However, to get started you must work out your loan amount and types of loans you have. Next, you should get in touch with the lenders or college financial agents and request a loan drop. If you are in debt over your head, then this is a better solution than the consolidation of your student loans.

But, if that doesn’t work out and you fail to do something about the consolidation of your student loans, then you are at risk of lawsuits, the loss of tax refunds or credits and the possibly of wage garnishes. And, once again, whether or not you can ask for a cancellation of the student loans will be depend on the type of student loans you took out, when and for how much they were issued.

While it is rare, some schools have issued student loans under false pretences. If this is true in your case, then you can demand a cancellation of the loan. Also, if you have suffered from an accident or became ill and the injuries or sickness have disabled you for life, then you can seek a cancellation on the loan too.

Military personnel and members of particular organizations qualify for a cancellation of student loans also. If you are able to get the loan dropped, imagine the money you will have to repair your credit and eliminate other debts too.

And finally, if you have kept up your monthly instalments in good faith until times got hard, you may qualify for a postponement of payments. This is called a deferment request.

The student loan lenders may present you with the “forbearance” option if you request a deferment. The “forbearance” means that the lenders will minimize your student loan repayments temporarily until you are back on top of your debt problem.

As a student, you have numerous ways to manage your debts if you are currently in over your head. Do not assume that there is no solution; instead, spend your time researching the consolidation of student loans options instead of worrying.

If you are interested in the consolidation of student loans, please go to our website, which has lots more information on Student Loans. Also published at Consolidating Student Loans.

Income vs. Monthly Expenses

Create a list of all of your fixed monthly expenses. This includes your rent or mortgage, vehicle insurance, personal loans, utilities, internet, cell phone, cable bill, health insurance, etc. Next, create a list of your ongoing expenses that can vary from month to month such as fuel, heating bill, entertainment activities, groceries, snacks, clothing, pet food, and any other expense. Total all of your monthly expenses.

List all of your sources of income and total the amount. Subtract your total income from your monthly expenses. Now, write down your occasional expenses such as birthday gifts, holiday gifts, vacations, etc. Total your occasional expenses and divide by 12 to get an average expense per month. This will just be an estimate as some occasions are more expensive and others. Subtract that number from the number you got after subtracting your total income from your monthly expenses. Is this a negative number or do you barely come out ahead? If so, you are likely not prepared for a financial crisis in your life such as a loss of job, sudden expensive illness, needing a new vehicle, etc. Fortunately, even if you are not ready for a financial crisis, you can start preparing now.

Budgeting and Cutting Costs

Since you have created a list of all of your expenses, you can look at thelist and figure out where you can reduce your expenses. For instance, there are many ways you can cut down on on-going expenses and occasional expenses. You can learn to be a frugal shopper which will cut down on your shopping and grocery bills. You can also find ways to cut down on how much you pay for gifts. In addition, you can cut down on fuel costs by carpooling, making a lunch at home to take to work instead of eating lunch at a restaurant, reduce your entertainment expenses by finding less expensive and even free entertainment activities, etc. Once you can see exactly where you spend your money each month, it becomes much easier to find ways to reduce your expenses.

Debt Relief

After looking at your monthly expenses, you may find you have accumulated a lot of debt such as credit card bills, personal loans, vehicle lease, etc. If you have a lot of debt and are spending a lot of money on needless interest payments, you may want to consider consulting with a trained credit counsellor to learn about various debt relief programs such as debt consolidation.

During these lean economic times, it is more important than ever for all of us to learn to live within our means. By assessing your current financial situation and implementing a plan to reduce your expenses so you can build a savings account, you will be in a better financial situation if a sudden financial crisis happens in your life.

Consolidated Credit Counselling Services of Canada, Inc. teaches consumers how to budget, get out of debt, and use credit wisely. Offers a variety of unbiased debt management services and alternatives to help people get their debts under control.