Millenials emerging into society today are unlucky enough to be apart of an economy full of debt. More than ever those lucky enough to graduate from college have more debt than they will be able to pay off with mounting interest.

For those who do not go to college and those who do, life is still more expensive than ever before. The result of this expensive economy has left most Millennials with mounting debt, just to get by.

There are things they can do to help get themselves out of debt and finally on the path to financial freedom

Save a small amount from each paycheck, to build a savings account:

Even when things are tight, setting a budget to save even a small amount per paycheck will build over time. Having a savings account will allow for unexpected costs that come up in life. Keeping a safety net like this will stop you from having to put unexpected costs on credit. Anything you can do to stop you from spending on credit cards, and not being able to pay them off, will help with stopping the pattern of mounting debt.  Saving this money can also help with paying off current debt and help you get your head above water.

Balance Transfer:

If you already have debt and it is in good standing, you may be getting offers in the mail for balance transfers to other credit lines. This is a good option for those who have lines of credit with revolving balances and high interest rate credit cards. If you do a balance transfer you can consolidate all your monthly payments into one for a low fee, and for a promotional amount of time you can often get a 0% interest rate, or a very low rate compared to what you are currently paying. The catch with this is that you have to pay off the amount before the promotion is up, or it will change back to a high interest rate. The good news with this is that if you can’t pay off the line of credit before the rate period expires, you can often transfer it again, to a new line of credit for a new promotional rate and time period.

Payment Negotiation For Federal Loans or Deferment:

For many college graduates, student loan payments can be suffocating. It is important to know that there is help when it comes to federal loans. You can call to negotiate the amount you need to pay each month, based on your current income. If you can prove that you don’t make enough to cover the cost of the payment, they will often negotiate the payment amount with you, to something you can afford. The other option for federal student loans is to apply for deferment. If you can prove financial hardship and show that you cannot currently make payments, they will often agree to defer your payments for an agreed amount of time. The downside to this is that the interest will continue to accrue during the deferment period just like it did when you were a student.

Pay Ahead on Student Loan Interest Rate:

Hispanic girl holding â’college’ savings jar

It is important to think about what will happen with your student loans after you have graduated. Many students take out exorbitant loans while they are students, and don’t think about how they will make the payments with the high interest loans when they graduate. If you plan ahead while you are still a student, and pay the interest while as it accrues, you will have much lower payments when you graduate. The total to that point will only be the principal amount, since the interest is paid off. This often makes a big difference in the long run for recent graduates.

Debt Consolidation:

Many Millennials today have debt that they are making the minimum payments on, and it is just not making a dent in the debt amount they have. One option is to take out a debt consolidation loan. This is will make it so you only have one payment each month, and it will often have a lower interest rate than what you are paying on your current debt.  It will also help your credit score to pay off all or most of your current debt with the loan and keep it all in good standing.

Debt Negotiation:

This last option is for those who have fallen behind in their payments and now have debt in collections. There is no need to file for bankruptcy no matter how much debt you have in collections. The best way to stop the collection calls and fix your credit, is to negotiate the debt amount and set up a new payment schedule with lower payments. Once debt goes into collections, it is often purchased by third party debt agencies. This allows for the debt amount to be negotiated to pennies on the dollar. If you don’t feel comfortable negotiating your own debt, there are companies who will call and negotiate for you. Please be aware that this option is only for those with debt that is already in collections. Do not let any debt negotiation company tell you to stop paying your bills. This will hurt your credit. Make sure to only use this option if you already have debt in collections. Settling will help your credit in that case.

Millennials today do not have it easy when it comes to entering the economy, getting a job and building an independent life for themselves. They often find they are in debt and not flourishing the way they thought they would when they went out on their own. It is important to remember, that even in the current economy there are ways to help yourself reach financial freedom and get out of debt.