I can’t afford my student loan payments. Should I send what I can or wait until I’m in a better financial position?

Dear Dave,

I can’t afford my student loan payments. Is the best approach to send them what I can afford, even if it’s not the minimum payment, or not send anything at all until I’m in a better financial position?

Sydney

Dear Sydney,

Here’s the deal. Those guys aren’t going to stop calling and bugging you, no matter which of those options you choose. But then, you probably already know that. The benefit, however, of sending them $20 or $25—if the minimum payment is $50—is you’re forcing yourself to start thinking in terms of planning and living on a budget. My advice? Do everything you can to honor your commitments. That’s the moral, legal and spiritual thing to do in these kinds of situations.

You know, lots of times when people say they can’t afford something, what they’re really saying is they don’t want to give up fun stuff in order to honor their obligations. If that’s the case, I’m not the guy you need to be talking to or want on your team. You accepted the responsibilities that came with borrowing money. That means if you don’t get to eat in restaurants, go on vacation or buy cool new gadgets until you repay the debt, that’s how it is.

However, if you’re already living on a crazy-tight, rice and beans budget, and $20 is literally all you can squeeze out, then give them $20 a month. That way, at the very least, you’re trying to honor your obligation. And you can tell them with a clean conscience it really is all you can afford.

But there’s a bright spot in all this. If you’re already scrimping and saving and paying all the money you have—first toward running your household, then secondly to your creditors—you’ll find an amazing thing starts to happen. Your dollars start to stretch a little bit further. This will help you clean up your student loan mess and enable you to have a little better life in the process.

Good luck, Sydney. You can do this!

— Dave

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