Lifestyle (Blog or Resources)

Since March, the nation has been reeling from the impact of the COVID-19 pandemic. Millions of people lost their jobs, had their hours cut, or experienced drops in their income. Many families’ finances have been significantly affected by the coronavirus outbreak and are still struggling to recover.

 

By Kat Tretina

 

As the nation starts to rebuild — and businesses begin to reopen — here are six lessons we learned during the pandemic that we should all keep in mind going forward. 

 

1. You need a larger emergency fund

Before the pandemic, many financial experts said that an emergency fund of $1,000 was sufficient for most individuals. Others said that saving three months’ worth of expenses was enough. 

 

If you followed that advice, you may have realized that the guidance left you unprepared to deal with such a serious catastrophe. If you lost your entire income overnight, you quickly exhausted your savings and were unable to pay your bills. 

 

If the pandemic drained your savings account or if you never had an emergency fund in the first place, focus on building one from scratch once you’re steadily employed again. Aim to save at least six months’ worth of living expenses. That may sound impossible right now, but the important thing is to start saving and tuck money away consistently. Over time, you can achieve your goal. 

 

2. Understand your loan protections

As we found out during the past few months, not all creditors are equal. While some creditors were willing to work with people struggling with their finances during the pandemic, others were not. 

 

Federal student loans were eligible for the CARES Act, including 0% interest and automatic payment suspensions. Unfortunately, private student loans did not qualify for those benefits. 

 

Some private student loan lenders workers with borrowers and allowed them to postpone their payments, but not all lenders were willing to do so. 

 

The experience highlights how important it is to shop around and choose a lender that offers hardship programs and forbearance options. With ELFI, you may be eligible for up to 12 months of forbearance if you experience a financial hardship, such as a job loss or medical emergency. 

 

3. Avoid the lifestyle creep

Before the pandemic hit, the economy was strong. Unemployment numbers were very low and credit was easy to get, so many people were inflating their lifestyle. Even high-earners were living paycheck to paycheck to live more lavish lifestyles than they could really afford. When things went south, people were left scrambling to make ends meet. 

 

Living well within your means protects you from a recession and a bad economy. When you spend less than you make, you have more breathing room in your budget, and can weather bad times until things improve. 

 

To avoid lifestyle inflation, create a budget and stick to it. When you get a raise, automatically deposit the difference in your paycheck into your savings account or make extra payments toward your student loans. That way, you won’t notice the extra money, but you’ll improve your net worth. Learn how to avoid the lifestyle creep here.

 

4. It’s wise to have multiple income streams

Many people lost their jobs, were furloughed, or had their hours reduced during the pandemic. With unemployment rates skyrocketing and many businesses shutting down, having multiple income streams is more important than ever. 

 

When you have more than one source of income, you’re better able to handle emergencies. Even if you lose your job, you’ll at least have some money coming in to cover your most important bills. Having a side hustle can also help diversify your skill-set, making it easier to find another full-time job later on. 

 

If you can, look for another source of income. You can pick up a side hustle, such as delivering groceries, pet-sitting, or renting out extra space. You can also offer freelancing or consulting services in your field. 

 

5. Don’t try and time the market

When the pandemic occurred, the stock market plummeted. Many people panicked and sold their investments or raided their retirement plans. It turned out to be a costly mistake, as the stock market rebounded. It’s a key lesson: Don’t try and time the market.

 

The stock market has natural ebbs and flows, and will experience sharp periods of growth and recessions. Don’t panic and sell during those declines, and don’t try to buy only when you think it’s at its lowest. 

 

Instead, keep your investments where they are, and continue making consistent contributions if you can. Over time, your money will steadily grow, and your patience will pay off. If you’re new to investing, you may want to check out these apps to get started.. 

 

6. Pay down high-interest debt

Having high-interest debt can be one of the biggest stressors when the economy is in decline. When your job is at risk and money is tight, your student loans and credit cards are the last thing you want to worry about when you need to pay rent and groceries. 

 

To eliminate that stress, focus on paying down high-interest debt when things are relatively good. By paying off your debt, you’ll save money over time, and you’ll reduce your monthly expenses.

 

If you want to accelerate your student loan repayment, consider student loan refinancing. Especially if you have private student loans, refinancing your loans can help you get a lower interest rate and save money over time.

 

Use the student loan refinance calculator to find out how much you can save over the life of your repayment term.*

 

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*Subject to credit approval. Terms and conditions apply.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

Do you have debt? If so, you are not alone. More than 74% of Americans have debt of some kind. We know how stressful dealing with debt can be. It can often feel like there is no end to debt payments in sight and can consume your thoughts more than it should. But there are healthy ways to deal with financial stress that can help you pay down debt faster. Read on for some innovative ways to curb financial stress and crush your debt.  

 

According to a Northwestern Mutual 2020 Planning & Progress Study, the average debt for Americans in 2020, just before the COVID-19 impact, was $26,621 per person carrying debt. The debt consists mainly of credit card debt and mortgages, followed by personal student loans and car loans. It should come as no surprise that millennials are feeling the strain of debt as well, with the average debt for millennials being $27,900 in 2019, excluding mortgage debt. Millennials cite credit cards and student loans as their major debt sources. Among all those with debt, 67% have a specific plan to pay it off. While that’s great, that means that three in 10 debt holders have no plan for how they’ll pay off their debt. A plan is a great way to feel more in control and stress less about your debt. With a little bit of strategic planning, it can also help you pay down your debt faster.

 

Healthy Ways to Deal With Financial Stress

If you have been reading about debt tackling strategies, you have probably heard of the debt snowball and debt avalanche methods. Those are great strategies, but if you are looking for new and creative (and possibly even fun) ways to deal with financial stress here are some ideas to try out: 

 

Side Hustle

In 2019, 45% of Americans reported having a side hustle. A side hustle is a great way to earn extra money outside of your day job. The money earned can be extremely helpful to make extra payments on your debt and pay off your debt faster. A side hustle could be a driver for ride sharing, grocery shopping for others, selling items on eBay, tutoring, or dog walking, among many other options. Your side hustle might even be an enjoyable hobby you can start making money from like photography or writing a blog. Doing an activity you enjoy and making money on the side is sure to help ease some stress.  

 

Dollar for Dollar

For every dollar you spend on non-essential purchases, you spend the same amount on an extra debt payment. Think you want new wireless headphones? Take the same amount you will spend and make an extra debt payment. This method may also help you curb some spending on wants versus needs.  

 

Sign-Up Bonuses

Looking for a new checking or savings account? Take advantage of banks with sign-up bonuses for opening a new account and use the bonus money to fund your next financial goal. 

 

Save with Apps

If you like paying with plastic, there are some apps that you can use to help you save for specific financial goals. Some will round up your purchase price to the nearest dollar and deposit the difference into a savings account, one example is the app Acorns. Another app, Qoins, will take the difference and make a debt payment on your behalf. Or use the app, Digit, that will monitor your income and spending habits to determine if there is extra money that can be moved from your checking account into your Digit account. These little amounts can add up quickly to help you meet a savings goal. 

 

Found Money

According to a 2019 report, 92% of millennials use coupons, whether paper coupons or digital coupons on their phone or online. These coupon savings can then be turned into extra debt payments. Found a coupon that saves you $10 on a purchase you were already going to make? Put that money aside to make an extra payment on your debt. You might also find money from your credit card cash back programs. If you are not carrying any credit card debt, using credit cards to earn cash back is a great way to earn money for purchases you were already making. Instead of using the cash back on a frivolous purchase, turn it into an extra debt payment or the beginning of an emergency fund. If you are shopping online, use a cash back shopping site to earn additional money that can be turned into another debt payment.  

 

Color Away

Looking to calm your anxiety and see the light at the end of the debt tunnel? Try debt repayment coloring pages. A study in the journal Art Therapy found coloring can reduce anxiety and improve mindfulness. A debt repayment coloring sheet allows you to color a section of the page for each new debt milestone met. They can be a great visual reminder of how far you have come in your debt paying journey and great motivation to make little extra payments when you can. A quick search will show you free ready made pages to start coloring.

 

No Spend Challenge

Make a commitment to not spend any unnecessary money for a certain length of time. You could start with a couple of weeks and work your way up to a month long challenge. Set the rules of what you can spend on, but remember it’s supposed to be a challenge. For example you could decide to only spend money on rent or mortgage, utilities, transportation, and food from grocery stores. Any other expenses outside of those categories you don’t spend for two weeks. All the extra money you would normally spend on unnecessary items goes straight to debt payments, emergency fund or any other financial goal you have.   

 

If student loans are one source of financial stress, check to see if student loan refinancing is a good fit for you.* For many people, refinancing is a beneficial way to cut expenses and save in interest costs.  

 

Conclusion

Debt may be a part of your finances right now, but won’t always be. Make a plan and try to incorporate some of these methods to help make the debt payoff journey easier. Before you know it, you will have your next debt payoff milestone met and will be on your way to a debt-free life. Good luck!

 

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*Subject to credit approval. Terms and conditions apply.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

Due to the coronavirus pandemic and shelter-in-place restrictions, people are spending more time on social media than ever. 

 

By Kat Tretina

Kat Tretina is a writer based in Orlando, Florida. Her work has been featured in publications like The Huffington Post, Entrepreneur, and more. She is focused on helping people pay down their debt and boost their income.

 

While social media can be a fun way to pass the time, it can have a negative impact on your finances. According to Schwab’s 2019 Modern Wealth Index Survey, more than a third of Americans said their spending habits were influenced by images and experiences shared on social media. Regularly using social media could cause you to overspend and put your financial goals at risk. 

 

If your social media use is damaging your finances, here’s how to take back control. 

 

Signs your finances are getting derailed by social media 

Using Snapchat, Instagram, or TikTok isn’t necessarily a bad thing. It’s all about moderation. But there are some tell-tale signs that your social media use is hurting your bank account: 

 

1. Falling for FOMO

Seeing friends and old classmates’ vacation photos can give you a severe case of FOMO— fear of missing out. Those glamorous photos can cause you to want to book your own expensive trip. 

 

However, you should know that few people can really afford those exotic vacations. According to BankRate, the average person spends less than $2,000 per year on vacations. The Federal Reserve reported that 40% of Americans can’t cover a $400 emergency expense, so a pricey vacation — or even a weekend trip to the beach — is out of reach for many. 

 

While some people may save for months or years to pay for their vacations, many more turn to credit cards to finance their trips. Chasing their lifestyles could damage your bank account. 

 

2. Believing in the fantasy

With so many people posting beautiful photos of lavish purchases, it’s easy to believe that everyone is living a more luxurious life than you. But what you see on social media isn’t always real life. 

 

You have no idea how people are paying for those luxuries. They could be well off, or they could be in extraordinary debt. 

 

One well-known influencer racked up $10,000 in credit card debt to keep up her Instagram persona, filling her feed with pictures of dinners out, new outfits, and online purchases. And companies exist that allow users to hold fake private jet photo shoots. 

 

Take the photos you see with a grain of salt and don’t compare yourself to others.

 

3. Purchasing on impulse

Social media ads are incredibly targeted; they’re based on your search history and likes, so you’ll likely see ads for products that will appeal to you. In fact, a 2019 survey from VidMob found that one-third of Instagram bought an item directly from an Instagram ad.  

 

With one-click purchases and saved credit card information, it’s easy to make a purchase in an instant before you can really think it through. 

 

If you find yourself making purchases while scrolling through your social media feeds, you may be wasting money. 

 

How to stay on track

If your social media use is compromising your finances, use these five tips to get back on track: 

 

1. Limit your screen time

While it may seem difficult during shelter-in-place orders, set limits on how much time you spend on social media. You can use your phone’s screen time settings to see how much time you currently spend on your phone. Use apps like Moment, Freedom, and SelfControl to limit your social media access. 

 

2. Keep visual representations of your goals in front of you

To combat visuals of vacations and other purchases, keep visuals of your goals handy. For example, if you’re paying down student loan debt, keep a visual graph of your progress on your phone or saved to your computer desktop. 

 

(Hint: Need help paying down your debt? Consider student loan refinancing. Our customers have reported that they are saving an average of $272 every month and should see an average of $13,940 in total savings after refinancing their student loans with Education Loan Finance. You can get a rate quote without affecting your credit score.*)

 

If you plan on buying a home or a car, keep a picture of your dream purchase saved. You can also create a Pinterest vision board of what your goals are to help keep you focused. 

 

After all, taking control of your finances can help you live lavishly once your debt is repaid. 

 

3. Set a waiting period before making any purchases

Institute a waiting period before making any purchases to curb impulse buys. Make yourself wait 72 hours before making a purchase. 

 

If you see an item you want, save it. If you still want the product three days later, you can give yourself permission to buy it. 

 

You may find that you completely forget about it, or that it’s less appealing after a few days. By making yourself wait, you can ensure that your purchases are things you really want and need. 

 

4. Curate your feeds

Social media can be fun, but it can also make you feel bad about yourself and your life. To combat those problems, spend some time eliminating feeds and unfollowing accounts that make you feel inadequate, and only follow accounts that make you happy. 

 

Feeds that feature cute dogs? Follow! Home decor feeds with throw blankets and lamps that cost more than your rent? Unfollow. 

 

5. Practice gratitude

Researchers have found that focusing on things that you are thankful for is proven to make you happier. Every day or at least once a week, set aside some time to jot down things you are grateful for that happened during the week. 

 

They don’t have to be big things. Cooking an especially tasty dinner, being able to spend time binging Netflix with a friend or partner, walking your dog, or still having a paycheck during a difficult economic period are all things to be thankful for right now. 

 

By focusing on the good things that are already in your life, you’re less likely to be affected by FOMO and social media’s influence. 

 

Managing your money

Using social media can be a great way to connect with friends and family and pass the time, but it can negatively impact your finances. But by using these tips, you can combat its effects and manage your money. 

 

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*Subject to credit approval. Terms and conditions apply.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

If you have ever been tempted to get the latest phone or newest trendy clothing, you may be familiar with the feeling of needing to keep up with the Joneses. Now, some millennials are feeling the pressure to live up to a new standard. As opposed to the proverbial Joneses, it’s the HENRYs. Although HENRYs have their downfalls, just like the Joneses, with some financial tweaks you can set yourself up for a bright financial future and avoid the pitfalls of being a HENRY.  

 

By Caroline Farhat

 

What Is a HENRY?   

HENRY is an acronym that stands for “High Earner, Not Rich Yet.” First used in a Fortune magazine article in 2003, it’s a term that describes millennials who typically earn over $100,000 but feel broke. According to financial experts that help HENRYs with their financial goals, the typical HENRY is: 

• Earning more than $100,000 a year as an individual or $150,000 as a couple
• A millennial, with the average age being 32 years old 
• Working in any industry, including software engineering, digital marketing, journalism, law, medicine and finance 
• Usually living in high cost of living areas with the higher-paying jobs, like California, New York and Washington D.C., but can live anywhere 
• Saving money, but not enough. The typical HENRY may have between $15,000 and $20,000 saved. Although this may seem like a lot compared to the 58% of millennials that have a savings account balance under $5,000, based on the percentage of income earned, the savings are minimal.  

 

Problems HENRYs Face

Many millennials who are considered a HENRY feel like they are living paycheck to paycheck, however, they make it a priority to pay for expensive gym memberships and dream trips. Here are some problems HENRYs face and how to fix them: 

 

Lifestyle Creep

Lifestyle creep refers to the phenomenon in which spending on discretionary items increases when income increases. It can be dangerous to increase spending each time your income increases because it can derail future financial plans. HENRYs often give into lifestyle creep because they have the mentality that they deserve the luxuries they have become accustomed to.

 

The Fix: To fight lifestyle creep, prepare a budget with the goal of trying to save at least 10% of your income a month or 20% or more if you do not have any debt. Keep your budget the same even if your income increases and be sure to save the difference in income. If you are able to lower your expenses, save that difference too. It’s recommended that the savings go to a retirement account and building an emergency fund.  

 

 

Student Loan Debt

 

Student loan debt is a major strain for many HENRYs. According to one financial expert, 40% of her clients who are considered HENRYs have student loan debt. HENRYs owe an average of $80,000 in student loans, much higher than the average $33,000 for millennials in 2019. However, for many HENRYs, student loans helped them achieve the education they needed to obtain the high wages. The best way to deal with the student loan debt is to see if you’re missing out on ways you could be saving money on your loans and create a plan to pay them off quickly.

 

The Fix: Student loan refinancing can be extremely beneficial for many student loan borrowers.* Refinancing student loans can save you money on your monthly payment and in interest costs over the life of the loan. This will allow you to build more wealth faster and feel less strapped for cash. So how much can you save?

  

Let’s say you had $35,000 in student loan debt at 7% interest with a 10-year repayment term. By the end of your repayment term, you’d pay a total of $48,766. Interest charges would cause you to pay back $13,766 more than you originally borrowed. 

 

 If you refinanced your student loans and qualified for a 10-year loan at just 5% interest, you’d repay $44,548. Refinancing your debt would help you save $4,218. 

  

Use our student loan refinancing calculator to find out what your potential savings could look like.*

 

 

Living for the Now

 

HENRYs like to focus on the now, and although it is good to live in the present and appreciate what you have, that may not be the best mindset for your finances. HENRYs have to accept that the future will come and they have to prepare for it. But preparing for the future doesn’t mean you have to make a ton of sacrifices! It’s completely possible to enjoy worldly adventures and designer brands now and still save for the future. 

 

The Fix: Decide 2-3 future goals you’d like to achieve and examine the type of financial situation you’ll need to make them happen. Do you want to save for a down payment on a house? Plan to start a family soon? Or are you looking to retire early? Once you have your goals, set up automatic transfers to a special savings account so that you’re not tempted to touch the money.

 

Cost of Living 

HENRYs face a higher cost of living because income increases have not kept up with the rising cost of housing and medical expenses. Many also face the added stress of living in high-cost metropolitan areas.

 

The Fix: Try to cut your living expenses by choosing to live in the suburbs where housing costs may be lower. If cutting your living expenses is not an option, decide what discretionary expenses you can lower. For example, if you are used to getting takeout multiple times a week, try swapping easy home-cooked meals for at least half of the time.

 

Conclusion

If you realize you are a HENRY, this doesn’t mean financial doom for you. Making these small tweaks can help you continue to live the lifestyle you enjoy while working towards a richer future.

 

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*Subject to credit approval. Terms and conditions apply. 

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.