Whether you’re graduating from high school and thinking about taking out loans for college, graduating from college and thinking about how your debt might effect your future, or in the workforce and already paying your monthly loan payments, it’s not too late to pick up some tips about your personal finances. Washington Post columnist Michelle Singletary recently shared her top financial tips that reflect many conversations she’s had with young people about the shape of their finances.
1. Don’t listen to the collective “they.” Only you know if buying is better than renting or taking out loans is better than living with your parents through college. Debt is debt. There is no good or bad.
2. If you’re just entering college, figure out how long it is going to take you to pay back your loans before borrowing any money. Go to www.finaid.org to calculate your expenses.
3. If you’re graduating from college and didn’t figure your monthly expenses before borrowing, visit www.nslds.ed.gov to learn everything you need to know about repaying your federal loans. If you have private loans, contact the provider to make sure you know your payment plan.
4. It’s time to start budgeting. If you need help getting stared visit www.mint.com or www.smaraboutmoney.org for free financial tools.
5. Understand compound interest and everything that goes with it. For a 30-second tutorial visit www.choosetosave.org.
6. Be a lifelong financial learner. Reading the business section or subscribing to a finance magazine is a great way to stay fresh on finances.
The weeklong series, Money Counts: A Series for the Financially Young, started today on NPR with the stories of three students on the verge of graduation. Brandon Smith is leaving Columbia College with $98,000 in debt and Brittany Langmeyer is $60,000 in debt, plus an additional $50,000 her father took out on her behalf. These students are learning their financial lesson the hard way and have similar advice to students entering college.
Langmeyer says she only recently started budgeting. Until recently, she also didn’t know how many loans she even had. “And I don’t know why I never took more interest in it early on. I think it made me nervous.”
Smith has been working as a barista, cashier, a prep cook and caterer while in college to pay for some of his expenses, but everything else has been covered with federal and private loans. He says he didn’t learn much about financial skills in school, but was taught that school is a good investment. “I have no idea what the future holds,” he said. “And that’s scary.”
Like Michelle Singletary said, “don’t listen to the collective ‘they’.” Only you know what is right for you and what you are capable of paying back. Many students must take out student loans to be get the opportunity to attend college and land their dream career. Take the fear out of student loans and get financially fit before graduation day.
- College Students Navigate Financial Life – http://www.npr.org/2011/05/16/136276157/college-students-navigate-financial-life
- New Graduates Can’t Afford to Be Clueless About Their Personal Finances – http://articles.boston.com/2011-05-15/business/29546263_1_personal-finance-college-debt-graduates