Every year, more than 30% of people go through the process of taking out a loan for one reason or another. Some do it to pay for college, while others do it to pay off a past-due utility bill.
If you’re thinking about taking out a loan at the moment, you should know what you’re getting yourself into before you do it. Loans can be very useful when you’re responsible with them. But they can also turn into a huge headache if you don’t know what you’re doing when you take one out.
As valuable as education is, it’s awfully expensive. Most students these days look to outside help for finances to help them get through school and land their dream job with the help of a degree or certificate. Unfortunately, getting to that dream can often cost us thousands of dollars in student loan debt. The good thing? Getting over that hump of paying back our student loans is not nearly as insurmountable as it sounds. Check out these helpful ways that will lead you down the path to financial freedom and out of debt.
Live Modestly
It can be hard to live within our means sometimes. We want to go out and socialize, have a few drinks, catch a movie with our pals. The unfortunate truth is that these little expenditures add up in a big way. It’s okay to go out and live your life, or buy some snack food every once in a while, but remember to stay within your means. Whether you’re about to graduate and begin paying back your student loans or you’re already done your education and are in the process of paying them back, spend as little as possible, when possible.
Figure Out Your Options
Repaying your student loan debts doesn’t have to be done all by yourself. Asking for help or reaching out for support isn’t something to be ashamed of either. It’ll alleviate some of the stress in your life to research how you can pay your loans. Consider all your options; savings accounts, Elfi, loan assistance services, borrow from family, work a secondary job. These are among the many ways you can help chip away at those pesky loans and allow you to feel mentally and financially free, ready to take on the world with your career. There are always options to help you out, don’t be afraid to exercise them!
Pay More Than the Minimum
This tip feels really straight forward but it’s worth mentioning because it is often overlooked. Paying more than the minimum payments for your loans can mean the difference in months of how long it takes to fully pay off your debt. It doesn’t mean you have to pay a massively increased amount each month, but simply paying a percentage of the minimum added on, will reduce the overall time. Another good trick is to split the payments in half for each month so the money you spend doesn’t take chunks out of your rent, groceries, or other necessary bills.
Conclusion
Repaying student loans is an unfortunate reality for many students and graduates. Although it can feel defeating to get your education and know you have to take chunks out of your paycheck each week, the goal of financial freedom is one that requires some sacrifices at times. Keeping these tips and tricks handy is a good way to set yourself up for success in paying off your student loans and is also a great way to develop responsible spending and saving habits when it comes to your money in general.
Incidentally, if you are interested in learning about some radical solutions to the student loan debt problem, the Saving Advice Forums has an excellent discussion about a 5,000 year old proposal for paying off student loan debt. Basically the idea is to cancel all Federally held student loan debt in the country to improve economic growth.
For more great articles on The Free Financial Advisor, consider reading our pieces on:
How Long Should You Keep Financial Records After A Death
What Are Some Of The Advantages And Disadvantages Of Keeping Money In The Bank
Financial Planning Basics – The Finance Pyramid
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What do Khloe Kardashian and Nick Carter have in common?
Both Khloe, and the youngest member of the Backstreet Boys, Nick Carter, have DUI arrests on their record. While it may be easy for celebrities to recover from a DUI, the majority of Americans find themselves struggling to survive financially.
Have you recently had your driver’s license revoked or suspended and you’re wondering how to go about getting it back?
One of the steps to getting your driving privileges reinstated is to obtain what’s known as an SR-22. This is required to show that you’re being backed up by a legitimate insurance company while on the road despite your past traffic offenses.
Can you remember the first day you worked and earned money? It might have been babysitting for your neighbor’s kids or a retail job at the local mall. As a kid, you might have imagined your parents going to work as something that just happened. You didn’t think of the financial ramifications or why going to work was important.
The older you got, the more likely you were to start seeing the value of money. Want to go to the movie with your friends? Want to purchase a new video game? All those things cost money.
So, you got a job and chances are, you weren’t the best saver. Money was for activities and fun.
But now that you’re entering the real workforce, there are lots of other things your money is going to such as rent, groceries, utilities, and retirement.
Retirement? But you just started working!
Even though you might be 40+ years from retiring, it’s never too early to start thinking about the day when you hang it up. Below, we have some tips and questions you should be asking yourself and those around you when it comes to your retirement.
While a pension was the norm for your grandparents and maybe even your parents, roughly just 54% of businesses these days offer pension plans for their employees. While that may seem like a solid number, the financial crisis of 2009 put a real dent in those numbers and they have been slow to recover.
While your work may not offer a pension, they may offer other benefits like a 401(k) or a 401(a). 401(a) plans are typically offered by government or nonprofit institutions and participation in these plans is often mandatory. Contributions are determined by the employer and can be either pre or post-tax.
401(k) plans are the opposite. They are more popular in the private sector, don’t have a contribution limit, and participation is not mandatory (although it might be).
Contribution is pretty simple, that you take X amount of money out of your paycheck and put it towards these plans each month. Money accrues and grows over time.
Let’s say you need the money, can you take it? Of course, it’s your money but it comes at a cost. The IRS will take a 20% as a penalty for early withdrawal. There are certain stipulations to withdraw money without the penalty, but they are never guaranteed.
Hopefully, you aren’t living paycheck to paycheck and you’re putting away a certain amount of money each month. That could be saved for an emergency or saving up to make a big purchase.
It’s important to set up a personal savings plan because that money could be put into an individual retirement account (more on that later).
Budgeting is boring but highly necessary. Whatever you’re putting away each month should be treated like your 401(a) or 401(k). It should be untouchable. Make sure to take a certain percentage of your savings and plan to put that towards your retirement.
You might have seen this written as IRA and they are pretty common. The idea is that you yourself put money into a non-Roth or Roth IRA each year (up to $5,500 maximum) and that money is invested.
Many people seek out the advice of financial planners to help them plan a strategy for their IRA. The biggest difference between the two lies within the taxes.
Traditional IRAs mean your contributions are taxed in the year they are made. With a Roth IRA, you’re not going to be taxed when you start making withdrawals.
It’s important to note that not everyone is eligible to contribute to a Roth IRA and access can be restricted if you are using a 401(k).
The best thing to do is to meet with a financial planner and discuss your options. Ask your parents or others who might have a contact they can set you up with. They can help you do much more than just manage your retirement, but help manage your entire portfolio as well and give tips on sound money management policies.
Even though it may seem silly, it’s never too early to start thinking about your retirement.
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Student loan debt is becoming a common financial crisis in the United States. A majority of students are graduating with huge amounts of debt and feeling crushed by the financial burden. More and more graduates are searching for ways to pay off student loans quickly so they can experience financial freedom before making other financial investments.
It’s unfair that an entire generation of young Americans have to wait even longer than older generations to purchase a home or start saving for retirement simply because they wanted to get an education. Therefore, if you have student loan debt it’s a good idea to employ every strategy that you can to pay it off quickly.
This article will go over a few general tips and strategies for how you could quickly pay down your student loan balances, so you can become financially independent once more!
When making your monthly budget, whether you are single and just out of school or budgeting for a family, always take your student debt into account. Budget in your student loan debt, credit card debt, title loan debt, mortgage, and any other debt you may have. Make sure you include your debts into your budgets as they should always be the main priority. Try to allocate more money toward your debt than what is required.
If you are going to make extra payments on your student loans over the minimum, then put that extra cash towards higher interest loans. The interest rates are constantly growing your debt load and paying off those loans with the highest rates first will save you money in the long run. And when paying more than your minimum, tell your servicer to apply that overage to your current balance and not simply to next month’s payment.
When trying to decide whether refinancing is a good idea or not, it is not a clear black and white determination. It completely depends upon the situation; whether your loans are federal or private, whether you have good credit and a good job, whether your loans are subsidized or unsubsidized. Research your options, calculate how you might save or lose money, and make the decision that is best for you.
Make sure that you never miss a payment or get charged a late fee by signing up for autopay. Enrolling in autopay can even get you a minor interest rate discount with federal servicers. Along with the discount, you will be able to set up multiple payments and ensure you pay your loans as a priority.
Instead of just paying once a month, you can trick yourself into paying way more and cutting down your repayment schedule drastically by simply making two payments a month instead. This doesn’t even mean you have to pay double a month, but just twice. That will still make a difference.
Persistence and hard work will take care of your student loan debt once and for all. Just stick with it and follow these suggestions and before you know it, you’ll see that the diligence was so worth it.
For more reading, consider checking out this article from Nerdwallet on how to pay off your student loans fast.
Image source: Pexels.com
This year, Americans will spend more on taxes than on housing, clothes, and food COMBINED.
In fact, on average, every dollar Americans earn until April 15 will end up going to taxes.
You’re well underway in the house-hunting process and you’ve reached the point where it is time to crunch those numbers. When it comes to how to calculate your mortgage, there are a few key considerations to keep in mind.
Financial risk managers are some of the most important people in the industry.
When people think of a risk manager, they often think of someone that manages risk. A financial risk manager does exactly that but with finances. They’re essentially the reason why businesses can succeed and grow.
Only 75 percent of the businesses started in the United States annually will ever reach the two-year mark. One of the main reasons failed business owners give for the demise of their venture is money problems. Instead of waiting until money issues bankrupt your small business, you need to take proactive measures to prevent this disastrous situation.