How a person sees money in their 20s is different from how a person views money in their 40s and 50s. According to experts, people should not obsess about money but rather utility. What kind of satisfaction would they have if they made a certain purchase or decision? Economists say it’s important to boost the utility you get from the money made over the course of one’s lifetime.
U.S. students are given an array of plans to help them repay their loans, which vary on time and are income dependent. Young people are typically told to pick a plan that allows them to pay the loan off as quickly as possible, as unpaid balances lead to real interest.
This is not as sound advice anymore.
When you choose the amount to repay on your loans each month, you need to consider the utility and the amount you want to owe in 10 years. For some people, repaying very little on student loans is the better way to go. It’s more important to focus on the amount of money one is likely to make in the future and the lifestyle they want.
If you expect a higher salary, future payments are not as burdensome. When it comes to lifestyle, this depends on your goals – present and future. If a present cash-strapped isn’t sounding too bad to you, then money for your future is more valuable than money for today.
Student loan payments boil down to your priorities. When you choose your repayment strategy, think about what your goals and priorities and decide based on them. Don’t think you need to pay off your student loans quickly, as you could hinder yourself more than help it.