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            Saving for Something Fun? Don’t Let Student Loans Get in the Way

            Key Takeaways

            • Budgeting helps you figure out how much money you have available for saving each month.
            • Come up with a savings plan so you’re not aimlessly putting away a random amount of money every so often.
            • Refinancing your student loans could lower your monthly payments.

            By Stephen Sellner | Citizens Bank Staff

            You’re an adult now. And while some adult things aren’t all sunshine and roses (like paying for health insurance), there’s one perk that’s pretty cool — you’re making real money! Now you can finally afford the big items you’ve always wanted, right?

            One student loan payment later, you might be feeling like your broke college self again. Not to fear; a big-ticket item like that new car, sweet new TV, or designer handbag could still be within reach. You’ll just need to create a plan to make it happen.

            Here’s how to get started.

            1. Create your budget

            Before you start cringing, creating a budget is actually pretty easy. And it’s time well spent if you really want to add that fab handbag to your collection or stunning TV to your living room.

            To create a budget, just follow these steps. First, figure out your net monthly income (what you take home after taxes and other paycheck deductions). Second, add up the total cost of all your mandatory monthly bills, such as rent, cell phone, utilities, Internet, and yes — student loans. Third, estimate how much you spend each month on fluctuating expenses like groceries, gas, and weekend activities.

            After gathering all this information, simply subtract the total of your mandatory monthly bills and fluctuating expenses from your net monthly income. That will tell you how much you can (currently) save each month.

            2. Build your savings plan

            Let’s say, after figuring out your budget, you have $600 left over to save each month.

            Create your savings plan by determining the total amount needed to reach your goal and when you’d like to reach it. Then you can come up with your monthly savings target.

            Let’s say you need $5,000 for the down payment on your dream car and you hope to have it by this time next year. Dividing $5,000 by 12 months will give you a monthly savings target of roughly $417. Saving targets are just that — targets to aim for. But by setting a savings target, you’ll know that if you save at least $417 each month, then you’ll be getting that new car in a year.

            In this example, the $417 savings target is doable with the $600 you have for saving each month. And you’ll still have an extra $183 to distribute toward other savings goals!

            What do you do when your calculations don’t fit your budget? Try to cut costs elsewhere. As long as these sacrifices are worth it to make that dream purchase happen.

            Saving tip: If your saving goal is $417 each month and you get paid bi-weekly, then set up an automatic transfer of $208.50 from each paycheck to go directly to your savings. You could go one step further and set up a goal-specific savings account — in this instance, for the down payment on a new car — and send all automatic transfers there. That way you can clearly see how much you’ve saved to date and how far you have left to go.

            3. Look into refinancing student loans

            Need a less obvious way to create more room in your budget? Refinance your student loans. It could lower your monthly payment through a lower interest rate or longer repayment period. That would mean less money going to bills each month and more money toward something special.

            What to remember

            Repaying your student loans doesn’t have to sabotage your financial goals. You’ll just have to be smart about how you save to stretch your money. Saving without a plan is less work, but just a little planning could pay off in a big way.

            More information

            To learn more about the Citizens Bank Education Refinance Loan® and the benefits of refinancing, call 1-877-405-2262 to speak with one of our Student Lending Specialists.

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