Spend money guilt-free, even with student loans

Earlier this year, total outstanding student loan debt surpassed $1.5 trillion.

For those with loans they can’t afford, the news was a large-scale confirmation of a small-scale truth: Student loans have gotten out of control, and they leave a smoking crater in the place where a thoughtful budget should be. Seemingly endless and urgent new priorities compete for your attention and limited income after graduation: housing, an emergency fund, paying off those loans.

Here’s one more you shouldn’t ignore: yourself.

“If you’ve got a financial plan that includes no money for fun, it’s unrealistic. It’s not going to happen,” says Matthew Angel, advice director of personal finance at USAA, a financial institution for members of the military and their families.

Managing your money well is about creating balance, which you’ll have to do over and over as the shape of life changes: You may change jobs, get married, have kids or go back to school. Learn how to keep your big expenses low, get serious about setting aside “fun” money and pick activities that will bring you lasting joy, and you’ll be able to repeat the process when new priorities edge their way in.

When you lead a life that’s more than the sum of your financial stresses, you might even feel motivated to pay off your student loans faster.

Compartmentalize your cash

Budgeting meticulously isn’t for everyone. But no matter your personality, you should have a general idea of where your money goes. Start with this method: • Add up monthly fixed expenses, like your rent, transportation, utility bills, student loan payment and average grocery bill.

• Decide how much to save per month to build a solid emergency fund, which will eventually include at least three months of expenses (it’s OK if it takes time to get there).

• Use a retirement calculator to see how much you should save per month now to get a head start on retirement, even if it’s just a little.