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Financial tips for college fresh grads

Jacob — Wed, 30 Mar 2011 20:41:06 +0000

If you’re graduating in a few months, you got to prepare yourself soon. You’ll be pressured to have a job and, of course, earn money on your own. Here are some finance tips for the fresh college grads:

If your student loan confuses you, now is the time to figure it out.

It’s time to not only familiarize yourself with the details, but also to understand every bit of information regarding your loan. This might help you pay it off as soon as possible.

Start saving for the short term.

If you have plans on living independently, you must have the means to support yourself – to pay for an apartment, to buy food, to have money while looking for employment.

Start saving for the long term.

Invest in your future. It pays to have something reserved for the rainy days. And if you’re lucky enough to keep a large amount of your saving, at least you’ll have head start on your retirement fund.

Decide whether you really need a car.

If you have plans on moving to a place like Los Angeles, you’ll definitely need a car to move around. But remember that car payments and gas can really be expensive for fresh grads. Instead, you can consider cities and other places with good public transportation systems.

Ask about benefits.

Once you land a job, ask about health insurance, dental insurance, vision insurance, employer-matched retirement plans and other subsidies. These things are as important as your paycheck.

Figure out a budget.

There’s nothing wrong with dreaming – just know how to temper your expectations. It might help to take the time to research and compute the cost of living in different areas where you want to live and the expenses needed to keep a particular lifestyle.

Life after college is tough. It’s full of uncertainties. The last thing that you want to do is to cry and run home to mommy for the financial failures that you should’ve preempted.

http://financialedge.investopedia.com/financial-edge/0311/7-Personal-Finance-Tips-For-College-Grads.aspx

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Student loans are for student expenses

Jacob — Wed, 04 Aug 2010 09:43:01 +0000

Here’s one pitfall that many college students stumble into – spending their college loan on so many other things other than student expenses.

Student loans are supposed to cover the skyrocketing costs of tuition but the draw of the frat party lifestyle is so much of a draw that spending the loan other than enrollment’s pretty easy to do.

How many graduates (and dropouts) end up paying tens of thousands of dollars for loans that they took to earn a college degree? And how much of that’s really spent on education of the formal and academic kind?

The key thing here is to make sure that whatever loan you take out, you spend on its real purpose. Student loans are supposed to be spent on school expenses and not accessories or booze.

Now one other side to this is that some of those who do work part-time spend the money they earn to fund their lifestyle which isn’t really smart.

If you can earn something extra, better save it and make payments on the loan. Getting rid of the loan as quick as you can saves you on compounded interest down the line.

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Fresh graduates: Pay off your student debt

Jacob — Mon, 10 May 2010 01:59:11 +0000

A lot of students are now graduating college and ready to take on the big leap to “real life.” Thing is, that college degree might have been obtained through a lot of hard work and perhaps a student loan.

One thing you really have to prioritize now, aside from landing a decent job, is to pay off that student loan. Try to make prepayments. Sure, the job market’s hasn’t really recovered yet but it’s better to get out of debt real quick than lose more money in the long run.

Simple math would show that you stand to lose more by opting for longer terms. A $10,000 loan at 5% fixed interest for a 5-year term means that you have to pay $189 a month to pay it off. You spend $1,340 on interest. If you opt to pay $250 a month, in just 44 months you’ve paid it off and you save $340 on interest.

Laws have it that you can make advance payments to get rid of the load quicker. Payments are also tax deductible so that’s another load off your back.

However, make sure that you shore up your emergency funds first before making any big financial moves. If possible continue contributing to your 401(k) and retirement funds as well. You might have to sacrifice a lot of other comforts but doing all of these should safeguard you from the rainiest of days.

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Are college loans worth it?

Jacob — Tue, 09 Mar 2010 00:15:28 +0000

If it means earning a million more in a lifetime than non-college grads, many would say that it is definitely worth it. But is it really worth the years that you can be in debt if ever you even graduate?

My position regarding college loans isn’t really that firm, really. Every person’s case and circumstance is different from the other but debt is one of the financial killers out there and it doesn’t really make sense to place yourself tens of thousands of dollar in debt even before you earn your first real paycheck.

The recession has even made it more complex since the amount of job losses and unemployed made it even more tricky. A great number of borrowers find themselves still without jobs after graduation. With loans unpaid, they’re sinking into a deeper hole.

1. You don’t really need college to succeed… In my book, no amount of classroom learning can ever swap for life smarts and determination. I think we’ve already got too many Bill Gateses and Steve Jobses who can attest that a college degree is necessary to earn the big bucks.

2. …But learning it helps. Still, I have to press on the issue. You can’t mess with the statistics that tell you that college degree holders get more over a lifetime of earning than high school graduate counterparts.

3.Go for affordable education. If going to a more expensive college is not an option given your finances, then opt for a more affordable one. You can go to a state college or university. Or if even that will be a strain, then go to a community college.

4. Time things properly. You can always get better education anytime. You can opt for a BA degree now from a cheaper institution and take additional classes to supplement your learning with things relevant to your work. Drowning yourself in debt and interest for years after you graduate doesn’t really seem to be a sensible thing to do nowadays.

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