Study shows financial regret is real—and this mistake can take an average 18.5 years to recover from

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Most Americans are living with some kind of financial regret, according to a 2019 study from New York Life, which polled 2,200 adults about their financial mistakes.

Participants ranked "not saving enough for retirement" as their No. 1 financial regret in general, but "taking out too many student loans" is the top money mistake that took the longest to recover from.

The average participant reported paying off student loans for 18.5 years, starting at age 26 and ending at 45.

Spending a significant portion of your life repaying on college tuition fees is a reality many Americans. In 2018, 69% of college students took out loans and graduated with an average of $29,800 in student loan debt, according to statistics from Student Loan Hero. The typical repayment period for borrowers carrying between $20,000 and $40,000 in federal student loans is 20 years, reports the Department of Education.

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Smart strategies for recovering from student loans

Since everyone's student loan debt situation is different, there isn't a one-size-fits-all way to speed your way out of debt. But there are some strategies that will make you smarter (and hopefully more efficient) at eliminating your college dues for good.

1. Get to know your debt

The first step is to get a grip on your debt. Start by calling your student loan lenders to find out how much you owe and your interest rates. If you are unsure of how many loans you have, you can check out the National Student Loan Data System for details regarding your federal loans. And for private loans, you can check your credit report to identify any outstanding debt.

Once you've rounded up your loans, keep the information organized by creating a spreadsheet with separate columns that indicate the name of the lender, the amount you owe, the respective interest rates and due dates for each loan.

As you pay, you can update the spreadsheet so you can visually see the total getting smaller. This "will give you a mental win to keep moving forward and paying off your debt," Ryan Marshall, a New Jersey-based certified financial planner, tells CNBC Make It.

2. Determine your payment strategy

Once you have all of these key details written down, it's time to think of a repayment strategy that will motivate you.

First, you need to be paying the minimum for each loan every month. Once you've got autopayments set up for each loan, you can make a plan to devote extra money to the loans if you want to pay off your debt quicker.

There are two popular methods recommended by financial experts to pay off your debt. The first is the "snowball method." Using this technique, you identify your smallest loan and pay it off first. "It may seem counterintuitive, but this technique helps build confidence," Marshall says. "After that loan is paid off, you can use the payments that were previously allocated to the smaller loan toward paying off the larger loans."

Others prefer the "avalanche method," where you focus on paying off the loan with the highest interest rate first. This strategy is mathematically designed for speed, and you'll ultimately pay less in interest.

Your payment cadence can also help speed up the process. If you can afford to make bi-weekly loan payments, rather than monthly ones, it will decrease your overall repayment time and the amount of interest owed.

Kevin O'Leary: Here's what you should do with student loans
Kevin O'Leary: Here's what you should do with student loans

3. Consider your options

Should you refinance or consolidate your loans? While both options work to bundle multiple loans into one, they function differently and have their own pros and cons.

Refinancing your student loans is sometimes a good idea if you want to lower your interest rate, monthly payments or the length (aka the term) of the loan, explains Douglas A. Boneparth, a New York-based certified financial planner and president of Bone Fide Wealth.

You must apply to refinance your loans much the same way that you apply for a new credit card. Each lender typically has their own criteria for evaluating who they will refinance, and they look at factors such as credit score and income.

There are potential downsides to refinancing. For one, some student loan refinancing companies will make exaggerated claims about the amount of debt they can save you. And by refinancing, you may also lose out on certain benefits, such as alternative payment options like income-based repayment plans that are offered with federal loans, Boneparth explains.

Consolidating your student loans is another repayment option that involves combining multiple loans into one. These loans have a fixed interest rate that's calculated when you take the weighted average of the interest rates on all of the loans you're merging and round it up to the nearest eighth of a percent.

While it may be convenient to consolidate and have all of your loans in one place, Marshall says you should proceed with caution when considering this repayment route since "it may not always be in your best interest," he says.

Consolidating your debt can sometimes result in short-term relief thanks to lower monthly payments, but in the long term, you could end up paying more in interest, according to Experian.

No matter what, whether refinancing or consolidating your loans, "always know the numbers and make sure you ask for the hidden costs," Marshall says.

4. Be prepared to sacrifice

The reality is, if you have a laundry list of student loans to pay back, an effective repayment process is going to take sacrifice and motivation.

"One trick is to select three items that you are going to sacrifice for the year and use the money you would have spent to pay down loans," Marshall says.

These sacrifices could be anything from moving back in with your parents, getting a roommate to cut down on living costs, packing your lunch, getting a side hustle or selling old items of value, explains Marshall.

"Moving back home could save you thousands a month," Marshall says. "And while it may seem like a small change, packing your lunch every day could save you $15 per day or $3,600 per year."

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