3 Ways to Avoid High Student Loan Debt
Recently, economist at the Federal Reserve Bank of New York released new research based on Equifax credit report data on repayment rates of student loans. One of the most interesting pieces of information found in this report is that two-thirds of the nation’s student-loan debt is held by people over the age of 30.
In the event you have children who want to pursue a higher education degree, or you are looking to work on an extra certificate to better your career, this fact is a little nerve-racking. For this reason, we wanted to give you a few alternatives to avoid high rate student loans.
- Online Schools
You might be wondering why we are suggesting online education as an option to save money on a student loan. The answer is simple. Online degrees allow you to have more flexibility with your schedule. Thus, giving you some extra time to have a full-time job, while going to school. You can set money aside and every six months have the money to pay one or two online courses. You can also pay your courses with a low rate Credit Card and pay it monthly little-by-little. Having a job will allow you to do this comfortably. The flexibility of an online course can also help you study during the weekend. - Community College
Yes, community colleges are still good places to go to school. They are much cheaper than attending a big university. These, often offer some certificates that can help you advance your knowledge and skills on the workplace.
- Apply for Scholarships
You might be surprise at the amount of scholarships offered out there. Make sure you do your research and apply to anything and everything you can. Sometimes, your job has incentives that can give you some money for school. Sometimes your community has something to offer to go to school locally. Make sure you prepare yourself and save as much as you can.
Your education is important. Make sure you are making smart choices and don’t get stuck in high student loan debt.
Hope this helps!
How Can High Rates Affect You?
Our lives are run by loans. We have credit cards, mortgages, car loans, you name it. A big change you should be aware of this year is the rate increased made by the federal government. How can this affect you?
- Your credit card rate may go up.
Credit card rates vary between financial institutions and are determined by your credit history. An increase on the target rate may affect the time in which you finish paying off your loan.
What can you do?
Take advantage of your Cash Rewards, points, and find which credit cards benefit your spending power.
- Your mortgage payments may increase
If you have an adjustable-rate mortgage, your rate may increase. Look into the possibility of refinancing into a fixed-rate mortgage (where your rate will not change in the future.) Do not get discourage if you are thinking of buying a home soon, owning property is always a good investment. Just be conscious and do not exceed your spending limit, you never want to go house poor.
- Higher rates on savings may help you
Worrying about high rates is normal, just keep in mind high rates may positively affect your savings. However, saving returns take time to grow. Do not expect your savings account to double overnight.
Plan ahead and budget accordingly. Do not let high rates scare you. See the positive, start saving more and spending less. Treat yourself once in while, but don’t over do it. It’s all about keeping a good balance.
How Can You Pay Off Your High Debt?
High debt can make you feel stressed, worried, and a little discouraged. Just remember, where there is a will, there is a way to pay. One of our goals as a credit union is to help you become financially stable. Take a deep breath, create a timeline and think how you can reduce your spending.
Then use some of the following tips as a guidance to help you pay off your high debt.
- Get rid of high rate credit cards first
What does this mean?
Your credit card interest rate vary between financial institutions. Allowing your spending to increase unconsciously. For example let’s pretend you spend $450 in credit card A with a 29.99% interest rate; and you spend $475 with a 12% interest rate in credit card B. In time, the $450 spent in credit card A may become more expensive due to its higher interest rate. You must avoid falling into this trick.
First, go over all your credit card statements and create a list starting with your highest interest cards and ending with your lowest. By increasing the payment on your highest interest cards you are saving money and avoiding high interest charges.
TIP: Remember to continue paying the minimum amount due on the rest of your credit cards.
- Take advantage of Balance Transfer Promotions.
If you have high interest rates on another credit cards think about moving your debt to your BrightStar Credit Card—especially during our Balance Transfer Promotion period. Keep in mind you must be strict with your payments in order to take advantage of the promotional rate before it expires.
- Stop spending so much on your credit cards.
If you’re trying to pay off your high debt, credit cards are NOT your best friend. Remove all credit cards from your wallet, and start budgeting your expenses with cash. Don’t worry, this change is only temporary, only while you get more financially stable.
- Put work bonuses, or other incentives toward debt.
We get it! Taking that work bonus and using it on a nice vacation is tempting. However, sometimes we need to put temptation aside and start thinking of our financial future. If you receive a bonus for a good sale, holiday, or other use it to pay off your debt. Your wallet will thank you later.
- Sell unwanted items online.
A good way to make some extra cash is to clean your house from unwanted items. Sell those old presents collecting dust and start fattening up your wallet. After all, one man’s trash is another’s treasure.
High debt should not affect your well-being. Go on, change your habits, make some smart choices, and reward yourself in the future.
You can do it!
3 Reasons You Should Teach Your Kids How to Manage Money
The main role you have as a parent is to guide, teach, and keep your children safe. One day they will go on their own and realize the world is a tough place to live in. Everything you teach them at a young age will build a foundation for their future. Teaching them the importance of money management can help them:
- Learn the meaning of financial responsibility
You can start by giving them a small allowance for doing chores. Pick a small amount like $10 and teach them to use the money carefully and save. Little kids grasp everything quickly and teaching them how to manage money wisely is a lesson that will last a lifetime. - Use credit cards correctly
Managing credit cards can be challenging for adults. Teaching them about credit ratings and the benefits of having good credit can help them improve their financial future. - Prevent Impulse Spending
Impulse spending is a big problem in our consumer based society. Your kids are continually bombarded with advertising on TV, social media, and by walking into a store. Teaching children money management at an early age can help them understand the real value of a dollar.
As you can see, teaching your kids about money at an early age can help them improve their financial life. It is up you, as a parent, to pass these lessons along so they can build a brighter financial future.
How to Create a Simple Budget?
To spend wisely is to live more comfortably. Yes, we get it, you hate the word “budget” it is scary and at the same time overwhelming . The thought of quitting some of your spending can seem unimaginable. But, fear not, budgeting allows you to see where your money goes. Leaving you with the option to treat yourself once in while without feeling overwhelmed by debt.
How should you start?
- Calculate your income and your expenses
The first step is simple. Write down how much you make along with some prioritized spending categories. Include your rent or mortgage, utilities, food, automobile expenses, and insurance.TIP: Make sure you budget for fun. You should not spend $200 every Saturday night, but you can leave $150 aside to have some fun during the week. This way you can continue to enjoy your fancy coffee and your brunch with friends. - Set realistic goals for your budget: If you want to go on a trip to visit family during the holidays, do not wait to start saving. Create a separate Wish Account to prepare you for your vacation. This will allow you to have some self control. It will stop you from spending money on petty items and you might be able to enjoy your vacation without worrying about the bills that await home.
- Track your progress: Creating a budget is only helpful if you can commit to it. Tracking your monthly, weekly, and daily spending will allow you evaluate and reflect on your progress. Remember your spending may fluctuate according to the month and that’s Okay. Just be diligent and discipline the majority of your time.
There is no science behind budgeting, the trick is to spend less than what you make. Come on members! Have discipline, be conscious of your spending, and save money.
Good Luck!
How to Shop Wisely During the Holidays?
No matter your discipline, the holiday season is always the season of spending. You probably have trips scheduled with your family, fancy dinners to prepare for, new outfits to get, and of course, some presents to get.
So, how can you spend more wisely?
- Create a list: This might seem a little silly, but a simple list can go a long way. Write the names of everyone you’re planning on getting presents for and how much you will spend on each of them. Collect and take advantage of coupons, sales, and time. Try not to leave your holiday shopping for last minute, the earlier you go, the more sale items you will find.
- Keep in mind your Cash Reward Cards: If you’re purchasing gifts with a credit card you have to keep your rates and rewards in mind. Some cards will allow you to have a little extra spending with all the benefits they provide. Some cards will make you go over budget with all their high rates. You must be careful!
- Buy gift cards: Some people find gift cards a bit cold and impersonal. However, gift cards are ideal to save money and to give people the choice of buying exactly what they want.
- Save for the big gifts: If you’re planning on getting a 65” flat screen for your significant other, save money ahead of time. You can start by putting $20 aside every 2 weeks on a separate account, so by the time you find something you like, you won’t overspend.
Remember, your spending does not have to become a headache. So, enjoy the holidays with your family and feel thankful.