Tag: College

 

We Asked College Aid Experts How to Pay for School

While it’s hard to deny the value of a college education, rising costs have made it harder for students to afford their degrees. Average tuition at public, four-year schools surged to $9,970 for the 2017-18 school year and those costs rise to $20,770 per year when you add room and board, according to the College Board. A private school or an advanced degree, will cost you even more.

With these figures in mind, it’s important to know you don’t have to follow the crowd when it comes to earning a degree. You can plot a different path by looking for ways to reduce the cost of admission or by attending a different school.

Many college aid professionals and counselors wish you would consider alternative options. When it comes to paying for college, here’s what the experts have to say.

Pricey schools don’t always pay off

Ben Luthi, college expert for Student Loan Hero, says you can get a quality education without paying a premium. To accomplish this goal, you may have to consider a different school than the one you want to attend.

“The name of your school might help you get your first job, but it likely won’t matter for the rest of your career,” he said. That’s why you should make sure you include more affordable schools in your college search.

“And if you’re already in school and you’re overwhelmed with the cost, consider transferring. I’ve worked with countless people who went to colleges that I’ve never heard of,” he said.

Joe Orsolini, who serves as president of College Aid Planners, says many students and parents get hung up on college rankings or where a school lands on a best-of list. As a result, they make poor decisions regarding their undergraduate education.

“The reality is that nobody cares where you got your undergraduate degree,” he said. “Do you know where your doctor earned their undergraduate degree?” Probably not.

Focus on your return on investment

Robert Farrington, founder of The College Investor, says too many people think of college as a time to find themselves without thinking of the long-term consequences of their student debt.

“Students need to think of college as an investment, and so they need to focus on the ROI of that investment,” he said. “Why are they going to college? What will it cost? What can they expect to make after graduation in their first job? Based on those answers, students can get a good glimpse of their potential ROI.”

When you focus on your return on investment and think of college as a business transaction, you can avoid borrowing too much to pursue a degree that won’t pay off. Farrington suggests making sure you never borrow more in student loans than you can earn in your first year after graduation.

“That will allow you to realize an ROI on your education and keep your student loan debt at a manageable level,” he said.

You can save if you don’t live on campus

Debbie Schwartz, founder of Road2College.com, says students who have the option to live off campus or at home should consider it (just remember you’ll need renters insurance if you live in an apartment).

“In many cases, room and board can be more expensive than tuition,” she said. If you can live with your parents or another family member or share an inexpensive apartment or house with other students, you can reduce the amount of cash you need to borrow for school.

Take the right courses in high school

Kathy Hart, a California-based scholarship consultant and college coach, says many students assume harder courses will help them get into college. Unfortunately, this isn’t always the case.

“Take classes in high school that allow you to be successful,” she said. In other words, don’t fall victim to the pressure of having to take Advanced Placement coursework if you know if you can’t earn an A. If you can’t, an AP class could hurt your chances of getting into the school you want.

Apply early for scholarships

Jocelyn Paonita Pearson, scholarship expert and founder of The Scholarship System, believes all students can secure scholarships. She also believes they should start searching for grants as early as sophomore or junior year in high school and apply for every scholarship for which they qualify.

“Despite the majority of stories we hear, there are many students out there that manage to graduate debt-free,” she said. The key to earning scholarships is taking the time to find them and applying, and unfortunately this can require a big investment of time and effort.

Pam Andrews, college admissions coach for The Scholarship Shark, says it’s important to think about other types of aid as well – including federal or state grants and merit scholarships. Merit aid can be especially lucrative if you have excellent grades.

“Know what the college offers in merit aid, how you can qualify for it and what it takes to maintain it,” she said. “It is also important to know the application deadlines to apply for merit aid. Sometimes those deadlines are before a college’s application for admissions deadlines.”

Never assume you won’t qualify for a scholarship. Andrews says it’s important to approach the scholarship system with an open mind and without any limiting beliefs.

“If you don’t feel like you can succeed then you’re less likely to act or even think about acting,” she said. “Having the right attitude towards winning scholarships is the first step because it then moves the student to take action.”

Tuition may keep rising, but some states and colleges have made tuition free. Here’s where.


This article originally appeared on Policygenius.com.

 

3 Ways to Prepare for Student Loan Payments

The time has come. College grads are about to walk into the real world.

If you fall into this group, this also means it may be time to start paying back your student loans. According to Student Loan Hero, 71 percent of 2017 graduates carried student loan debt.

And, monthly student loan payments are typically between $200 to $300 a month. That’s a lot to swallow, especially if you won’t be earning much at your first job.

To help you tackle your student loan payments, it’s important that you first understand your repayment options, including the ins and outs of grace periods. Take a look at our primer on preparing to pay down your debt.

Understand your “grace period”

First things first: What is a grace period?

A grace period gives you a period of time after you graduate during which you do not need to make payments. When this timeframe ends, you’re on the hook to start making payments. If you don’t have a grace period, your payments start kicking in immediately.

“The first thing recent grads should do is see if they even have a grace period,” says Adam S. Minsky, an attorney specializing in helping student loan borrowers.

While most undergrad loans do have some sort of grace period, Minsky says the length of time can vary depending on the type of loan you received. For example, direct subsidized government loans have a grace period of six months, whereas The Federal Perkins Loan Program has a nine month grace period.

Got multiple student loans that you’re thinking of consolidating? If you really need a window of time to prepare become making payments, be aware that consolidating loans can make that grace period go away. Yet, there is a way around this caveat: make sure you put a grace period “delay” on your application. This will alert the servicer not to process the loan consolidation application until the end of your grace period, says Minsky.

Weigh your repayment options

Did you know that as a borrower you can choose different options for paying back your loans?

In the case of federal loans, you have seven different repayment options to choose from, depending on your eligibility. These repayment plans determine how much you pay, when you pay, and how long it will take you to completely pay off your loans.

Typically, if you do not request a repayment option, you’ll automatically be placed in the Standard Repayment plan. Under this plan, your monthly payments are fixed and spread out over 10 years. However, there are several other plans that may work better for you.

For example, you may qualify for an Income Driven Repayment Plan, whereby payments would comprise 10 percent of your discretionary income. In order to start the process and be considered, you must first fill out the application on the StudentAid.gov site. Another option is the Graduated Repayment Plan. For this option, your monthly payments start out on the low end and increase over time. Only certain types of federal loans are eligible for this plan. You can find out whether or not you are eligible by visiting StudentAid.gov. To figure out which repayment option is best for you, you can also run the numbers via calculators provided by StudentLoans.gov and StudentAid.ed.gov.

Some types of borrowers – particularly those with government jobs or those employed by a non-profit – can enroll in a repayment program under the Public Service Loan Forgiveness Program (PSLF). This program forgives the balance on Direct Loans after you make 120 qualifying payments.

The earlier you start making qualifying payments, the sooner you’ll reach the requirements needed for forgiveness. Just be aware: any payments you make during a grace period don’t count, so you’ll have to forgo the grace period by immediately enrolling in a repayment program, according to Minsky.

Start making payments ASAP

Let’s say you landed a job right out of college. If this is the case, you’ve got some money coming in and you may want to start paying back your student loans during your grace period.

“Since 2012, there’s no interest subsidy for most federal loans during the grace period, so you can save money long-term by paying something towards your student loans during this time,” says Minsky.

Even if you don’t have a full-time job lined up, you can still start paying back your loans immediately. Perhaps you can get a part-time job while you’re hunting for a job in your field. Or, you can start a side hustle and take advantage of the gig economy.

You can also sit down and create a budget incorporating your student loan payments.

Final Thoughts

As you can see, the more you understand your student loan repayment options, the better off you’ll be. So, make sure you educate yourself on the types of loans you have and your applicable grace periods. From there, you can create a plan to pay back your loans. Once you wrap your mind around this and budget for your payments, you can start saving for your other goals.

 

6 Things You Should Do Right After Graduation

So, you graduated college. Now what?

Indeed, graduation is a monumental achievement. It’s also a time full of changes and this may cause feelings of fear and anxiety. Perhaps you’re starting your first job or still searching for your dream job. Maybe you’re leaving your friends and family to move across the country. Or, perhaps you’re living on your own for the first time and learning how to save money.

Wherever you may be on your post-grad path, life can feel overwhelming. So, take a deep breath and start planning now for long-term success. To help you get going, here are 6 tasks you should do immediately after graduation. Ready, set, go!

1. Create a Career Plan

Whether or not you have your first job lined up, now is a great time to consider your career plan. Sure, you’ve probably thought about your career while in college. But now it’s time for a reality check: what are your job prospects really like?

As a good starting point, identify your strengths and interests. Not sure what talents really set you apart? Ask your friends and family for their input.

Next, map out your goals. Where do you want to be in 20 years? What about 10? By keeping your long-term goals in mind, you can better evaluate your options. With a career plan, you’ll scrutinize each job opportunity more carefully. Career plans can also help you move forward confidently as you’ll hopefully be taking steps in the right direction.

2. Clean Up Your Social Media

Do you have some embarrassing photos and posts on social media? You’re not alone. Even if your posts are meant to be funny, you never know how a potential employer could react.

According to CareerBuilder, over 70 percent of employers search job candidates’ social media profiles before making hiring decisions. According to the same study, over 50 percent of employers decided not to hire a candidate after viewing something negative on their social media profiles. Whoa.

So, before you start applying for jobs, make sure your social media sites are professional, or at least private. Pro tip: remove any photos of you partying or acting in any way than can be frowned down upon.

3. Update Your Banking

Now is an ideal time to consider your banking options. It may be in your best interest to switch to a bank that is free to sign up and has no fees.

For example, if you are moving to another state to start a new job, you may not have access to your current local bank. Or, perhaps you want a bank account that will help you save money. One way to achieve this goal is to open a Chime bank account. The best part about a Chime account is that there are zero fees.

4. Network like Crazy

You never whether that person you recently met will be the ticket to your next big gig. The bottom line: post-graduation is a crucial time to network.

Just take it from Tom Farley, the president of the New York Stock Exchange. In an interview in Fortune Magazine, Farley stated, “When I think about my own career, I owe every job I’ve ever had to networking.”

If you’re intimidated by the idea of networking, don’t fret. You can begin by simply sharing your professional goals with your friends and family. They likely have connections to people who may be able to guide you in your career. And, social media sites like LinkedIn allow you to make professional connections from behind a screen.

With LinkedIn, you can reach out to professional recruiters and hiring managers, and connect with people in your field. In fact, about 95 percent of recruiters use LinkedIn to find qualified candidates, according to an article by US News & World Report. So don’t miss out!

5. Create a Budget

Landing your first job and seeing those paychecks hit your bank account is exciting. But, as you enter the post-graduate world, you’ll also encounter a slew of other expenses. It’s easy to spend more than you earn.

To avoid overspending, it’s a wise idea to create and stick to a budget. For tips on picking out a budgeting style that works best for you, be sure to check out our budgeting guide.

6. Understand Your Student Loans

Unfortunately, many recent college graduates don’t know how to deal with paying back their student loans. Some don’t even realize how much they actually borrowed.

In fact, according to a study by the Brookings Institute, only 38 percent of college students know how much money they borrowed to pay for school. Furthermore, 14 percent of students with student loans incorrectly reported having no debt at all, according to the same study. Because of this, many recent college graduates suffer a rude awakening when they find out what they really owe.

So, it’s best to be educated about your loans. Your student loan provider should be sending you information about how to access your student loans and make payments. If you don’t hear from your loan providers shortly after graduation, you should contact them directly.

If you have federal student loans, you can find out who your servicer is by going to the National Student Loan Data System. Start by clicking on “Financial Aid Review,” and accept the terms and conditions. After that, go ahead and login. In order to log in, you will need your FSA ID. If you do not already have an FSA ID, you can easily create one on the web page. Once you login, you will see all of your student loan information, including your total balance. From there, it’s a good idea to figure out how you will tackle your loan payments by factoring this into your budget.

Relax!

You’ve worked hard to get to this point. Graduating from college is a major accomplishment. So, while you’re setting yourself up for financial success, you should also take advantage of this transition time by relaxing and enjoying the summer. Just remember to budget for your summertime fun!

 

College Grads: What to Watch out for When Choosing Your First Adult Bank Account

Shortly after graduating college, reality sets in: you’re a real adult now. It can be overwhelming, but it’s time to deal with your financial life and this includes taxes, student loan debt, and mortgage or rent payments. It’s also time to get down to business when it comes to saving money.

First things first: you’ve got find a bank that is free and will help you manage your money efficiently. If you had a student checking account at your college bank, it’s time to get rid of that and instead open a bank account that suits your new adulting lifestyle.

Luckily, opening your first adult bank account isn’t as difficult as it seems. Here are 5 tips to help you get you started.

Consider Accessibility and Convenience

If a brick-and-mortar bank is important to you, make sure that a branch is easily accessible should you need to make deposits, withdrawals or talk to a teller. This doesn’t mean your bank has to be on every street corner in your neighborhood. But, you also don’t want to travel far if you have an issue with your account and need to speak to a representative.

With this in mind, make sure your bank is open during the hours you can get there. For example, if you have mostly evenings available during the week, you may want to consider a bank that can accommodate those hours.

Another tip: you may want to consider an online bank account, especially if you never go into a branch and prefer to deal with banking issues online or on the phone. With an online bank, you’ll have 24/7 access to your account. You can also manage your account from home or on the go on your mobile device.

Check the Fees

Banks fees are one of the most important factors to keep in mind when choosing where to open your first adult bank account.

For starters, miscellaneous fees can eat up your account balance fast. In fact, the average U.S. household pays more than $329 in bank fees every year! Some of the most common bank fees include:

  • Monthly maintenance fees
  • Minimum account balance fees – charged if your daily account balance falls below a certain threshold
  • Overdraft fees. These can run you up to $35 per overdraft incident
  • ATM fees. These are charged when you use an out-of-network ATM
  • Refunded deposit fee – charged for a bounced deposit check
  • Paper statement fee
  • Lost debit card fee
  • Foreign transaction fee

The good news is that most of these fees can be avoided depending on which bank and account you choose. For example, Chime makes banking faster and has no fees, ever. That’s right. No overdraft fees, minimum balance requirements, monthly service account fees, ACH bank transfer fees, card replacement fees, or foreign transaction fees. In addition, Chime members have access to more than 30,000 fee-free MoneyPass ATMs located all over the U.S.

Read the Fine Print

Before you open a bank account, be sure to read the fine print in order to fully understand the terms and details.

For instance, it’s important to read about any applicable fees associated with your account, as well as other terms and conditions. In addition, make sure you understand the bank’s privacy policy and familiarize yourself with features you can take advantage of as an account holder.

Consider the Saving Account Benefits

While you may be mainly focused on opening a checking account, it’s a wise idea to open a savings account as well.

Pro tip: it helps to keep your spending money separate from your savings. As part of your savings plan, you may want to start a fund to cover emergencies and unexpected expenses. Plus, you can begin saving up for big purchases in advance. This will help you steer clear of racking up credit card debt.

When it comes to choosing the best savings account, you may want to consider a bank that will provide an interest-bearing account and automatic transfer options. And, just like with a checking account, you’ll want to examine the fees and read the fine print. One major rule set by the Federal Reserve is that banks cannot allow you to withdraw money from your savings account more than six times per month. Some banks may even have an excessive withdrawal fee, so make sure to check on this.

Comparison Shop and Choose Wisely

Post-graduate life is full of changes and new beginnings. And, your first bank account after college marks a new start on your adult financial life. By following the advice above and comparison shopping, you’ll be one step closer to finding the best bank for you.

 

Why Career Planning is Important and How to Do It

Millennials are more than three times as likely to switch jobs than older generations, according to a recent poll by Gallup. But with all the job hopping going on, it can be difficult to craft a long-term career strategy.

A solid career plan is important in that it can provide a roadmap for your future. This, in turn, helps you make informed choices about your current job situation as well as future career moves. A broader career plan is also important when it comes to helping you stay inspired.

Interested in creating your own career plan? Here are three reasons why you may want to do this right now.

1.  You’ll leverage your strengths

People who tap into their strengths at work are six times more likely to be engaged, according to Gallup. So, if you want to enjoy your career and collaborate more with your co-workers, it’s key that you understand what your strengths are. Once you know this, you can leverage those strengths.

If you’re now thinking that this flies in the face of the common advice that you should work on improving weaknesses, well, that’s important as well. Yet, when it comes to enhancing your career, focusing on your weaknesses shouldn’t be your main strategy, according to BiggerPockets.com.

2. You’ll take steps in the right direction

No one is going to develop your career for you, and a successful career doesn’t happen by chance. In order to succeed, you’ll need to know where you want to go. This way you can work on developing skills to help you achieve your milestones.

For example, if you’re a customer service agent but want to become the CEO of the company, you need to know what steps it takes to get there. For example, it can start with becoming a supervisor then working your way up to a team manager. From there, you may want to develop additional skills so that you can jump from middle management to the executive team, and so on.

When you have a career plan in place, you will be more apt to take steps in the right direction. With this mindset, you’ll also be less likely to blame external forces when things don’t pan out as you planned. Instead, you can take a step back, make a course correction and get back on track!

3. You’ll develop more confidence

If you don’t know where you’re going, you may end up lost or in the wrong place. In addition, if you don’t have a clear goal in mind, it’s harder to gain the self-confidence needed to take advantage of opportunities when they appear.

For example, if you want to become a team manager but you have no plan to achieve this goal, you may not be prepared to compete with others for the job. This, in turn, can be disheartening. Bottom line: you need a plan to both give you a direction and a sense of purpose in your daily work life. This makes it easier to be intentional about your work. For example, if your goal is to replace your manager when she gets a promotion, you may choose to ask her to mentor you. This then becomes part of your career plan.

Three tips for creating your best career plan

Now that you understand why it’s a good idea to have a career plan, let’s discuss how to go about putting it into place. Take a look at these three steps and you’ll be on your way.

1. Think big

Don’t sell yourself short with your career plan. If you don’t currently have the skills necessary to land your dream job, that shouldn’t stop you from aiming for this goal. Plus, by looking at your written out plan, you may gain more motivation.

Also, don’t restrict your career plan to your current job or path. If your dream job entails doing something that isn’t related to your current career at all, spell out the steps that it would take to make the switch.

2. Define your strengths and what you enjoy

Building wealth is a main motivator when it comes to career planning. With that said, money shouldn’t be your main objective. Why? Focusing on money alone can lead to an unhappy job experience and early burnout.

Instead, focus on what you enjoy doing and what you’re good at. If you’re having a hard time pinpointing your talents and what you love about your job, don’t be afraid to ask family members, friends, or even a trusted co-worker. They may have some insight based on past conversations.

This exercise may shed some light on talents you weren’t aware you had. Better yet, you may discover that there aspects of your current job that you want to carry over to your next position – regardless of whether it leads to a windfall of money in the form of a higher salary.

3. Be adaptable

There’s no guarantee that your career will turn out exactly as you planned. Another thing to note: as you take steps toward your dream job, you may notice your preferences have changed over time. So, don’t be afraid to adjust your career plan. Doing this doesn’t mean that you’re giving up on your dreams. It simply means that you’re recalibrating.

When I first graduated from college, my goal was to start at the bottom of a large corporation and work my way to the top. But when I couldn’t find a job for six months, I had to come up with a different plan. Instead, I got an entry-level job at a bank and started blogging about personal finance in my spare time. While I didn’t make much money from the blog itself, it launched me in a different direction. My writing career was born.

As you go through your own planning process, you can determine what to tweak and what to keep status quo. An added perk: if you remain adaptable, you may be surprised at the doors that open for you. Perhaps you’ll even find yourself in a brand new career. When and if this happens, you may want to go back to your original career plan and add in new goals.

The bottom line

Career planning is important because it can help you leverage your strengths and build confidence. More importantly, it encourages you to take ownership of your career. The guidelines here are just that: guidelines. You can use these tips and tools to help you create the best navigation system for you. Are you ready to map out your career path and enjoy the journey?

 

How to Choose a Bank Account After College

After graduation, the world of adulting offers exciting possibilities. But it also presents unique challenges – and a host of unexpected expenses. If you’re like many recent grads, you may be wondering how to make decisions that will put you on the path to long-term financial success.

Although there are many roads leading to a positive financial future, an easy way to start your journey is to establish a bank account that will help you achieve your savings goals. Take a look at our 4 tips for choosing a bank account after college.

Set realistic financial goals

Before we go any further, it’s important to define your money goals. You don’t have to get as elaborate as a vision board if you don’t want to. The important thing is to set goals that are SMART. This means they should be Specific, Measurable, Attainable, Relevant and Time-Bound.

Let’s say that your goals include paying off all your student loans and starting an emergency fund in the next few months. It’s going to be pretty hard to achieve this without putting together a framework using the SMART goal strategy. Here’s an example of the “smart” way to turn your debt-free dreams into an action plan:

Goal: You’d like to build up a $3,000 emergency fund within six months.

This may seem lofty but once you have a goal, you can start working toward achieving it. And, the right bank account can help you get there faster. For example, you can choose a bank account that encourages saving and makes it easier for you to sock money away seamlessly. More on this topic soon.

Explore your options

If you currently have a student checking account with no fees, make sure to read the fine print because those fees might kick in once you graduate. The good news is that you aren’t obligated to stick with your college bank and there are many other options available.

One option is to look into credit unions. If you’re not familiar with credit unions, they function like banks, but instead of being privately owned, they are non-profit member-owned organizations.

When I bought my first car a few years ago, using a credit union allowed me to get a more favorable interest rate than at a traditional bank or through the car dealership. I also ended up opening a bank account at the credit union because the fees were low.

However, one drawback of using credit unions is that they can sometimes are behind the curve when it comes to technology. For example, last year, I needed to make some changes to my account and had to send a fax with my request. I then had to go to FedEx to get this done after I Googled “How do I send a fax?” An online portal would have made my life much easier.

Online banking can meet your needs without the hefty fees

Why are online bank accounts gaining so much popularity? There are a few reasons. The first is that the future is now when it comes to doing business online. And that includes financial services such as banking.

Think about it. When was the last time you set foot inside a bank? If your answer is “when I opened my bank account,” then it probably means it won’t be too difficult to make the switch to free account. In fact, most millennials prefer to bank online.

However, apart from the convenience, banking with traditional “big banks” can cost you a lot of money in unnecessary fees.

About two years ago, when I got serious about my finances and created a budget that fit my personality type, I reviewed my bank account statements for the previous 90 days. Apart from revealing one too many Target runs, I was shocked to realize just how much I paid in banking fees that I didn’t even know about.

Here’s a breakdown of the fees I paid each month:-

  • Minimum Balance Fees: $15. Upon further digging, I realized that my “free” checking account came with strings attached. If my account dipped below $100 at any time during the month, I ended up paying a fee.
  • Overdraft Protection Fees: $35.
  • Service Fees: $1. Not a huge amount but when you are a 20-something, every penny saved counts.

This all added up to hundreds of dollars each year – money I paid to maintain a big bank that I rarely set foot in. Money that I could have used to pay off debt or to save toward a vacation.

If you want to start off on the right foot after graduation, then fees should be a deal breaker when it comes to choosing a bank account. To avoid unnecessary spending. look for an online bank account like Chime that doesn’t believe in unnecessary fees. In fact, if you attempt to make a transaction that is greater than the amount in your Spending Account balance, Chime will actually decline the transaction and immediately send you a push notification through the app to let you know why it was declined. You will always have a real-time update on your finances at your fingertips.

Automate Your Savings

One of the best ways you can win at adulting is to automate your life starting with your savings. Chime makes it easy for you do this in two ways. The first is to help save as soon as you get paid. If you open a Chime bank account and select Automatic Savings, Chime will automatically transfer 10% of every paycheck directly into your savings account.

Another awesome Chime benefit is that you can save every time you spend. Chime actually rounds up each transaction made with your Chime card to the nearest dollar and transfers the round-up from your Spending account into your Chime Savings account.

How’s that for a bank account that has your best interests in mind?

 

So You Want to Move Out of Your Parents’ House? Try These 8 Strategies

As millennials, we want to do it all, be it all and see it all. But there’s one big thing holding many of us back from achieving our version of the American dream — financial independence.

In fact, according to ABODO’s analysis of U.S. Census data more than one-third of millennials have yet to leave the nest. And the proportion of older millennials — ages 25 to 34 — who are living with their parents has reached 19 percent, the highest point ever, according to the Associated Press. Why the high numbers of millennials residing in their childhood basements? Economic necessity.

The good news? Your circumstances right now don’t have to determine your possibilities for the future. Here are 8 strategies for achieving financial independence and moving on out of that musty basement:

Know where you stand today

It’s time to have a heart-to-heart with yourself about your current financial situation. When I first started on my journey to financial freedom, the first thing I did was review my bank statements from the previous 90 days. I was shocked to find out that $20 here or $50 there added up to hundreds of dollars each month spent on things I didn’t need.

Apart from coming to terms with your spending habits, it’s important to calculate your total debt number. Try creating a simple spreadsheet to list all your student loans and credit cards. Good ole fashioned pen and paper will work just fine as well.

The purpose of this exercise isn’t to throw yourself a pity party but rather to lay the groundwork for getting to where you need to be.

Beef up your financial knowledge

It can be really overwhelming to start learning everything there is to know about personal finance. However, online bank accounts like Chime can help you make proactive money decisions.

Start with the basics such as understanding how to create a budget, manage debt, save for retirement and invest for the future. When you’re just starting out, it’s important to do your own research but remember there’s no shame in asking for help from a financial expert. You can search for a fee-based financial advisor here.

Work backwards

Armed with some financial knowledge, it’s now time to set your plan into motion. Choose one big picture goal that you’d like to achieve over the next 12-24 months. For example, moving out of your parents’ house.

The cost to move out will likely be several thousand dollars including a security deposit on an apartment, first month’s rent and buying furniture. Once you’ve come up with the amount of money you’ll need, divide this up into months. Monthly savings goals are a lot more manageable and you can give yourself a small reward each time you achieve them — #winning.

You can use this same approach to figure out your monthly expenses when you move out.

Automate your savings

Having a plan means very little if it’s hard to execute. One of the easiest ways to save money is to take the guesswork out of the equation completely. Chime makes it easy for you to achieve this goal through automation. With a Chime bank account you can save when you get paid by automatically directing 10% of every paycheck into your savings account.

As a bonus, if you use your Chime card to make purchases, Chime will round up each purchase you make to the nearest dollar, and transfer the roundup amount from your Spending Account to your Savings Account.

Get aggressive with paying off debt

There are so many advantages to eliminating your debt sooner rather than later. Apart from achieving financial zen and saving on ridiculously high-interest costs, getting rid of debt frees up your income. Imagine a life without payments — the possibilities are endless!

There are lots of ways to pay down debt quickly such taking on a side hustle or two, dramatically reducing your expenses or considering tools such as credit card balance transfers.

Go on a fiscal fast.

You could also try out a fiscal fast. This is like going on a diet but for your finances. The idea of a fiscal fast is to completely eliminate all non-essential spending – like coffee runs – for a specific period of time. Short fasts last only a few days whereas more extreme ones can last an entire month. Along with jump-starting your savings goals, fiscal fasts also teach you to be financially disciplined and even creative.

The key to success is to transfer all the money you would have spent during the weekend or month into a savings account. I’ve done five fiscal fasts in the past year or so. Each time I’ve saved between $250 and $300. This helped me get rid of my credit card debt a lot quicker.

Invest in yourself.

You are your biggest asset. Take the time to invest in your personal and professional development and watch the returns roll in. You might choose to start with investing in your career or professional advancement by learning new skills, participating in training sessions, or taking a new course. These steps can set you up for your next promotion and possibly even a raise.

There’s also huge potential in exploring your creative side. Lifehack notes, “creativity, in any form, helps us to grow personally and professionally, to view problems and solutions in different ways and to utilize other parts of our mind that may have been previously untapped.”

Throughout this journey, don’t neglect self-care like eating well-balanced meals and exercising. Remember, health is wealth.

Check your thoughts regularly.

You might be surprised by what positive thinking and even meditation can do for developing good financial habits. These tools can help you stick to your goals, bounce back from setbacks and reduce anxiety when it comes to your finances. Now, it’s time to go and do! Start implementing even one of these strategies per week and start writing your financial independence story today.

 

Money Advice for College Grads: How to Create Long-Term Financial Success

Graduation is right around the corner. You’ve worked hard and earning your college degree is a huge milestone — one of the biggest in your life.

Now comes yet another challenge: Managing your finances in the real world. Indeed, as you set out into the working world, you’ll need to keep in mind living expenses, like paying rent and household bills. It would also benefit you to start an emergency fund and begin saving for retirement (even if it’s 40 years away). And don’t forget your student loans, which won’t go away on their own.

Take it from me, getting on the right path now sets you up for long-term financial success. Here are some tips to get you started:

Live within your means

If you’re one of the lucky few, you may already have your dream job lined up after graduation, which means you can say goodbye to a strict noodle diet or a minimal college student budget.

Yet regardless of what type of job you have, you’ll still need to learn to live within your means. To do this, you’ll have to take a realistic look at your income and expenses. Even if you lived in an off-campus apartment with roommates during college, going out on your own means you’ll have more expenses like utilities, Internet service fees, groceries, and possibly a security deposit (sometimes first and last month’s rent). Then there are other necessities, like transportation and insurance costs.

Having a budget in place is a smart way to make sure that your earnings can cover these expenses, ideally with money left over to save. If not, you may need to find ways to free up some cash, like getting a roommate, taking a side hustle, or cutting back on discretionary purchases, like gym memberships, eating out or cable subscriptions. Using a budgeting app such as You Need a Budget or Mint can help get you started.

Bank on a new bank

Finding a good bank that has your back should be high on your list and can save you a significant amount money. Most big banks rely on charging their customers fees and other unnecessary surcharges like minimum balances, overdraft fees, foreign transaction, fees, etc. In fact, the average American pays around $329 in bank fees every year. If you currently have a student checking account with no fees, make sure to read the fine print: those fees might kick in once you graduate.

A mobile banking app like Chime, on the other hand, is built with the sole focus of helping Member’s save money. There are monthly fees, no minimum balances, no overdraft fees, and no foreign transaction fees.  Chime is also an Automatic Savings app. Every time you use your Chime Visa Debit card, the app rounds up the spare change and deposits it into a Savings Account. Think about it this way: The money you save can also be put towards paying down debt or bolstering an emergency fund.

Pay down your debt

The average college graduate carries more than $37,172 in student loan debt, and those numbers are rising — over 275 percent in more than just a decade! This might be your biggest expense, and it’s your job to make sure you keep up with your payments. If not, you could risk going into delinquency or default.

When paying off your student loans it’s important to first, take note of how much you owe. Is it a mix of federal and private loans? You can access your total federal balance at the National Student Loan Data System. For private loans, you can check your credit report to see what you owe.

Aim to pay as far in advance as possible so you won’t fall behind if you encounter a lean month here or there. You can also structure your payments so that you pay the most each month toward your loans with the highest interest rates. Finally, you can make the minimum payments to those with the lowest interest rates.

If you are struggling to meet your payments and you have federal loans, you can also apply for a deferment or forbearance. These are types of temporary holds on your payments which allow you the time to regroup financially. Deferments can last up to three years, and if you can prove financial hardship, forbearances last one year. If it’s still too much of a hardship, consider refinancing your loans for new interest rates and payment terms that align better with your finances.

A final tip: You may also want to consider loan consolidation, whereby you can combine several loans into one new loan with a new, refinanced interest rate and/or extended payment terms, lowering your overall monthly loan payment.

Concentrate on your credit

For most college students, a campus meal plan and a debit card may have been your two main choices of currency. So, if you’ve never really used credit before, take this as a chance to start building your credit profile.

Building your credit up is essential because eventually, you’ll need credit to buy a house, a car, major appliances or even furniture for your apartment. In each of these situations, you may need to borrow money and in order to do this, lenders will want to know if you’re trustworthy enough to afford a loan and pay it back. For that, they’ll want to see that you have a history of using credit responsibly. In other words, lenders want to see that you don’t borrow more than you need and that you pay your bills on time. Welcome to the world of credit.

A credit card is the perfect “credit builder” because it gives you a chance each month to charge purchases to your card and pay it back at the end of each billing cycle. There are an assortment of student credit cards and secured credit cards designed for people with little to no credit history. To help improve your credit, it’s also important to pay off your credit card in full each month and avoid carrying a balance. This way you’ll be less likely to go into debt or be faced with paying off accrued interest charges.

Of course, using a credit card responsibly doesn’t mean you should say goodbye to debt altogether. Spending too much on credit is a signal to creditors that you rely on your credit card too much. For this reason, keeping a debit/checking account in your financial mix is a good way to offset your spending. We recommend the Chime Visa debit card, which encourages you to save as you spend. With each purchase, your transaction is rounded up to the nearest dollar and the rounded up amount is automatically deposited into your savings account.

Start investing

It’s OK if you think you’re too young to invest, or if you feel this is only something reserved for rich people or older generations. Those are feelings we all tend to have since there is truth to the idea that you need money to make money. So how does a recent college graduate saddled with bills even think about investment options?

For starters, you don’t have to be a stock market master to start investing. Investing is essentially saving money in a way that makes it grow via the power of compounding interest. When you begin your first post-graduate job, a good way to begin investing is to find out if your employer sponsors a 401(k) retirement plan with a matching contribution. If so, your employer will match your contribution up to a certain percentage. This is essentially free money.

If no 401(k) is available or if you’re self-employed, you can look into a Roth IRA. For 2017, the maximum you can contribute to this tax-advantaged retirement account is $5,500 if you’re under 50; $6,500 if you’re over 50. With a Roth IRA, your deposits are made with after-tax income and withdrawals are tax-free.

Whatever you do, don’t fall into the comfort zone of thinking that it’s too early to save for retirement. The earlier you start, the more your dividends and earnings will build. This can leave you with a nice, big nest egg when retirement rolls around.

On a final note, graduating college isn’t just about earning a degree; it’s a chance to reinvent yourself personally, professionally and financially. Take this time to make some changes to your money habits and you’ll set yourself up for a lifetime of success.

 

3 Easy Changes to Decrease the Cost of Your Student Loan

The materials in this article are provided for informational purposes only and do not constitute financial advice

Graduating in 2009 seems so long ago, but if you’re like me, your student loans are still looming large. Turns out, student loan debt is the number one financial concern among Millennials (hello, fellow youths!) with over $1.2 trillion, yes, trillion in student loan debt.

For years I thought I was being responsible, making my minimum payment each month. Little did I realize that I was not doing myself (or my future self) any favors. Next time you get a statement regarding your loan, read it. Chances are most of the minimum monthly payment pays for interest on the loan, not the principal loan amount.

Paying only the minimum may make things easier in the present, but it can greatly extend the life of your loan and end up costing you considerably more overall. The more you pay now, the less you pay over the life of the loan.

Nobody wants to think about budgeting, but there are easy ways to cut back on your spending so you can apply that savings to your student loan payments. The first step is understanding where your money is going (and where it doesn’t have to be going at all). The next step is cutting back and applying those savings to help pay more than just the minimum.

Need some ideas on where to start? Here are some areas where I cut back:

The Cable Bill

Cutting the cord can be one of the most cost-saving measures you can take. I did it a few months ago and my cable and internet bill went from $120 to $30 for just internet. That’s $90 in savings, every month.

Think about it. Your friends and co-workers may still be talking about the premiere of the new Daily Show on Monday, but did you actually watch? Probably not. I didn’t either. Instead, I enjoyed drinks with friends after work and then caught up on the highlights, like Trevor Noah’s opening segment.

Chances are, you’re watching less TV and more Netflix. And with the average cable bill hitting a high of $99 this year, that means you’re paying your cable company when you don’t really need to. Get rid of the cable, keep the internet and start streaming. Today there are more choices than ever–from Hulu to HBO Now, to Vessel– for awesome content on demand.

Savings: $90 per month

The Morning Coffee

My morning coffee routine is hallowed ground. For years I religiously paid tribute to the Starbucks Siren. Turns out that $2 tall coffee every day really adds up. On average, I was spending about $40 a month on coffee.

Needless to say, I’m no longer paying for coffee on my way to work. I’m becoming my own barista and making coffee at home. I have become a master of the pour-over method. It’s simple, doesn’t take much effort, and tastes great. Try this method once, you’ll be addicted. It is arguably the best way to drink coffee.

Projected Savings: $30 per month

The Weekday Lunch

In downtown San Francisco, there are countless options for lunch right outside my office. But buying lunch five days a week gets expensive. It’s tough to find take-out lunch options for under $10 per day. Even when I find cheap eats, I’m averaging $50 per week and $200 per month-minimum. That’s my student loan payment right there.

I now bring food to work most days–leftovers from the previous night or a sandwich I made in the morning–and have cut my weekly lunch bill in half.

Project Savings: $100 per month

These three small, thoughtful changes allowed me to save $230 every month. I doubled the monthly payment amount on my student loan.

If I’d continued to pay the minimum $200 payment on my $25,000 loan, it would have taken 219 months to pay off. At the end that 18 year period, I would have paid $18,611 interest. Do you know what you could do with $18,000? I do. Buy a water propelled jetpack, travel abroad, or travel abroad on my water-propelled jetpack.

On the other hand, by applying the savings I just made to my student loan and increasing my payment to $420, the amount of interest I’ll pay over the life of the loan goes from $18,000 to only $5,581. The life of my loan would also decrease from 18 years to 6.

Small changes really add up. When you apply these changes to help pay a student loan, your savings can go from a few hundred dollars a month to thousands of dollars over the years.

And when that happens, it frees you up to start pursuing your passions, even if it doesn’t include a water-propelled jetpack.

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