While a college degree is well worth the money, student loans can give anyone the blues. According to the Consumer Financial Protection Bureau, student loan debt is more than $1.3 trillion and continues to rise. For many younger Americans, it has become the largest household debt.The Department of Education offers forgiveness programs to help borrowers with student loan debt. These programs include the Public Service Loan Forgiveness program and the Teacher Loan Forgiveness program. Both programs are designed to alleviate the student loan burden. [Read more…]
College can be expensive! But there are still ways to help with the cost of college without getting into debt. Here are five ways to pay for college. [Read more…]
Preparing for college could be a daunting task. And considering the cost of it all could be simply overwhelming. According to the College Board, the average cost of attending an in state public college, including room and board for the 2014-2015 year is $18,943 and the number more than doubles for a private university averaging as much as $42,419!
According to the Economic Policy Institute, previous college graduates are expected to earn reduced earnings for the next 10 to 15 years. This is because wages have dropped significantly, approximately 7.7% since 2000 for new college graduates.
Because of these many issues, college graduates have to be extremely careful what they choose to do with their first paycheck and others to come.
Save a little
First, college graduates have to make certain they take advantage of employer retirement programs such as a 401(k). A 401(k) plan provides employees the opportunity to save money for retirement on a pretax basis. Most often, employers would match contributions dollar for dollar or a certain percentage, thus, giving them free money to be used for retirement. The great thing about a 401(k) plan is it allows employees to reduce their tax liability, since the amounts contributed are not taxed.
Split your pay in 3
Next, it is extremely important for college graduates to take a realistic look at what they can or cannot afford. A great way to split your pay is to consider splitting your pay in 3. 1/3 of your pay should be designated to savings and gifts. The next 1/3 should be allocated to living costs and finally the remainder should be allocated to discretionary expenses. Graduates should explore cost saving opportunities to keep more of their paycheck. Some great ways to save is to consider sharing costs with a roommate, foregoing home phone lines and cable, and maybe resisting the urge to financing a new shiny vehicle, but opting for a less expensive dependable used car.
Spending is as easy as ABC
Lastly, it is important to create a roadmap for your finances – a budget. Remember, your budget does not have to be complicated, just simple and easy to use. Consider using three steps — A, B and C — to get back on track.
A — Automated savings
If you have struggled in the past with savings, set up an automatic draft to have the money withdrawn directly from your checking account and deposited into a savings account.
B — Bill management
Determine the total amount of your monthly bills. Then, set up a checking account dedicated strictly to paying your bills.
C– Cash for other purposes
By this point, you have determined the amount you need to tithe, save and spend. Whatever remains is yours to spend as you wish!
Remember: your choice, your future!