Knock out your student loans before payments restart in 2021

What Should I do with my Student Loans

When 2020 first started out the furthest thing from anyone’s mind was what should I do with my student loans if a global pandemic hits the world.  Yet as we get ready to close out 2020 that is exactly the question being asked here today.  Student loans previously had been put on pause if you will until the October 2020 payment and now based on new executive orders they have been postponed until 2021. Which leads us to the question.  What should I do with my student loans?

🤔Assess the situation

Instead of jumping in and either paying down your student loans as quickly as possible or stopping all payments to focus on more pressing financial obligations, let’s take a minute and not react without thinking.  Don’t read a headline and go with whatever this “personal finance expert” has to say.

Is attacking my student loan debt the best answer?

It’s really simple to rush to judgement because you have 0% interest and are not required to make payments.  However is that really the right thing to do?  

When I work with my clients we take a look at their overall financial picture.  

We ask tough questions some of which include:

  • Am I overspending on eating out or online shopping?
  • Does it make sense to be investing or saving when I have high interest rate debt?
  • Do I have a good financial action plan that I am following?

These are important questions to ask as my clients and I go through every detail and get a financial snapshot of their current situation.

It’s through these tough questions, answers, and thoughts that we are able to work together and find out what makes the most sense for them.

Right now especially during this uncertain time my preference is to get your financial house in order first.  

Depending on your specific situation this can include building an emergency fund in case of job loss or focusing on high interest rate debt.

If student loans are your only debt it could make sense to take advantage of the 0% interest rate and pay down your student loans quickly.  After assessing the situation, what should I do next?

🎬Create an Action Plan

If you have decided to pay down your student loans it’s of the most importance that you have a plan. 

Reckless abandon isn’t often the best solution nor is making general statements such as “I want to pay off my student loans”.  

[tweetshare tweet=”Without a plan it’s just words, which mean very little without action.” username=”fed9168b6109b9a74622d8c81aae60b1″]

An action plan needs to be specific.  Here are some key questions to include when creating your financial action plan:

  • Where is the money coming from for regular payments & extra principal payments (in this case it’s all principal while student loans are at 0%)?
  • How long will it take to pay off ALL of your student loans?
  • What financial occurrences are you planning for along the way?
  • Am I able to continue this same level of payments until the loan is paid off?

There are so many details that come along with an action plan.  Remember this is just one piece of the plan.  Let’s not forget your every day expenses, income, debt, and all the things that make life worth living.

🏆Create Goals

It’s easy to look at student loan debt and say I want to pay off my student loans.  It’s like saying I want to lose weight or get in shape.  It’s such a general statement that gets pushed to the side and rarely gets the job done.

The Rock Hardest Worker in the Room Even Steven Money

I guarantee he has a plan

For example do you think Dwayne “The Rock” Johnson says he wants to get stronger and walks into the gym to see what happens?  Or do you think it’s more likely he has a detailed action plan and goals to get stronger every day?

Your financial action plan needs goals built around your plan.  I suggest creating a SMART goal.  


For example I want to pay off $2,000 by the end of 2020, which is approximately 4 months or $500 per month assuming a 0% loan.


Dollars and sense are measurable, so is time.  We are all set on this one.


The goal needs to be attainable. If for example you are working part time making $300 per month this goal would not make sense or be attainable.  

Where the attainable part really comes into play is your income and your expenses.  It’s all about the gap between those two.  Reducing your expenses or increasing your income and putting all that “new” money towards debt makes the roller coaster ride that much more exciting.


Relevant is the easy one in your goal setting since paying off debt is relevant to your financial action plan.  If you however had a goal of catching a magical unicorn, we could have relevancy problems.

Financial Independence Day Unicorn

Chasing magical unicorns not relevant to your financial action plan.

Time Sensitive

Time sensitive is something I mentioned above, but I’ll add a little more color.  The goal is not just to pay off $2,000.  No my friend that’s like saying my goal is to get up from bed today, it’s going to happen eventually.  That’s not really time sensitive.  $2,000 paid down in 4 months, now that’s time sensitive. 

Now you have an action plan and a SMART goal and all the details to get it done.  If you are missing any of this, now could be the perfect time to hire a financial coach  and we can figure this all out together.

🏁 Start Today

Ever talk with someone who says they are going to start dieting next week?  It almost never happens.  Why?  Because they are waiting to get started.  

It’s the same way with paying off debt.  If you say you are going to start next month then you are waiting too long. 

Start at the beginning.  Do the easy tasks.  Personally I love keeping things simple and starting with the basics of personal finance.  It’s not sexy but it gets the job done effectively efficiently and effectively.

Build good financial habits like:

The key point is to start today.  Pay attention to your money and start to take a step by step approach to pay off your student loans.

Need help taking the first step?  Schedule a free discovery call using the calendar below.

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