Tag Archives: debt

How to Pay Off Student Loans

Taking out student loans is a fairly common practice. Many young people do this for the sake of investing in their education or otherwise being able to attend college or university. Initially, being able to take out student loans and attend college may seem like a dream come true. However, this dream can quickly turn into a nightmare when young people are not only billed for the money they borrowed, but also the subsequent interest fees which come along with it.

Virtually everyone has heard of the countless horror stories of young people who spend decades or even lifetimes attempting to pay back their student loans. Thankfully, there are some helpful tips for those who wish to pay off their student loans in a reasonable time period and enjoy the upsides of being debt-free and financially well-off.

Look Into Certain Occupations

Student Loan Hero explains that there are various occupations which offer certain mandates in exchange for forgiveness of borrowed funds. Usually, jobs of this nature fall into the category of teaching or providing some other type of public service. However, taking advantage of such an opportunity requires more than simply applying for the job and being accepted. In most cases, these type of occupations also require work terms in addition to various mandates.

Finally, if an individual is ineligible or otherwise barred from receiving student loan forgiveness, they will have likely incurred additional interest fees during the time they spent towards acquiring forgiveness. For this reason, students should always look into whether or not they are eligible for this opportunity prior to pursuing it.

Make Certain Lifestyle Changes…at Least Temporarily

Rarely does anyone enjoy changing their lifestyle for the sake of having to pay back previously borrowed funds. However, the reality is that student loans must be returned, one way or another. Hence, Nerd Wallet advises young people to look for various ways to reduce their expenses and put the extra money towards paying off their student loans.

This doesn’t mean that individuals who owe student loans can never go to the movies or dine out; however, they would do well to perhaps engage in these activities less frequently or find similar ways to decrease what they owe to the government. This is can be done by either decreasing expenses or increasing income. Ideally, if both changes are successfully implemented, young people will be able to pay off their student loans at a much faster rate and save thousands of dollars, if not more.

A Final Word

The amount of young people who owe student loans is increasing each and every day. For this reason, more and more individuals are questioning whether or not college is truly worth it. Nevertheless, those who have already incurred loans will have to pay them off, one way or another. Many young people make the mistakes of either delaying payments or only paying the minimum amounts. This is not conducive to financial or economic success.

Finally, individuals who believe they can cheat the government out of getting returns on borrowed funds should tread very carefully. People who play this game never really win; the government almost always get their money back — on top of the sky-high interest fees.

 

Authored by Gabrielle Seunagal

How to Recover From Bankruptcy

Millions of individuals have filed for bankruptcy since its inception. This may come as a shock to many people who generally view bankruptcy as a state in which irresponsible individuals find themselves. Although bankruptcy occurs when someone is unable to pay their debts, there are a variety of circumstances and decisions which can bring about this unfortunate situation.

According to Investopedia, medical expenses, employment loss, excessive spending/misuse of credit cards, marital divorce, unforeseen financial emergencies, and more expenses than revenue are some of the most common factors which have prompted bankruptcy. In the best case scenarios, people would proactively take steps to avoid digging themselves into this hole, but the best scenario is not always the one which ends up playing out.

Thankfully, there is still hope and various ways in which people can recover and otherwise break free of the bondage that is bankruptcy.

Pinpoint Your Financial Habits Which Prompted Bankruptcy

Many great minds have stated that those who fail to learn from history and past mistakes are doomed to repeat them. This is especially applicable to financial habits and money-related decisions. As a matter of fact, U.S. News recommends people to evaluate their financial choices and pinpoint exactly what led them into bankruptcy. Someone who went bankrupt because of debts should actively seek out additional revenue streams. An individual who experienced bankruptcy due to an unforeseen emergency should be sure to habitually put aside funds in the event of unexpected expenses. Failure to prepare is, in essence, preparation for failure.

Make Payments with Cash or Debit ONLY

So many cases of bankruptcy can be traced back to people living way above their means and constantly swiping credit cards for things that they can’t afford. This type of reckless spending is extremely problematic and will certainly kill any potential for forthcoming financial gain and security. Therefore, making payments exclusively with cash or debit not only prevents excessive credit card use, but cash and debit payments furthermore motivate the individual to earn the necessary funds to cover their expenses.

Credit cards can be beneficial if the person exercises discipline and self-control. As a matter of fact, many companies have advised individuals who are recovering from bankruptcy to use credit cards. However, a person who still lacks the control to not swipe, swipe, swipe the card at every turn will probably do well to simply make cash or debit payments. After gaining some financial security and acumen, one can then look into applying for a credit card.

Relinquish Self Blame

Although taking responsibility for one’s actions is paramount, so is not falling into the trap of negative self-talk. Bankruptcy is not fun, nor is it an easy state to be in; therefore, many people can eventually begin to feel perpetually discouraged. This feeling will not change bankruptcy, however, excessive self-blame does have the potential to distract from steps that the individual could take as they work to improve their financial health.

Remember…getting knocked down happens to all of us, but the decision to stay down is entirely different. There is always room for self-improvement. It all begins with you.

 

Authored by Gabrielle Seunagal

How to Financially Prepare for College

In many regards, college is viewed as a rite of passage into adulthood. While various individuals maintain different opinions regarding college, its merits, and potential pitfalls, there are certain occupations where a professional degree is absolutely paramount. However, nothing in life comes without a cost.

This is especially applicable regarding college; higher education is notorious for its costliness, especially in the United States. Therefore, being financially prepared for college is critical; those who are not prepared often find themselves ensnared in debt. Student loans are not pretty; neither is the associated debt which often accompanies it. This is why the following steps will prove to be especially helpful for current (and future) college students.

Maintain Excellent Grades

In a perfect world, all parents would stash aside money for their children to attend college. However, the world is far from perfect. Therefore, being proactive and taking the proper steps to prepare for college may very well fall on the shoulders of young people; according to The Simple Dollar, maintaining great grades can open up a lot of doors. Many of those doors can lead to financial opportunities for college, such as scholarships, grants, and even the ability to forego certain classes which other students may be mandated to take due to poor marks.

Set Up A Budget

Although college may seem like the time to party, immerse oneself into new activities, and soak up such a new phase of life, students should still be sure to have a budget in place. Having a precise and detailed list of expenses (such as monthly phone bill, groceries, personal care items) can particularly come in handy. Dividing up expenses and having an exact number regarding the amount of money coming in and going out can make a great difference and help students truly assess their current financial state.

If a college student finds him or herself having an extremely tight budget, they may want to consider taking up a part time job. The job should not interfere with their studies, but provide an income stream which can reduce financial stress. Many people who attend college can sometimes work to pay off their student loans; this can truly pay off down the road.

Avoid Common Traps

Believe it or not, there are a litany of mistakes which are quite common for college students to fall into. The Balance documents some of the aforementioned mistakes as mismanaging student loan funds, choosing overly expensive colleges, and going crazy with credit cards. While each of these pitfalls have their own unique elements, the great equalizer between them is the lack of frugality.

Virtually everyone loves to spend money and have nice things, but this comes with time. In the case of college students (and others who are just starting off in life), frugality is wisdom. Racking up credit cards, damaging credit scores, and otherwise spending money that one doesn’t have are common mistakes which college students often make due to a lack of knowledge and real world experience. The foregoing traps should always be avoided.

 

Authored by Gabrielle Seunagal

The Importance of Living Below Your Means

We live in a day and age where materialism has dominated society. Countless people exhaust all financial resources and even go into debt from purchasing large homes, fancy cars, and other tangible items. More often than not, people choose this path in an attempt to impress people and show everyone how well off they are.

In actuality, the wealthiest and most well-off people live below their means. There are several upsides to living below one’s means and it’s a strategy that all people should adopt if they are truly serious about attaining financial health.

Debt is Greatly Reduced or Avoided Altogether

As pointed out by Frugality Magazine, people who live below their means are considerably less likely to incur or retain debt. In order to understand why this is true, people must first understand the nature of debt.

Debt occurs when individuals attempt to live above their means, typically by spending more money than they earn. If you earn one million dollars and spend one million dollars, you’re still broke. If you earn one million dollars and spend two million dollars, you are officially one million dollars in debt in addition to applicable interest rates.

Living below one’s means is the best way to avoid debt if it has not already been incurred. After all, a person who spends less than what they earn will not be forced to borrow money in order to cover expenses. Borrowed money that is not paid back on top almost always comes with interest rates. The interest becomes yet another bill to pay on top of other expenses. In some of the worst case scenarios, people wind up spending more money in interest rates than they do in paying the original debt.

An individual who is meticulous and disciplined enough to live below their means can avoid all of the aforementioned financial hardships.

Savings Accounts Become Healthier

Another upside to living below one’s means is the ability to put more funds aside towards savings. Two of the most common financial traps are incurring debt and being hit by unafforadle monetary emergencies, due to one’s failure to save efficiently.

Each and every adult should be putting a percentage of their earnings into a savings account each time they get paid. Not only does this cover any unexpected occurrences such as car accidents, theft, or layoffs, but the psychological benefits of having a financial safety net are beneficial as well.

A Final Word

Ultimately, an individual who lives below their means is setting themselves up for success. They are also taking the necessary precautions to prevent potential bumps in the road. Living below one’s means is not necessarily synonymous with a lack of fulfillment. It simply means earning more than one spends.

Avoiding debt and increasing savings are some of the two most critical element of financial success, yet so many people fail to meet them. However, a new decision can always be made. Those who are already living above their means should strive to either decrease their spending, increase their earnings, or both.

 

Authored by: Gabrielle Seunagal

7 New Ways to Pay off Your Debt Faster

Yes, you can pay off your debt faster and smarter! It might feel stifling initially, but with patience and determination you can find a way to stay above water again. Now, the very first thing a smart financial advisor will tell you is you have to create a savvy budget, and you absolutely have to stick to it. If you can’t do that you’re not going to make any kind of decent progress. We know, for those individuals who have never managed a budget well, this can definitely be a challenge. However, there are many free financial planning services which can help. Let’s go ahead and look at some other interesting ways you can pay off your debt faster and start building a strong financial foundation for yourself.

Time to Pay off Debt and Move Forward With Life

Once you can remove substantial debt from your life you’ll remove that heavy weight on your shoulders. There is no better feeling than freeing up your money. If you follow the below tips and stay determined, you’ll shed financial debt faster than you could have thought possible. The goal is to not go in debt again!

payingoffdebtincanada

Tip 1: Stop your credit card spending NOW. It’s okay to use one credit card, but you have to be able to pay it off in full the end of every month in order for it to really be beneficial. Lowering your credit card debt makes a huge impact in your financial picture.

Tip 2: When you get those work bonuses apply them to your debt before you do anything else at all. This is the smart thing to do, even if it makes you cringe inside. Think of how beneficial it is going to be when you minimize all that heavy debt on your back!

Tip 3: Keep a running tally of your daily expenses. If you find you’re visiting Starbucks to often, well cut it out! Knowing where your money is going can help you see why it is taking you longer to reduce your debt burden.

Tip 4: Focus on paying off the most expensive debt first because these are the ones that dent your credit the most. Speak to a financial adviser to know what to pay and what not to pay. Sometimes, some debt is better left alone.

Tip 5: Always pay more than the minimum balance on your bills. When you only pay the minimum you cause more fees to rack up against you–leading to a longer time to pay off debt. Think smart and pay attention.

Tip 6: Have patience and stay focused. Keep on track, and stay organized. The more organization the more likely you’ll stay on the right path.

Tip 7: Don’t store payment information online. Don’t have credit card information at your favorite retail outlets as this makes it more likely you’ll spend unwisely. The more time you have to put into a purchase the less likely you are of going through with it.

Woman Cutting Her Credit Card

All of these tips are useful, but it takes you, the individual to really stay on track and knock debt out of the ball park! Don’t give up and imagine how much better your life will be after.