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The Free Financial Advisor

You are here: Home / Archives for United States

4 Tips to Pay Down Student Loan Debt

August 21, 2013 by The Other Guy 1 Comment

I can’t think of a better way to start of one’s adult life than to do so with over $35,000 worth of debt, can you?  Doesn’t the idea of starting your career already knee-deep in the hole sound wonderful?  In the words of Lloyd Christmas from Dumb and Dumber, “mmm..that sounds good.  I’ll have that.”

Or I won’t.

The average college graduate now leaves college with over $35,000 worth of student loan debt — many have said that the student loan bubble, which now tops $1 trillion (yes, that is trillion with a “T”) is the next major “crisis” in America.  I submit that it’s not the next major crisis. It’s already here.  In June, Congress couldn’t figure out what to do about student loans, so in  their infinite collective wisdom, they decided to let interest rates double from 3.4% to 6.8%.  Thanks.  We all appreciate that.

If you’re one of the umpteen thousands of people paying off oodles of student loan debt – how do you take care of it?

OG’s Student Loan Debt Tips

Step 1:

Be realistic with how much you owe.  Get an accurate count of a) who you owe; b) how much and c) the interest rates.  Many people have government and private loans spread hither and yon.  Before you create a repayment plan, you have to be honest about how much you have.

Step 2:

Build your personal financial plan.  This includes student loans, but also should include building a cash reserve, family planning, retirement planning, and other financial goals.  Having a singular mindset of  “I’m paying off my student loans before I do anything else… could lead to burn out and could impact how fast you reach your true goals.  Plus, depending on your career choice, you may be eligible for deferment or outright forgiveness.

Step 3:

Create a debt payment plan.  You have two options when it comes to paying off student loan debt: pay based on your income, or pay based on your indebtedness.  Visit www.studentloans.gov and compare payments to determine what’s best for you and your personal financial situation.

Step 4:

Work your plan and throw off discouragement.  Follow through with your well thought out plan.  You did steps 1 through 3, now just execute.  It will become tiresome and you will feel at times like you’ll never get it done – but you will.  Track your progress monthly and watch the balances fall.

Student loan debt can seem insurmountable, but with the right well-thought out plan based on your personal financial goals, you can pay those off quickly and efficiently and move on to your other financial goals!

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Filed Under: College Planning, Debt Management Tagged With: Debt, debt strategy, Loan, repay, Student loan, United States

Hero of the Week! – You.

December 19, 2011 by Average Joe 3 Comments

I usually reserve Monday for our Boner of the Week! post, in which I discuss an outrageous financial event or statement in the media. But in the spirit of the holiday season, today we’re turning in a different direction: random acts of kindness.

It’s a rare day when I’m happy when reading the news. It’s always politicians fighting, a celebrity has died or they’ve discovered drugs on a professional sports hero. So depressing. Friday, though, I was incredibly heartened when I read that people are randomly and anonymously paying off people’s layaway bill at K Mart and Walmart. Is it true that people, en masse, are taking up the reins and helping complete strangers pay their layaway bill?

It appears that it is. And it seems it’s going viral. Not only is this random generosity being chronicled in the Dayton Daily News above, but it’s appearing in newspapers across the nation

This is how charity should work. It’s exciting to know that people are donning the mask of anonymity and helping out people in need without expecting praise or financial compensation in return. Does this happen much? Are we, as a nation, charitable? Do we often help out complete strangers?

The quick answer?  Kind of.

Charitable Giving Around the World


This charitable giving index heat map, created by the Charities Aid Foundation, displays country-by-country ranking in the area of giving. Canada is the third most giving country overall, while the United States ranks fifth.

Digging Into the Charitable Giving Numbers

When it comes to gifts of money, 64 percent of Canadians and 60 percent of Americans hand over cash to charities. The Netherlands is the leader in this sub-category, with 77 percent of people gifting money to charities.

The numbers are reversed when it comes to giving time. 39 percent of the U.S. population and 35 percent of Canadians volunteer time for an organization. The leader? Turkmenistan, where a whopping 61 percent of citizens gave time.

What if someone is a complete stranger, such as the case in the K Mart an Walmart incidents? There’s some relatively good news in this area. 68 percent of Canadians answer that they have helped someone they don’t know, as compared to 65 percent of those in the United States. The leader is Liberia, at 76 percent.

If you’d like to dig further into charitable giving data, here’s a helpful chart at the Guardian website.

What does this data mean?

To me, it means that in the United States and Canada, we’re doing a fair job of giving, but we could be more charitable. We’re being soundly beaten by other countries in volunteerism, gifts of cash, and gifts to strangers.

Still, we’re among the leaders in most categories. This makes sense because the GDP of both the United States and Canada are high enough that you’d expect a similarly high level of charitable contributions. It’s exciting to see the number of people who donate time and give to strangers. At a time when many people are struggling, we’re still finding ways to go out and help in person, or to give to people who we may never meet again.

This random act of K Mart and Walmart kindness is particularly awesome to me because there is little chance that someone who performs these acts would even answer a survey to create the data above. This is completely anonymous giving, which makes it exciting.

Here’s a few of the reasons I love this story:

  1. No government mandated it, or told us that we’d all be taken care of. We’re actually taking care of each other without threat, payment or promise of acknowledgement.
  2. Although charitable contributions are tax deductible, people are waiving their right to claim this good deed for a tax break “profit.”
  3. The snowball effect is happening. As one person reads it, they get fired up and also give. You don’t need to come up with a new strategy or “neat” giving idea. Here’s a wonderful way to help a family.

The Potential Downside

I hope this random-acts-of-kindness outbreak doesn’t adversely effect donations to large, established charities. These organizations are well-oiled machines, and money you place in their capable hands is distributed only after careful due diligence in most cases.

I also hope that these people who are the random beneficiaries of this kindness use this opportunity to pull themselves up and create a better life. Instead of purchasing gifts they could pay off a credit card, or fix an important automobile that helps them keep their job.

I want this random giving to continue, but I don’t want it to go unrewarded. I’m not hoping some kids have a nice holiday season. I’m hoping their parents are able to use this as an opportunity to experience the true hope of the holiday.

What are you going to do?

First, I’m going to echo the call of many others. I’m going to focus on my giving pattern this holiday season. I’m going to volunteer time over the next few weeks to people and organizations that need my help. In fact, my children are already leaders in this area, helping out a local shelter on a weekly basis. It’s time for me to join them.

As a blogger, I’m hoping to ring the bell on this idea of random acts of charity. I hope we’re all able to help someone who could use a hand. All we need to do is think for a moment about whether it’s money, time or a gift to a stranger that is most important in our world.

Which is it for you? Does this “viral” campaign move you to give differently? What’s your next charitable act? Are you going to be the stranger giving some family a layaway present they didn’t expect?

If you’re going to do a random act, please share with us in the comments below….not for a pat on the back, but to share with other potential “random” gift-givers your ideas. I think we can feed off each others gifts to do better ourselves.

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Filed Under: charitable giving, irrelevant stories, Meandering Tagged With: anonymous giving, Canada, charitable giving, charitable tax break, Charities Aid Foundation, charity, Christmas and holiday season, KMart, United States, viral charitable giving, Wal-Mart

Holiday Travel – Wins and Losses

November 28, 2011 by Average Joe 1 Comment

****note: our Boner of the Week! post won’t appear this week because I was so incredibly focused on consuming pumpkin pie that I neglected to scour the internet for that just-perfect financial misstep. We’ll have some …um….stiff competition for next week’s prize, I’m sure.

I’ve finally returned from the big Thanksgiving trip, 2011 edition. Although I’m always good for a few blunders–like spilling ketchup on my sweater within five minutes of reaching the restaurant—financial missteps aren’t usually AverageJoe’s style. For your viewing pleasure, I thought it’d be fun to lay out the list of savings from my trip. And, just so you don’t think I’d a total prude, let’s detail the areas where I really stepped in it, money-wise. I list of these savings as “potential” because I don’t know if, faced with full retail, I would have really followed through with the purchase. There are so many ways to find a good deal, I’m becoming a curmudgeon when it comes to full-price.

Okay, here we go:

Cha-chingGot it right:

1) Hotel—I scored gigantic deals, thank you. First, I tapped the letters “Hotwire” into Bing (which doles out Rewards if I use it to search) in order to secure an $85 hotel room for $52 while on the road. The hotel had free breakfast, including waffles–mandatory on an AverageJoe holiday–so we avoided the cost of breakfast for me and two hungry teenagers. While in “holiday town” we also had our choice between my in-law’s basement or a hotel. Thinking quickly, chose the basement, but Mrs. AverageJoe overrode my decision. That’s when I remembered that I’m lucky enough to have a relative who works for a big, expensive hotel chain. He was able to put us up for four days at $56 each at an Embassy Suites. The normal rate is $115 per day. Cha-ching! Potential savings: $21 breakfast + $33 on-the-road hotel = $54, plus four days at Embassy Suites totaled another $236 in hotel savings + free breakfast savings of $84, giving us a whopping total of $374 in potential savings over what I normally would have spent.

2) Auto—We drove our most fuel efficient car rather than the most comfortable one. My Trailblazer, although completely paid off, is apparently the 2005 GasSucker model (never heard of it? Stop by sometime and I’ll give you a test drive. It’s fun to watch the gas gauge lower in real time as we tool around the neighborhood). In prior trips, we’d usually shell out $450 in gasoline expenses alone. This time, we opted for the 2011 Equinox, and only spent $212. What an incredible difference. Potential savings: $338.

3) Black Friday—This year I had a list of items I already needed or that my children wanted for the holidays. I also knew my brother in law would love DVDs. Best Buy had XBox games half off, a Toshiba portable hard drive I was going to purchase anyway for a third off, and some good DVDs for $.99 and $2.99. Potential savings: $215.

Oops:

1) Gasoline—I could have saved even more money in auto expenses had I used one of the gazillion apps available to find the lowest price gas stations. On two occasions I was stuck paying over $3.15 per gallon when only a few miles later (or earlier) I flew by stations charging as little as $2.97 (but usually around $3.03).  Potential overpayment: $6.80.

2) Black Friday—I missed some specials only because of poor planning. By the team we reached Bed Bath and Beyond, my coupon had expired. I also decided not to wait in an ugly hour-long line to check out at KMart. By the way…I haven’t been in a KMart in forever. Does anyone else think it’s a total hole? It might have been just the Black Friday chaos, but the racks were a mess, there was no festive music playing and they seemed ill-prepared for the long check out lines. Hey, KMart, if you’re going to make us wait forever to pay you money, wouldn’t it make sense to make the wait bearable?  I ended up buying my KMart purchase at Radio Shack, but I spent $14 more on a comparable item. Potential overpayment: $17.60.

3) Restaurants—I always check for specials before dining at home. In my rush to leave town, I totally forgot to research deals while out of town. That’s frustrating, because I ended up eating out a ton and paid full price for every meal. I have no idea how to calculate my potential overpayment, but based on 20 percent off, it was easily more than $50.

Final analysis: Man was my 2011 holiday travel was a blast! But it was also expensive, as are most vacations. All in all, my “potential” savings of $927 minus overpayments of roughly $74.40 totaled $852.60.

In the final analysis, considering that I stayed in comfort, drove a reliable automobile, and had the opportunity to beat my mother-in-law at Scrabble, I’ll take it!

How did you do during last week’s Thanksgiving holiday festivities?

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Filed Under: money management Tagged With: Black Friday, cheap holidays, Holidays 2011, KMart, RadioShack, Thanksgiving, United States

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