One thing we all have in
common, is that for the most part, we didn’t learn about money in school.
Between paying down that college debt and simply making rent at the start of
the month, determining how and where to take control of a financial life isn’t
exactly covered in Marine Bio. And for some of us, we may still not feel in
control of our financial lives.
The following four financial
hacks will help your new graduate kickoff a lifetime of financial readiness and
help you maintain your own financial preparedness. Following my four simple
financial life changers:
- Actually read documents.
Prior
to signing any financial documents, read carefully, and importantly, be
sure that what you think is covered is actually covered. For example,
renters insurance policies do not cover floods. Floods are covered under
their own policy.
- Watch your debt -- and
avoid consolidation. Be wary of college debt consolidation
loans. A debt consolidation loan is actually a refinanced loan with an
extended repayment period, which means it will take longer to pay off your
debt, and it does not mean that your outstanding debt amount is reduced.
- Make a plan before
acting. As
life requires major purchases, always plan first. Start by considering what
your goals and priorities are.This includes paying off college loans,
saving for retirement, buying a home and taking a vacation. Write them
down, and keep it somewhere as a guide-star.
- Tackle one thing at a
time.
Keep it simple. Once you know what is the most important goal for you - do
it, but don’t overload. Take on one financial ambition at a time. Don’t
set up a retirement fund, apply for two credit cards and book a trip to
Aruba in the same day. While random bursts of energy may help you
accomplish specific projects such as writing that term paper or turning in
a report at work, it’s best to make clear, purposeful and well-informed
financial decisions, slowly.
If you are in the college
planning stages, you’re faced with the question of saving for college and
saving for retirement. It is possible to do both. Read this if you are Juggling the Costs of Retirement vs. College.
And here’s How to Invest Money for Your Kid’s College Today.
Having a qualified financial advisor can help you make more informed decisions
that will best fit into your overall financial plan.
Here’s some resources for
those who have college students in the family (or are working with clients who
have children in college):
- Your first
stop should be the careeronestop website sponsored by the
U.S. Department of Labor which allows you to search more than 8,000
scholarships, fellowships, grants, and other financial aid award
opportunities.
- Another site
that you should have on your list is College Scorecard from the U.S.
Department of Education. You can compare schools based on programs/degrees,
location, size and other factors.There are tools and resources on
understanding types of financial aid, calculating your aid, starting your
FAFSA and GI Bill Benefits.
- There’s good
news for college students and parents who plan to take out loans to help
pay for school. Interest rates on federal student loans are dropping for
the 2019-2020 academic year, the first decline in two years.See: Borrowing for College Just Got a Little Less
Expensive.
- There are also
ways to protect your investment in higher education through tuition
insurance or renters insurance. Colleges and universities may have their
own program or you may be able to add a renters policy through your own
insurance company.And be sure to check out GradGuard which works with over
300 colleges and universities (click here). Please note that I have no
relationship with Gradguard.
For those who have graduated
from college or are carrying their own college debt, you’ll need to decide how
to approach paying it off. Be sure to carefully consider all of your options
especially if you considering making any changes. Loans backed by the federal
government allow you to use income based repayment plans which can reduce your
loan payments. For more:
- Should You Pay Down Debt or Save for Retirement?
It depends on your your goals, priorities and specifics of your
situations.
- To help you
weight the option of whether to Pay Off Student Loans or Invest? 6 Questions to Help
You Decide
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- Doug Myrick
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