While discretionary spending is often the scapegoat of a tight budget, it's also worth it to look at your fixed expenses to see if you're paying too much.

For example, car insurance companies often offer discounts to new customers. Depending on how long it's been since you bought your current policy, it may make sense to compare auto insurance rates to see if you can get a lower premium.

You can also reduce your utility bill by adjusting your thermostat or cut your phone bill by getting on a family plan, changing your phone plan or switching to a different carrier.

If you're feeling overwhelmed, Experian BillFixer™, part of the Experian CreditWorks^SM Premium membership, is a service that can negotiate your bills on your behalf. While not all bills are eligible and savings aren't guaranteed, BillFixer could save users a significant amount of money annually.

Adjust Your Career Trajectory

If cutting back on your expenses isn't enough, you can also look for ways to earn more money. A side hustle can provide a temporary boost in income, but depending on your situation, it may not be sustainable.

So, in addition to looking for income outside of your current job, consider ways you can increase your earnings in your career. For example, if it's been a while since you've gotten a pay bump and you're a top performer at work, think about starting a conversation with your boss about getting a raise.

You can also look into other job opportunities with your current employer or a different one to see if you can land a position that pays more. If your opportunities for a raise or upward mobility in your career are limited, consider whether you can improve them by improving your job skills through an on-the-job training program, a certificate program or other additional education.

Look Into Income-Driven Repayment

The advice to earn more and spend less is well-meaning, and depending on your situation, it might be enough. But it may not be feasible for student loan borrowers who experience limitations that others may not have to deal with.

If no amount of scrimping, saving and hustling is enough to move the needle for your budget, learn about the Department of Education's income-driven repayment plans.

The four plans, which are available to most student loan borrowers, can reduce your monthly payment to anywhere from 5% to 20% of your discretionary income. They also provide forgiveness after a certain amount of time, which can range from 10 to 25 years, depending on the plan you choose.

Learn about each income-driven repayment plan and consider contacting your student loan servicer for additional information and advice for your particular situation. Once you pick a plan, you can apply online in 10 minutes or less. You'll typically need to provide some basic information about yourself, your spouse (if applicable) and your financial situation.

Improving Your Credit Can Provide Additional Savings

While it might not create instant savings, improving your credit scores can help improve your cash flow over time. That's because the other loans you get, including credit cards, auto loans, personal loans and a mortgage, all determine interest rates based on your credit profile.

As you work to build and maintain a good credit history, you'll improve your odds of securing lower interest rates and minimizing your monthly payments.

With Experian's free credit monitoring service, you'll get access to your Experian credit report and FICO^® Score^☉ , giving you the information you need to evaluate your credit situation and pinpoint areas you can improve. You can also track your progress over time and get real-time alerts when changes are made to your report.