Ace Your Interview: Job Interview Tips

October 23, 2020

Life after graduation is full of responsibilities, like taxes, groceries and full-time jobs, but also full of opportunities. To capture these opportunities, you need to be prepared, and the best way to do that is to make sure you give the best job interviews possible. Here are a few job interview tips to help:

Write a Top-Notch Resume

First step: get your resume into shape. Make sure you fill it with your valuable work experience and qualifications. Your goal is to showcase the most successful and productive version of yourself possible.

Volunteer work, certifications, awards, and other accomplishments can all have a place on your resume. Many people like to build from resume templates you can find online, but if you use a resume template, just be sure you’ve thoroughly checked the verbiage to make sure it doesn’t sound scripted.

Your resume should show off your unique talents and skill set, as well as any numbers or figures that back up your work.

Do the Research

One of the most important job interview tips is doing research beforehand. You want to be knowledgeable about both the job and the employer when you are being interviewed. Look at the company website to learn about company history, accomplishments, and other information. Also, take some time to read recent news about the company.

When you know what the company is looking for, you’ll be able to easily answer questions about how you will fit into the work environment.

Know the Common Questions

Many interviewers ask the same, basic questions to better understand their candidates. While some may ask curveball questions, as well, you’ll be a step ahead if you come prepared with answers to common questions.

Examples include “Tell me about yourself” and “What are your greatest strengths and weaknesses?” Even though these sound like very basic questions, it’s important to give a thoughtful answer. Take your time thinking through responses prior to the interview. Indeed has a fantastic list of 125 such questions to ensure you are never at a loss for words.

Don’t stress about knowing all the answers; just practice the ones you think are most important. Then, if they ask you something unexpected, you’ll have a few ideas to pull from.

Practice

Once your research is done, it’s time to practice. Ask a friend, parent, sibling or roommate to run through interview questions with you. Focus on answering smoothly and confidently.

In a similar vein, treat any job interview you go to as practice. If you don’t get the job, you’ve still gained valuable interview experience.

Ask Questions

One job interview tip some people don’t think about is to prepare your own questions.

A job interview isn’t just an opportunity for a prospective employer to learn about you. It’s also a chance for you to learn about them. Ask questions you really want answers to, not just questions you think will impress the interviewer. Honest questions demonstrate interest and can help you decide whether you’d like to work for the company.

Ideally, you should prepare your questions in advance. That way, you’ll be ready when the interviewer asks, “Do you have any questions for me?” If you’re at a loss for words, questions about corporate culture and growth opportunities are always good options.

Dress the Part

When dressing for a job interview, you should think about the first impression you’d like to make on your potential employer. If you aren’t sure about an outfit, err on the side of caution. It’s better to be overdressed than underdressed. When in doubt, it’s hard to go wrong with simple, business-professional clothing.

Of course, this is by no means an all-purpose interview cheat code. Different employers will expect their employees to wear different things. An interview at a bank will require far more formal dress than an interview at quick-service restaurant.

Again, though, err on the side of caution. You likely won’t be passed over for a job because you were too well dressed. To top it all off, research has shown that dressing up can significantly boost your confidence.

Follow Up

After the interview, consider sending a thank-you email to the hiring manager. Express your gratitude for the interview and impress upon them your interest in the position. Be enthusiastic. You’ve got one more chance to make a positive impression.

If you get the job, congratulations. That’s fantastic. If you don’t, don’t stress. You’ve done the best you could do, and you’ve gained valuable interview experience to boot. Sometimes it takes time to find the perfect job. With your interview experience, you’ll be all the more likely to get it. If you’re looking for a job in the medical field, check out this article on common resume mistakes for medical professionals.

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Marriage Will Affect Income-Driven Repayments

Borrowers with federal loans on an income-driven repayment plan may end up paying more every month when they get married.

These plans include:

Revised Pay As You Earn Repayment Plan (REPAYE)
Income-Based Repayment Plan (IBR)
Income-Contingent Repayment Plan (ICR)
Income-Sensitive Repayment Plan

The federal government will include your spouse's income when calculating your monthly payment. You may see a huge increase in the amount due if your spouse earns significantly more than you.

Let’s say you earn $50,000 a year and owe $80,000 in student loans with a 5.3% interest rate. If you choose an income-driven plan, your monthly payment will range between $257 and $621, depending on the specific plan you choose.

If you marry someone whose Adjusted Gross Income (AGI) is $100,000, your monthly payment under an income-driven plan would increase to between $1,024 to $1,035 a month. You could end up paying tens of thousands more over the life of the loan.

Only the REPAYE plan won’t factor in your spouse’s income, assuming you file taxes separately. However, filing taxes separately can hurt your overall bottom line because you may miss out on significant tax deductions and credits. Talk to an accountant to see which filing status is best for your financial situation.

If you earn much more than your spouse, you may see your payments decrease or only slightly increase when you get married. You can use the official federal loan simulator to see how your payments will change.

May Lose Student Loan Interest Deduction

Borrowers may be able to deduct up to $2,500 in student loan interest on their taxes, whether they itemize or take the standard deduction. But only those who earn below a certain amount are eligible for this deduction. For more information about this option, speak with your financial advisor.

In 2020, single borrowers whose Modified Adjusted Gross Income (MAGI) was $70,000 or less may be able to deduct the full $2,500. Those with a MAGI between $70,000 and $85,000 may be able to take a partial deduction. Individuals who earn more than $85,000 do not qualify for the deduction.

Married couples may be eligible for the deduction if their MAGI is less than $140,000. The deduction is reduced for couples whose MAGI is between $140,000 and $170,000, and is eliminated for those whose MAGI is more than $170,000.[1]

If you currently qualify for this deduction, you may lose that eligibility if you marry someone who pushes your income past the threshold. Also, you cannot claim this deduction at all if you file taxes separately. This is another instance where filing taxes separately may not be worth it.

Legal Responsibility

Federal student loans remain the borrower’s responsibility, even if they die or default on the loan. The government won’t request payment from a spouse for their husband or wife’s student loan balance.

Private loans are different based on state laws as far as protocols for handling the original borrower’s death. Contact a local attorney if you have questions or concerns. Borrowers who are worried about leaving their student loans behind can increase their life insurance payout to compensate.

Divorce Impacts Student Loans

In most states, you're only responsible for the loans incurred in your name, unless you’re a cosigner. But if you or your spouse take out private student loans while married, the other person may still be liable for them even if you get divorced.

A prenuptial or postnuptial agreement can sometimes work around this. Make sure to have a qualified lawyer draft one of these agreements if this is a concern.

Make Payments Easier

Most couples find that their overall living expenses decrease when they get married because there's someone to split the rent, utilities and groceries with. This can free up more money for student loans.

Married borrowers may also be less likely to miss payments or default on their loans if they lose their job, because their spouse can pick up the slack. Obviously, this only holds true if both spouses have sources of income.

Can Cause Disagreements

Statistically, money is one of the most common reasons for divorce. Conflict can easily arise if one person is bringing in $100,000 of student loan debt and the other person is debt-free. The debt-free spouse may feel burdened, while the indebted spouse may feel shame and judgment.

Before you get married, discuss how you want to handle the student loan situation. Should you keep finances separate until the borrower repays the balance, or should you combine your incomes and knock out the debt together?

Marital counseling can help both parties work through these issues before they become a major problem, and a financial planner can help couples formulate a strategy that works best for everyone.

Your Spouse Can Cosign

If you were denied a student loan refinance because of your income or credit score, you may be a better candidate with a cosigner. Most lenders consider a spouse an eligible cosigner if they have a good credit score and stable income. Refinancing your student loans to a lower interest rate can save you hundreds and thousands in interest.

Having your spouse co-sign on your refinance means they'll be legally liable if you default. This will also impact their credit score and show up on their credit report, so make sure your partner understands what they're agreeing to before cosigning on your refinance.

Refinancing your student loans involves a simple application process. Explore the ELFI website today to learn more about student loan refinancing.

2020-11-13

Can I Use Home Equity to Pay Off Student Loans

It feels great when the work you've put in pays off in multiple ways. Whether it's seeing your blood pressure drop from biking to work or getting a boost to your mood from toiling in the garden, unexpected benefits are always a welcome surprise. So if you're paying off student loans and a mortgage at the same time, you'll probably be interested to hear that you can use the home equity you've already accrued to pay off your student loans even faster. That might sound enticing, but don't start drawing up the paperwork just yet - this strategy doesn't work for everyone. Here's how to use a home equity loan to pay off your student loans, and why you might want to think twice before doing so.

How a Home Equity Loan Works

Borrowers with high interest rates on their student loans can take out a home equity loan and use the proceeds to pay off their student loan balance. A home equity loan lets homeowners withdraw extra equity from their homes to use for any reason, like remodeling the kitchen or paying for a vacation. The money is deposited as a lump sum, and borrowers start making payments on the new loan immediately. Home equity loans usually have fixed monthly payments, and the terms range from five to 15 years. Homeowners need at least 20% equity in the home to take out a home equity loan. This often excludes new borrowers who don't have enough equity yet.

Pros of Using Home Equity to Pay Off Student Loans

Here's how a home equity loan could help you save money:

Could Save on Interest

Interest rates on home equity loans are usually lower than private student loans, which means borrowers can save thousands on interest. As of November 2020, rates on private student loans ranged from 3.82% to 14.50%. Rates on home equity loans are currently between 3.890% and 9%. Let's say you owe $50,000 in student loans with a 10% interest rate and a 10-year term. If you take out a home equity loan for $50,000 with 5% interest and a 15-year term, you'll save $8,118 in total on interest. Your payments will decrease from $660.75 to $395.40 a month.

Could Decrease Your Monthly Payments

If you want more leeway in your budget, paying off your student loan payments with a home equity loan could free up the cash you need. For example, if you have five years left on your student loans and take out a 15-year home equity loan, your monthly payments will decrease. If you owe $40,000 in student loans with 10% interest and five years left, you’ll pay $534 less each month if you get a home equity loan at 5% interest and a 15-year term. You can use that extra cash flow to build up your emergency fund, save toward retirement or spend on other necessities.

Easier to Qualify for a Home Equity Loan

A home equity loan is easier to be approved for than student loan refinancing because it uses the home as collateral. On the flip side, that means you'll need to stay current on both your mortgage and home equity loan in order to avoid losing your home.

Cons of Using Home Equity to Pay Off Student Loans

Taking out a home equity loan to pay off your student loans sounds like a no-brainer, but there are some huge risks.

Can’t Deduct the Interest

Before the Tax Cuts and Jobs Act of 2017, homeowners who took out home equity loans could deduct the interest on their taxes. The TCJA changed the rules so only homeowners who use the funds to repair, remodel or add to their homes can deduct the home equity loan interest. This means there are no tax benefits to taking out a home equity loan to pay off your student loans. However, borrowers may be able to deduct student loan interest on their taxes. Married couples can only take the student loan interest deduction if they file taxes jointly and have a modified adjusted gross income (MAGI) below $140,000. Individuals may be able to deduct student loan interest if their MAGI is below $70,000. Please note, you should consult a tax advisor about your specific circumstances.

Risk of Losing Your Home

When you take out a home equity loan, the home is used as collateral for the loan. If you default on a home equity loan, the bank can repossess your house. The risks are much lower for student loans. If you default on student loans, the lender can't take away your property or rescind your degree.

Lose Student Loan Benefits

If you pay off federal student loans with a home equity loan, you lose access to federal benefits and protections. These include income-driven repayment plans, deferment and forbearance.

Could Become Underwater on Your Home

If home prices in your area drop significantly, you could end up underwater on your mortgage. This means that your home will be worth less than the remaining loan balance. Being underwater makes it impossible to refinance your mortgage or sell the house, because the sale price won't make up for the loan balance.

Will Have to Pay Closing Costs

You'll have to pay closing costs on a home equity loan, usually between 2 to 5% of the loan. In this way, a home equity loan is similar to a mortgage refinance. If your home equity loan is $25,000, for instance, you'll pay between $500 and $1,250 in closing costs. Sometimes you can roll these closing costs into the mortgage, but you'll often have to pay them upfront. Lenders don’t charge closing costs on student loan refinances.

What to Do Instead

Instead of taking out a home equity loan, you may be better off refinancing your student loans to a lower interest rate. Refinancing student loans lets you save on interest without putting your home down as collateral. To see if you qualify for student loan refinancing, contact an ELFI representative today. They can go over the steps and see if you qualify.

Looking over different types of employee benefits

2020-11-11

Navigating Insurance and Benefits as a New Employee

Starting a new job can be an exciting experience. However, after you begin, there’s a good chance you’ll be confronted with a bunch of paperwork detailing types of employee benefits and asking you to make decisions about insurance and retirement plans. Understanding job benefits is an important part of making sure that you get more from your employment. Here’s what you need to know about how to choose the right benefits for you.

Retirement Plan

The first rule of employee benefits is to sign up for the company retirement plan. Many workplaces offer a 401(k), but you might also see a 403(b) or 457(b) plan. Smaller workplaces might offer to help you contribute to an IRA. No matter what this plan is called, however, a retirement plan is one of the most important types of employee benefits because it allows you to receive a tax benefit as you save for your future. Some employers offer a matching contribution. If your company will match a portion of your contribution, it often makes sense to adjust your paycheck so you get the maximum match. For example, let’s say your company will match 100% of your contribution, up to 3% of your income. If that’s the case, you want to try to have 3% of your income withheld from your paycheck each month in order to take full advantage of this benefit. You can increase your contributions later, but if you’re just starting out, it can make sense to at least get your full match. As your finances improve, you can increase your retirement contributions or start investing in other ways.

Health Insurance

When considering the importance of employee benefits, health insurance is at the top of the list. The cost of healthcare continues to rise, and a company that provides access to less-expensive health insurance can be very valuable. Review your own health needs and situation as you look at different health plan options. When deciding how to choose the right benefits for healthcare, it has a lot to do with cost, as well as your individual needs. If you don’t have a lot of need for medications or a chronic condition that requires ongoing treatment, you might be able to get a lower-cost plan with less coverage and higher out-of-pocket requirements. On the other hand, if you have more healthcare needs, employer health insurance can help. You might need a more expensive plan, but it’s likely to be more affordable than trying to get coverage on your own.

Health Savings Accounts (HSAs)

In recent years, more companies are offering health insurance plans that come with HSAs. An HSA allows you to save for health care costs over time. You can have some of your paycheck set aside in a special account that allows your money to grow tax-free. You do have to meet certain requirements to qualify — including a plan that has a high deductible. If you can afford to pay more out of pocket due to a high deductible, one of these plans can be useful. For those who might not be able to get a high-deductible plan, a Flexible Spending Account (FSA) can be a good health-related benefit. It, too, comes with tax benefits. However, the main drawback to the FSA is that you might have to use the money or lose it, while HSA funds always roll over from year to year.

Other Insurance

Some companies also offer other insurance benefits that can be valuable as an employee.

Life insurance: If you’re looking for an affordable way to protect your income on behalf of your loved ones, life insurance can make sense. However, not everyone needs to get life insurance through work. Carefully consider your needs. There are many term life companies that offer low-cost plans that might meet your needs.
Disability insurance: Check to see if your company offers this employee benefit. If you’re hurt or have a long-standing illness, this type of insurance can help you pay your bills. This is different from Workers Compensation insurance, which covers you if your injury or illness is directly related to your job. Consider if you’ll be able to pay your bills if you’re temporarily or permanently unable to work.

Look at your own needs. In some cases, you get a certain amount of coverage for free, so take advantage of that. Then, see if you need additional coverage on top of what’s already offered for free. Compare prices to see if it makes sense to buy additional coverage.

Student Loan Benefit

An increasingly popular employer benefit is a student loan repayment benefit. While Congress has yet to provide a tax break for this type of employee benefit, it can still be valuable. If your company offers to help you pay a portion of your student loans, or offers a matching repayment option, you could end up getting rid of student debt a little bit faster. Having someone else help you pay off a portion of your student loans can be a big relief, and help you better position your finances for the future. Just make sure that you weigh your matching retirement contribution against your student loan matching repayment benefit. In many cases, it might make more sense to get your full retirement match first and then put the remaining toward taking advantage of a matching student loan repayment benefit. Run the numbers to see what makes the most sense for you, keeping in mind the power of compounding returns on investments.

Other Types of Employee Benefits

Finally, you might have access to other types of employee benefits that can be useful to you as you move forward, depending on your situation.

Child care: Some employers offer to help you pay for child care, including a special Flexible Savings Account aimed at covering daycare and preschool costs.

Health stipend: In addition to health insurance, some employers offer a stipend for gym memberships, healthy meal delivery plans and more. Check to see if you can get help with these items through an extra benefit.

Education: You might have access to tuition reimbursement for continuing education or a stipend for courses or certain books.

Financial literacy: Some employers offer access to financial planning services that can help you navigate your benefits as well as make progress in other areas of your financial life.

Speak with your human resources representative to help you with understanding job benefits, then take some time to think about your individual situation and needs so that you put together a job benefits package designed to work best for you.