Student loans and debt: know what you owe - Earnest | Earnest

Your Student Loan: Know What You Owe

By Kaari Peterson | Published on March 30, 2026

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Recently, a family friend (Lauren) who just graduated from college this year requested my input on a job offer she’d received. The job required her to relocate to another city where the cost of living was higher than her current home. Lauren wondered if she should negotiate for more money to ensure that she could cover all of her bills, especially her student loan payments.

I asked her if she knew how much she needed for monthly living expenses and what she needed to cover debt, like her car payment, credit cards, and loans. Lauren told me that she “kind of had an idea” about her monetary needs. I told her before jumping into salary negotiations, she should get a better idea of her fixed costs and how much she’ll need to pay for them.

Create a Budget

There’s no one-size-fits-all approach to budgeting and there are many tools and websites that can help you track your personal finances. Rather than spending time searching for a budgeting tool/app Lauren and I began with the easy route and created a Google Spreadsheet for her budgeting exercise. Later, we looked for a free budgeting app for Lauren to use on her iPhone.

Start with Income

The first item Lauren added to her spreadsheet was her monthly income. She was bartending part-time and her income fluctuated from week to week depending on tips. I suggested that she use a "worst-case scenario" number (the least amount of income she might make in a month). Lauren said that her worst-case scenario would be $100 in tips per week plus her hourly wage.

We multiplied that figure by four and entered it on the spreadsheet next to "Income."

Gather Personal Financial Data Online for Reference

Next, we needed to gather statements from Lauren’s bank, credit card and Venmo accounts. I asked Lauren if she received any of her bills and/or statements by mail and she said, “No.” I then directed her to sign into her credit card provider’s websites. Lauren navigated to the online dashboard and downloaded statements for the previous 3 months. Then she accessed her bank and Venmo accounts online and did the same.

Categorize Expense Items

We reviewed the transactions and entries and categorized them as either fixed or variable. Then Lauren entered the specific line items in a column under the applicable heading(s). For example, all Venmo charges were added to the Variable column.

Lauren’s “Fixed Expenses” included:

Lauren’s “Variable Expenses” included:

Use an Average for Variable Expenses

We could easily get a consistent dollar amount for Lauren’s Fixed expenses by simply adding the numbers in that column. However, we still needed a reliable number for monthly Variable expenses. I asked Lauren to calculate an average variable expense number based on what she’d spent on variable items over the past 3 months. We would use that average as the final variable expense entry on the spreadsheet.

Review List of Expenses Again

We did one more review of Lauren’s spreadsheet entries before calculating the total. I noticed that Lauren’s student loans expense didn’t have a dollar amount next to it. Lauren said it was because she didn’t know what her loan payments were going to be. She told me that it “felt like a long way off” (first payments were due 6 months after her graduation date) so she hadn’t been thinking about it.

I wanted to scream, “What do you mean you don’t know what your payments are going to be?!"

But I didn’t raise my voice. Instead, I calmly told Lauren that we needed to get her payment information from the loan provider’s website. Once we had those numbers we added it to her list of expenses and completed Lauren’s monthly living costs exercise.

Include Savings Goals

After nailing down Lauren’s income and expenses, I asked if she had any savings goals. Was she hoping to buy a car someday? A house? Lauren said that she wanted to be a property owner someday. I told her that we should add a savings line item to her budget spreadsheet. Even if she couldn’t put hundreds of dollars into savings each month, saving even $50 a month was better than nothing. More importantly, building the habit of adding to her savings monthly would be a win.

Creating a Budget: The Final Step

The last step of the budgeting exercise included adding up the numbers under the expenses column as well as the savings column (in this case $100). Then we subtracted that number from Lauren’s monthly income.

Lauren was discouraged when she saw that she wasn’t currently making enough money to cover both her expenses and her savings goal. This was exactly why I encouraged Lauren to do this budgeting exercise with me! Now she had a well-informed place to start when it came to negotiating the salary for her job offer.

Considering the Job Offer

Because Lauren had a job offer, we went back to the spreadsheet and replaced her bartending income with the monthly salary figure (based on the offer.) Then Lauren subtracted her expenses from that amount. She could immediately see that this new job would give her enough income to cover her monthly expenses. Yay! However, it wouldn’t give her any wiggle room — meeting her savings goal would be difficult. If she wanted this new job, she would have to negotiate the amount of the annual salary offered.

Negotiating Salary

I coached Lauren on how to negotiate the annual salary. She could call her prospective employer’s recruiter (from HR) and express her gratitude for the offer. Then Lauren could explain that she’d like to accept the offer however, based on her calculations she needed an additional $3.5K in the annual salary.

[Note: Lauren really only needed an additional $2K to meet her needs. She asked for $3.5K in case the Recruiter counter-offered. Ultimately, Lauren would have a better chance of getting the income she needed by starting her negotiations with a higher salary number.]

The Bottom Line

The budgeting exercise I did with Lauren wasn’t fun. In fact, Lauren said that it was “part of adulting” that she’d “rather avoid.” But after we were done, Lauren felt empowered. She knew that she’d taken big steps in managing her personal finances and she felt optimistic about tracking her money going forward. Lauren even acknowledged that knowing where she stood financially and taking control of her money reduced her anxiety about the future. In addition, this exercise gave Lauren the information she needed to negotiate her job offer intelligently. She knew exactly how much income she needed to live comfortably.

Be Proactive: Start Now

It’s true that knowledge is power. Especially when it comes to personal finances. Don’t wait until your first student loan payment is due to figure out if you can make ends meet. Start budgeting for your future now!

Consider refinancing with Earnest ¹. Our application can quickly locate all your student loans, even across different servicers, and show you how refinancing can simplify and potentially lower your payments². Earnest offers unique features to help you manage your loan with confidence. You can skip one payment³ annually without penalties and choose your ideal monthly payment, customized almost to the penny. If it fits your budget better, you can opt for bi-weekly payments. Before you even apply, you can run payment scenarios to see how different rates, terms, and payments impact your loan. This allows you to select the option that best fits your financial goals. Let Earnest help you build confidence in your financial future by providing the flexibility and control you need over your student loan repayment.

Postscript: Lauren’s Job Offer

I’m pleased to report that Lauren successfully negotiated a $3K increase to her annual salary offer! She started working full-time for her new employer this month.