If you have just finished college and have a job - congratulations. Still, even with a job, many new graduates are shocked when they find out how difficult it is to cover student loans and other expenses.
Graduating with $30,000 in federal Stafford loans means paying $345 a month if your interest rate is the standard 6.8 percent. That's a big hurdle with a $30,000-a-year job, and it's perhaps downright scary if you are among the graduates still looking for work.
So keep this in mind:
When you leave college, you will have six months to get your feet on the ground before loan payments start. But if you find yourself at the end of that grace period without enough income to pay your loans, don't simply duck and hope no one will notice you aren't paying.
Defaulting, or missing payments, will hurt you. There will be penalties, and there is no exit. Typically, you can't escape your student loans even if you go into bankruptcy.
But it isn't necessary to get into trouble with your student loans.
Under the government's direct student loan program, you are allowed to defer payments if you don't have a job. And if you have a job that pays too little to cover the payments, you can get a temporary break in the form of lower monthly payments.
Under the government's income-based repayment plan, the government will give you payments you can afford. For example, a person earning $30,000 a year could get his or her payments cut to just $50 a month.
That's a temporary fix, of course. As your pay goes up, you will have to make larger payments. And the interest you don't pay while your income is low gets tacked on to the end of your loan. So you end up paying more interest than you would have paid if you hadn't been given the temporary break.
If your pay stays relatively low for years, however, and you pay so little on your loans that you aren't done paying within 25 years, you can finally get free of the debt. The government wipes the slate clean and forgives remaining debt if it lingers for more than 25 years.
Just remember that this help from the government is available only to students who don't put their heads in the sand and start missing payments in the first place. You must be proactive if you can't pay your loans. Contact your student loan provider and ask for relief before the mess begins.
Find information at studentaid.ed.gov.
Meanwhile, if you'd like to get out from under your student loans and you haven't found a job yet, there is another option. If you take a public-service job in fields like military service, nursing or teaching, you can get federal loans forgiven.
Just make sure you understand the type of loans you have and whether your public-service job fits the forgiveness program. You can also find information on forgiveness at studentaid.ed.gov.
If you are interested in making life livable by using income-based repayments, also remember that qualifying is based on your income, not your lifestyle. If your pay is adequate for payments under the federal formula, you won't get a reduction in payments simply because you are paying too much for an apartment or car.
Keep in mind some rules of thumb for lifestyle choices:
If you devote more than 30 percent of your pay to housing, you likely will have trouble paying your bills.
If you devote more than 10 percent of your pay to car payments, you also are likely to struggle.
When you do get the job, save at least 10 percent of your pay from the start. If you have a car, for example, and need new tires, you don't want to whip out a credit card. Rather, you should have emergency savings available for the necessary purchase. Save the money in a bank savings account so it will be available when needed.
Also, while retirement is probably the furthest thing from your mind at this time, amassing enough money for your future requires saving for retirement, starting with your first paycheck.
Gail MarksJarvis is a personal finance columnist for the Chicago Tribune. Readers may send her email at email@example.com