Creative Ways to Save Money After Graduating from College

May 8, 2016

Graduating from undergraduate, graduate, or professional school is an exciting time. There are parties, celebrations, new jobs, and more. It is hard not to enjoy this time however, there may be one thing – student loan debt. Student loan payments don’t have to be a source of trepidation. There are a variety of income-driven repayment plans for federal loans, or the ability to refinance and potentially lower interest rates and better terms. Today’s graduates are in a great position to be able to focus their energy on advancing careers and enjoying new lifestyles benefitting from flexible loan payment options that align with financial goals.

Along with Education Loan Finance’s potential to help lower the cost of your student loans through refinancing, we believe there is a simple strategy. A strategy that can significantly increase the speed at which you are able to pay off student loans — saving money! When you are able to save (or make) more money, you have the ability to apply greater payment amounts to your monthly student loan payments. Paying more than the monthly, minimum payment (without penalty) enables you to reduce the life of the loan. In addition, the overall interest that could have been accrued could be decreased. The easiest way to achieve this and begin saving money involves creating a monthly budget and adopting ways to save money.

Where to Start Cutting Your Budget

Whether you have begun to pay back your student loans or not, an easy way is to create a controlled monthly budget. It’s good practice but doing so helps ensure that money dedicated to student loan payments continues to go towards them. Keeping your weekly spending in check — through budgeting or creative money-saving strategies keeps student debt at a manageable level. If you are having trouble figuring out when and where to cut down on expenses, our list of creative, budget-friendly tips can help:

Eating Out:

Reduce your spending on take-out meals and restaurants by cooking at home more often. Meal planning is key, map out a weekly menu and purchase all of the ingredients in advance. If you choose to indulge every so often, agree to split pricier meals with a friend or family member.

Drink water:

Drink water whenever possible. Avoiding flavored drinks at restaurants, home, and everywhere in between can lead to great savings. Think of all the health benefits associated with drinking water! Not only will laying off the sugary and alcoholic drinks help your wallet, but you will also do more for your health!

Cable or Satellite Services:

Reduce or cancel your cable or satellite services. Any subscription services that have duplicate content or are not being used regularly. Instead, stream your favorite shows and movies on your phone, laptop, or tablet through cheaper-than-cable services like Netflix or Hulu. Amazon Prime is another video-streaming option, especially if you find the other benefits useful. If you still want to watch these shows and movies from a TV, consider connecting your streaming device to your TV through an HDMI cable. Another frugal entertainment option: borrow books from the library, which can often be conveniently downloaded for free to your mobile device or tablet.

Grocery and Home Shopping:

Whether you are shopping for groceries, cleaning supplies, home decor, or health and beauty supplies, there are ways to save at the register. Start with these suggestions:

Talk to a manager at your favorite grocery store. See what types of discounts they offer on a weekly basis. Teacher, veteran, senior, and student discounts are some that may be commonly offered.
Download all of your favorite stores’ apps, or opt-in for text-based discounts. There are usually some great deals associated with each.
Find out if shopping secrets exist, like these ones from Target.
Coupon-cutting has always been an effective strategy if you have time to find the deals and like to buy in bulk.
Shop on Wednesdays. Wednesdays are traditionally the one day of the week where last week’s sales overlap the new week’s sales. For accuracy, check with your preferred store(s).
See what deals exist on a store’s online site. They are frequently different than what is offered in-store. Be sure to check sites like retailmenot.comfor applicable coupon codes. Many brick and mortar stores will price-match their competitors’ print and digital ads.

Personal Grooming:

Skip any unnecessary salon or spa maintenance, or do it yourself. If there is no easy, at-home solution, consider a local beauty school. Your stylist, beautician, or technician may just be learning the trade, but they are supervised, so the results are often just as good as pricier salons and spas.

Entertainment:

There are always creative ways to have fun while on a budget. If you like to go to the movies, try to go during matinee showings, rather than prime-time showings. If you are interested in museums and galleries, try going during free entry days. Entertainment options with little to no entry fees may also include minor league baseball games, farmer’s market events, summer events in your local city center, festivals, and more. Check your local city’s event schedule for more budget-friendly events.

Clothing:

Great ways to save money on clothing include:

Buy less. Most people need to buy less clothing than they currently do anyway.
Try to create a capsule wardrobe, where you create a small, perfectly curated wardrobe.
Sell unwanted, gently used clothing on eBay, Poshmark, at stores like Plato’s Closet, or check to see if someone in your city hosts a clothing consignment sale. Garage sales are also a great option. After you are finished trying to sell any clothing items, document and donate any leftover clothing to an IRS-approved nonprofit. Make sure to get documentation of the donation if you plan to write off the charitable donation in your taxes.
Swap clothes and shoes with friends. Whether you have an upcoming special event or just want to wear something different, talk to your similarly-sized friends to see if they would be interested in swapping or lending/borrowing clothing, shoes, and accessories.

Pinterest:

No matter what you need to acquire, there is probably a way to make it, renovate it, or do-it-yourself on Pinterest — just make sure you have the know-how and supplies to complete the project cheaper than paying full retail prices. Great DIY options include household cleaning supplies, tasty food recipes, furniture renovations, home decor, sewing ideas, and so much more.

Reduce Unnecessary Spending

Small ticket items tend to be sneaky budget-busters. To see how much of your budget you are using on entertainment, coffee, and other unnecessary expenses look at your past months’ worth of spending. Decide what you can eliminate or reduce. Limiting spending will take some self-control, but with diligence and dedication, you will find that your existing income can be applied in greater quantities to student loans and other outstanding bills. The more you are able to apply to these each month, the faster they can be paid off, and the faster you can use your money for and towards things and experiences you truly desire.

Check out Our Simple Guide to Student Loan Refinancing

3 Practical Tips to Use a Raise Responsibly

1. Boost Your Retirement Savings

If your employer has a 401(k) plan, you should already be allocating 3–5% of each paycheck toward a retirement account, especially if your employer offers a 401(k) match. This means they’ll contribute as much to your savings as you do, up to a certain amount. Many employers match contributions up to 6% of your salary, and this is, literally, free money. If you contribute 3% of your $50,000 salary, that's $1,500 a year from you and $1,500 a year from your employer for retirement savings. When you get a raise, you should adjust your paycheck to dedicate a portion or the full amount of that raise to your 401(k) contributions. This is an easy way to save more without much thought or effort needed. If you do this right away, you don’t get used to the extra money, and you just continue living and paying bills as you did before the raise. If you’re young, this type of contribution can be especially rewarding because of a concept called compounding interest. This means the interest on your investment earns interest, not just the principal (or original) balance. If you invest $1,500 with a 10% interest rate, your balance would be $3,890 in 10 years. With a simple interest rate that only builds on the initial investment amount, your 10-year balance would be only $3,000.

2. Pay Off Debts

Another savvy way to use your raise is to allocate a portion or the full amount to your debts. This can be credit card debt, student loan debt, or even repaying a personal loan from mom and dad. But debt isn’t necessarily a bad thing. Certain debts like student loans carry low interest rates so when you consider how to use your raise, consider that other accounts or investments with higher interest rates might make or save you more in the long run. For example, if your student loan has an interest rate of just 8%, it makes more sense to pay off a credit card with a 24.5% interest rate or invest in a stock with a 10% return rate. >> Related: Should I Save or Pay Down Student Loan Debt?

3. Allocate the Rest to An Emergency Fund

We alluded to this before, but you don’t have to put all your extra cash in one place. If you get a 5% raise, you can direct 4% toward your student loans and put even 1% in an emergency fund. You should build the emergency fund until you have at least six months of your salary in the account to help you cover bills and general living expenses in case you find yourself suddenly out of work. If six months seems unattainable, aim for at least one or two months to give you four to eight weeks to find work. This emergency fund can also come in handy if unexpected medical bills or car repairs pop up. If you haven't been lucky enough to get a raise from your employer, or if you’re looking to boost your savings even more, you can give yourself a raise by refinancing student loans. If you meet the eligibility requirements, student loan refinancing through companies like ELFI can get you a lower interest rate*, which means you could pay less each month and, subsequently, less over the life of the loan. Use the difference between your previous and current monthly payments as a raise. Then allocate that money to your retirement funds and toward paying off debts. ELFI customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.¹ That’s a 7.4% raise, which is far above the predicted average 2020 cost-of-living raise of 1.6%. You can refinance both private and federal student loans. Deciding how to use a raise responsibility is a big decision. Hopefully, with these tips, you can find ways to use those funds in a way that will give you even more play money in the future. The average raise is 4.6%, and with a little knowledge and discipline, you can turn 4.6% into thousands of dollars if you make the right choices on how to use a raise responsibly.

*Subject to credit approval. Terms and conditions apply.

¹Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.

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.

2020-01-15

Starting a Family? Why Now’s the Time to Refinance Student Loans

By Caroline Farhat

Are you planning to start (or add to your) family? Congratulations! Children are such a special joy, and starting a family is an incredible journey. Whether you’re already expecting or are just in the planning stages, there is a good chance you’ve started crunching some numbers to see how adding a family member will affect your monthly budget. It’s no secret that kids are expensive — the U.S. Department of Agriculture reported that, on average, it would cost a middle-income family $233,610 to raise a child born in 2015 through the age of 17. If you’re currently paying off debt, the eye-popping numbers a child costs may look even more daunting. But money should absolutely not stop you from starting a family. Of course, you want to be financially responsible, but you shouldn’t feel pressured to be debt-free before starting a family. Instead, focus on the things you can do to lighten your budget and leave more room for your new bundle of joy. Here’s how refinancing student loans can help.

Why Refinancing Student Loans When Starting a Family is a Smart Move

One of the biggest worries many new parents have about starting a family is the financial unpredictability children can bring to the household budget. Medical costs, childcare, and all of the latest baby products can certainly add up. One of the best ways to combat this unpredictability is by lowering your fixed monthly costs. If you are currently paying off student loan debt, refinancing student loans is one of the smartest steps you can take to lower your monthly payment. In fact, student loan borrowers who refinance with ELFI* have reported an average savings of $309 per month1. To put that in perspective, that would get you 38 packs of 32-count diapers. Plus, the emotional benefits you can receive by throwing less money at your student loan debt and more on what is really meaningful to you can be priceless.

How To Refinance Student Loans

If you’re looking at your interest rate and are ready to refinance, you’ll be happy to know that it’s a simple process that can be done entirely online. If you refinance student loans with ELFI, the application process is 100% free, and refinancing has no origination fees or prepayment penalties. The ROI of refinancing student loans can also be quite large. Just an hour or two of work can yield you thousands of dollars in savings. Not bad, right? Here’s what to do:

Check the requirements - While student loan refinancing is a smart move for many student loan borrowers, there are a few cases where refinancing may not be the best option. For example, if you qualify for student loan forgiveness through a federal program, refinancing student loans would make you ineligible for this benefit. Review the basic criteria for student loan refinancing to make sure it’s the best fit for your particular situation. It’s important to fully understand how the Public Student Loan Forgiveness (PSLF) program works and the eligibility requirements.

Crunch the Numbers - Put your data into our student loan refinance calculator to see your potential savings. Our calculator has options for fixed and variable interests and loan terms of 5, 7, 10, 15, or even 20-year terms so you can see how your choices affect your monthly and lifetime payment*.
Get prequalified - You can get prequalified and receive personalized rates in just a few minutes without it affecting your credit score.
Gather your documents and apply - As mentioned, the application is 100% online, easy, and free. When refinancing with ELFI, you are paired with a personal loan advisor who will guide you through every step of the process. The Personal Loan Advisor who speak with at the beginning of the student loan refinancing process is the same person you’ll speak with at the end, which is nice because you won’t find yourself repeating information or prior discussions.

What to Do About Other Debt and Expenses

If you’re like many Americans, student loan debt may not be the only debt you are currently paying off. A whopping 80% of Americans are currently in debt, according to a report from The Pew Charitable Trusts. Here are a few ways you can pay off your debt more quickly or more efficiently.

Refinance Your Debt - Similar to refinancing student loans, you should look for opportunities to refinance any of your other debt. For example, if you have a mortgage, refinancing could save you thousands of dollars over the life of your loan. Auto loans can also be good candidates for refinancing.
Call Your Credit Card Companies - A reduction in the interest rates on your credit cards can make a big difference in how quickly you can pay down debt. A simple, polite phone call to your credit card companies requesting an interest rate reduction can sometimes be all that it takes. You have nothing to lose (except a few minutes), and the payoff can make a major difference in your monthly budget.
Explore Medical Debt Options - Approximately 66.5% of Americans who file for bankruptcy due so because of medical bills. There are options to get this debt under control, but it will take some leg work. NerdWallet has a number of good tips for how to negotiate down your medical debt or develop a payment plan that works for your budget.

Typically, when paying off debt, it’s wise to start with the loan with the highest interest, as that will save you the most money in the long run. Once you have reduced your interest rates as much as possible, take stock of all of your existing debt payments and their monthly costs, and develop a plan. With any of the money you saved, you can start a separate savings account for your growing family.

Children Are Priceless, So Don’t Let Debt Stop You

It may sound cliché, but there are things in life that are just priceless. For many people, the love and joy a child can bring to life are worth more than any spreadsheet will tell you. If you are currently working towards paying off debt, don’t let the goal of being debt-free trump your desire to start a family. There simply may never be a perfect time. Plus, with a little planning, it’s entirely possible to start a family and still work on your financial goals. Good luck to all of our current and future parents out there – you got this!

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions, The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change. ¹Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors. 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.

2020-01-13

Mark Your Calendar for These Important Financial Dates

It’s no secret that as you get older, life gets more complicated. Long gone are the days of simply saving spare change from your grandpa’s pockets in a ceramic piggy bank. Even that savings account you opened in high school is outdated now that your expenses have exploded beyond just food, entertainment, and a cell phone bill. As an adult, you have to consider your student loan debt, saving for retirement, and affording childcare, among an ever-growing list of other financial obligations. One way to effectively manage your money in adulthood is to be aware of important financial dates. This helps you predict and prepare for big expenses to be sure there are no surprises. It even helps you capitalize on saving opportunities. And since it’s a new year, there’s no better time to pull out your calendar and mark these noteworthy financial deadlines.

Important Financial Dates

January

Review Last Year’s Finances – Reassess your retirement funds and allocations based on how they performed last year. If you didn’t get the gains you hoped for, now may be the time to reallocate your portfolio (i.e., adjust where your money is distributed among savings accounts, stocks, bonds, etc.) Also, take this time to consider adjusting contributions toward accounts like your 401(k) if your employee matching program changed. Standardize Financial Dates – It’s hard enough remembering bills without them being due at different times throughout the month. Change payment dates to be on the same day at the end of the month, which gives you 30 days to get money in the right place. Fund Your IRA – If you have a Traditional or Roth IRA (Individual Retirement Account), you can contribute up to $6,000 a year to these accounts. January 1 is the first day of the year that you can make such contributions, and investing as much as you can, as early as you can, maximizes the number of days your money can grow. Revise Your Student Loan Debt Repayment Strategy – If you got a raise at the end of last year (or beginning of this year), be smart with that money and direct it toward your student loan debt. Even a raise of 2-3% can help you pay off loans quicker, reducing the amount of interest paid over the life of the loan.

February

Max Out 401(k) Contributions – Many people aren’t aware that as long as you haven’t hit your yearly limit, you can contribute toward your 401(k) beyond December 31. You have until Tax Day to make these tax-deductible contributions. So if you have the means, now is the time. In 2019, the limit for employee 401(k) contributions was $19,000.

March

Prepare for Tax Day – Be ready for April 15 by getting your documents and information organized in advance. Make sure you have all forms needed from your employer, investment accounts, mortgage accounts, and student loans. TurboTax has a handy guide for commonly-used IRS tax forms, including a Form 1098 that you’ll receive if you paid interest on a student loan last year.

April

File Your Taxes – April 15 is Tax Day in the U.S. For those of us with student loan debt, the interest portion of these payments is tax-deductible, up to $2,500. Maximize Health Savings Accounts – Tax Day is the last day to contribute pre-tax dollars to last year’s HSA. In 2019, individuals could contribute up to $3,500 as an individual or $7,100 as a family. Spend Down Flexible Spending Accounts – April 30 is the deadline for spending last year’s FSA funds. Remember, these are “use it or lose it” accounts and money can be applied to copays or other out-of-pocket expenses. You can even spend it on health-related items at FSAstore.com.

May

Check Your Credit – This important financial date isn’t tied to May, but it should be somewhere on your calendar every year. Your score determines your ability to improve your interest rate with student loan refinancing. A check can also let you know if any fraudulent activity—tied to your name—has occurred that might negatively impact your student loan refinancing.

June

FAFSA Application Due – June 30 is the last day to complete the Free Application for Federal Student Aid (FAFSA) for the upcoming school year. If you already have a student loan, consider student loan refinancing. By consolidating and refinancing your loans, you can make payments simpler and possibly reduce your monthly payments.

July

Refinance Student Loans – Summer is a great time to refinance student loans because you won’t be distracted by the holidays or year-end deadlines at work. When you’re ready, check your eligibility for student loan refinancing at ELFI.com.*

August

Contribute to Emergency Funds and Savings – Unless someone in your family heads back to school this fall, August is typically a sleepy month for finances. Time to double-check that you’re contributing to emergency funds and holiday savings accounts so you don’t get into financial trouble during end-of-the-year festivities.

September

Car Shop – This month is a great time to look for a new vehicle. Dealerships are in a generous mood since new models will soon start rolling into the lot, and they need to clear inventory.

October

Complete FAFSA for Next Year – October 1 is the first day to file your FAFSA for next school year. Filling out this application as soon as possible ensures you don’t miss out on available aid.

November

Open Enrollment – Employers typically hold open enrollment during this time of year. Reassess if your current plan still works for you. Also consider if it’s worth changing plans or opting out of certain coverage (like dental) to reallocate funds to debts, like student loans.

December

Review Accounts – Make sure you’re making the right moves to use your FSA money, maximize contributions to savings accounts, and even if you need to file a new W-4 to withhold more or less money from your paychecks. Withholding less can be part of a new student loan repayment strategy where you have more cash to contribute toward the loan. However, it also means you won’t get as big of a refund next tax season. Shop Around for Car Insurance – While you’ll want to update your car insurance after any major life change, such as moving or having a child, you could score additional savings depending on the time of year. In a 2014 study, December was the cheapest month to obtain car insurance, with March being the most expensive. While the jury’s still out on the exact reasoning behind the shift, market competition and the likelihood of natural disasters could be a contributing factor. Being aware of important financial dates can help you save and manage your money so you have more options down the road for student loan repayment, business opportunities, and real estate investments. If you’re ready to explore student loan refinancing, you don’t have to wait for an important financial date on the calendar. You can learn about eligibility, benefits, and more—today—at ELFI.com. This blog has been prepared for informational purposes only and does not constitute financial advice. Always consult a professional for guidance around your personal financial situation. *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.