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How to be a Financially Successful Pharmacist after Graduation

October 10, 2018

Pharmacy school teaches you most everything you need to know about being a pharmacist, but most don’t teach you about personal finance. If you’re like a lot of pharmacy grads, you’ve probably dug yourself into a bit of a hole. That’s okay. Now what you need is a plan to get back out. For some people, that’s figuring out how to get out of debt as fast as possible. For others, it’s a slow but steady plan to get there. Just as in pharmacology, what’s right for some people isn’t for others. Your plan will depend on your circumstances, but the important thing is not to let it overwhelm you. You’ve finished your educational journey, now it’s time to move on to the next chapter.

 

After graduation – set a realistic goal.

 

Getting to where you want to be financially is attainable, but you have to define what that is. Is it to be out of debt in 3 years? Refinance student loans? Save for a house? Make sure you have enough money for an emergency? Or some combination of all of those? All great and worthy goals, but if you don’t define a goal, you won’t know the things you need to do to attain it.

 

Assessing your situation.

 

Even if you know your goal, you can’t get there unless you know where you’re starting. You need to assess your debts and any assets you may have. The average pharmacy grad has nearly $160,000 in student loan debt. Quite often they also have credit card debt. If this is you, it’s okay. You may even have a car loan. You just need to know, that all debt is not equal and the best way to prioritize is to look at your interest rates to determine which ones you should try and pay down first. Consider using a debt pay down method like the debt snowball method.

 

Credit Cards

 

If you’re carrying credit card debt, that’s probably your highest priority. Typically credit card interest rates are between 15 and 20%, but they can go even higher. If you’re holding any significant balance with that kind of rate, making minimum payments will essentially have you paying the balance until the end of time. Even though your student loan balance is higher, it doesn’t make sense to pay beyond the minimum payment until your credit card debt is in control.

 

If you have multiple credit cards, figure out which one has the highest interest rate and start paying more there first. You may even be able to transfer to another lower interest card you have. Establish how much you’re going to pay over the minimum, say $500 or $1,000 and stick to it. It’s probably not wise to open a new card now, but as you pay down your cards you may notice special offers from the cards you have. You might see things like 0%APR for 12 months on balance transfers. Read the fine print, and if it’s good, do it. It can really speed up the process and save you a lot of money. If you have good credit, consider getting a Personal Loan to pay off your credit card balances. A Personal Loan will usually come with a lower interest rate than you had been paying with the credit cards.

 

Refinance your student loans from pharmacy school.

 

One of your best bets to improve your financial situation both in the short- and long-term is to refinance your student loans. Many student loans carry an interest rate around 5.8% While much lower than the average credit card, it’s a number you may be able to reduce several percentage points which can save you thousands of dollars over the life of the loan. Another thing refinancing can do is adjust your loan term. We’ll look at two general approaches that should help you decide what might work best for you.

 

Option 1: As fast as possible.

 

If you’re starting from a pretty good place financially and you’re not carrying a lot of other debt you may want to just knock out your student loans as quickly as you can. This approach would likely mean refinancing to a shorter term, say 5 years. The lower interest rate could save you money as will the shorter term, but it also means you’ll pay it off a lot sooner. This also means you might have a hefty payment every month. Though hefty, this monthly payment will knock out the balance accrued by interest faster, so you pay down more on the principal balance of the loan. This may mean a lot of scrimping and saving. Brown bag lunches and making do with what you have for now, but if you’re in a position to make it work without putting too much of a burden on yourself then this can set you up to be in a very good place financially and much faster than if you didn’t refinance.

 

Option 2: Slow and steady

 

A lot of us don’t have the luxury to do a shorter-term loan, but that doesn’t mean you still can’t take advantage of refinancing your student loan debt. It will still save you lots of money in the long run. And refinancing to say a 10-year loan can give your budget a little more breathing room. You may even be able to lower your monthly payments to give yourself a little more cash to pay off your credit cards or to save for an emergency.

 

Don’t skimp on retirement savings!

 

When you’re starting your pharmacy career it may be tempting to forego things like your 401K to have more money in your paycheck. This is a bad idea for many reasons. You want to establish your retirement savings right away. What you contribute in your 20s and 30s becomes much more valuable to you in your 40s and 50s. It’s just a habit you want to start early and not wish you had later.

 

Enjoy the ride.

 

Don’t stress over finances. Worrying will get you nowhere, but a plan can take you anywhere you want to go. Concentrate on getting your career going and stick to your financial plan and you’ll soon see the results you want.

 

Why You Should Not Put Student Loans In Deferment or Forbearance

 

 

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2020-01-09
Resolutions: How to Erase Your Student Loan Debt by 2025

By Kat Tretina

Kat Tretina is a freelance 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.

  If you’re like most college graduates, you left school with student loan debt. According to 
The Institute for College Access & Success, graduates have $29,200 in student loans, on average. Depending on your repayment term, you could be in debt for a long time. In fact, you could make payments for anywhere from 10 to 30 years.    Having such a large burden on your shoulders can cause you to put off other goals, like starting a business or buying a home. To free yourself from your student loan debt, think of repayment strategies to pay off your student loans as soon as possible.    If you’re determined to become debt-free, here’s how to pay off your student loans by 2025.   

1. Create a budget

To pay off your student loans early, you need to have a complete picture of your finances, so you know exactly how much money you have to work with. Creating a monthly budget is an essential first step.    You can use programs like Mint or You Need a Budget (YNAB) to craft a budget and track your spending. Hopefully, you make more money than you spend each month. If that’s not the case — or if money is tight— you’ll have to make some changes to your lifestyle.   

2. Cut Corners 

To free up more money for debt repayment, you’ll have to take a hard look at your expenses and make some significant cuts. These life changes are not just for recent college students or those just starting out in their careers. If you’re committed to changing your financial situation in a short amount of time, some drastic life changes may be called for. Some things to consider include: 
  • Getting a roommate: While having a roommate may not be ideal, it can be a worthwhile decision. Considering that the average one-bedroom apartment costs $1,025, getting a roommate can help you save over $500 per month. That savings could make a big dent in your student loan balance. 
  • Taking public transportation: If possible, skip buying a car and rely on buses and trains, instead. You’ll be able to save money on a car payment, insurance, and repairs for a vehicle. 
  • Moving to a cheaper area: While moving to a more affordable area isn’t feasible for everyone, it can be a great way to save money. Moving to a less trendy area or even to another state can help you drastically reduce your living expenses. 
  >> Related: U.S. Cities With the Most Student Loan Debt  
  • Cooking at home: According to the Bureau of Labor Statistics, the average American spends $3,469 per year on food consumed away from home, such as restaurants or fast food locations. If you skip eating out and brown-bag your meals, you could save thousands. 
  • Negotiating bills: You’re probably paying more than you need to for your cell phone, cable, and internet. You can use a service like Trim to negotiate your utility bills for you, reducing your monthly expenses.
 

3. Increase Your Income

Exploring ways of increasing your income isn’t just for new college graduates. Even if you’re gaining a firm foundation in your career and just want to attack your student loan debt with voracity, putting in extra work hours could accelerate your financial goals.    With a side gig, you can earn a significant amount of money. According to a BankRate survey, the average side job earns an individual $1,122 per month — which can make a big difference in knocking down your student loan debt. Here are some ideas to help you get started: 
  • Deliver groceries: If you have a car and a smartphone, you can make money delivering groceries for services like Shipt or Instacart. Depending on your location and speed, you could make up to $22 per hour. 
  • Rent out extra space: If you have a spare bedroom, closet, or empty garage, you can earn cash by renting out your extra space to locals who need to store items with Neighbor. 
  • Tutor online: If you have a computer and reliable internet, you can earn money by tutoring online. With services like Tutor.com and Chegg, you can make up to $20 per hour. 
  • Assemble furniture: If you have a knack for assembling Ikea furniture or toys, you have a lucrative side hustle. You can find clients with TaskRabbit or Takl
  • Walk dogs: If you love dogs, you can earn an hourly fee for walking them while their owners are at work. Create an account on Rover or DogVacay to get started. 
  • Work overtime: Public service officials, medical professionals, and educators can make a substantial amount of money on the side by working overtime. 
  • Offer consultation services: If you’re a savvy marketer or have a knack for e-commerce, create a side business of setting up social media accounts for local businesses. 
 

4. Research Student Loan Repayment Assistance Programs 

Depending on your major and location, you may qualify for student loan repayment assistance.    For example, highly qualified teachers who teach for at least five years at an eligible school can receive up to $17,500 in loan help through Teacher Loan Forgiveness, a federal program.    Healthcare providers in Pennsylvania can receive up to $100,000 in student loan aid through the state’s Primary Care Loan Repayment Program. In exchange, participants must agree to a service term in a high-need area.    In Florida, lawyers who work for a legal aid organization can receive up to $5,000 per year through the Loan Repayment Assistance Program   To find programs you may qualify for, check out the federal government’s list of forgiveness programs, and visit your state’s Department of Education website.   

5. Use Windfalls Strategically

Using windfalls — unexpected influxes of cash — strategically can cut off years from your loan term.   For example, the IRS reported that the average tax refund in 2019 was $2,860. To put that number in perspective, let’s say you had $30,000 in student loans with an interest rate of 5% and ten years left in your repayment term. If you made a lump sum payment of $2,860, you’d pay off your student loans 14 months early. And, you’d save $1,722 over the length of your loan.   

6. Consider Student Loan Refinancing

If you’re determined to pay off your debt as quickly as possible, student loan refinancing can be a smart strategy.    To refinance student loans, you work with a private lender like ELFI* to take out a new loan for the amount of your existing debt. The new loan has different repayment terms than the old ones. You’ll have a new interest rate, loan term, and minimum monthly payment.    If you have good credit and steady income, you could qualify for a lower interest rate and save money.    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.    ELFI’s Student Loan Refinance Calculator can help you determine how much you could save by refinancing.  

7. Avoid Lifestyle Inflation

As your career advances and you start to pay off some of your loan debt, you might be tempted to splurge on a new car, bigger apartment, or fancier electronics to reward yourself. However, try to avoid the urge. Instead, allocate any extra money you have toward your loan payments. You’ll pay off your student loans faster, so you can become debt-free and enjoy more freedom.   

The Bottom Line

While your debt may be stressful, you can conquer it by coming up with detailed student loan repayment strategies. With some sacrifice and hard work now, you can eliminate your debt years ahead of schedule.   If you decide to refinance your student loans, use ELFI’s “Find My Rate” tool to get a rate quote, without impacting your credit score.  
 

*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.

young woman budgeting by tacking spending in coffee shop
2020-01-07
Financial Goals 2020: Tracking Your Spending

This blog has been prepared for informational purposes only and does not constitute tax or financial advice. Please consult your tax advisor for guidance on your personal tax situation.

 

Whether it’s losing weight, going back to school, trying a new sport, or getting your finances in order, there’s no better month than January to refocus your body and mind. Right now, it’s a new year and a new decade so you’re not just resetting for the next 12 months, you’re kicking off the next 10 years, and the resolutions are more important than ever. If tracking your spending is at the top of your goal-setting list—especially after an indulgent holiday season—check out our budgeting tips below.

 

Budgeting Platforms

When it comes to budgeting, the tedious spreadsheets of yesterday are long gone. There are apps and online programs to make tracking your spending in 2020 a breeze. Mint is a simple (and free) budgeting planner and finance tracker that connects with your bank accounts and credit cards to help you see all account activity in one place. You can access Mint with your computer or phone to:

  • See spending across categories (like shopping, gas, eating out, etc.)
  • Create realistic budgets based on past spending habits
  • Set reminders for bills
  • Check your credit score
  • And more

While Mint is more of a look back at your past spending, you can also try more forward-thinking but paid-for budget tools like YNAB (You Need A Budget). Like Mint, this platform seamlessly connects to your accounts to help you see spending trends and automate budgeting, but it’s also more educational. To help you track your spending, YNAB focuses on four rules of budgeting:

  • Give Every Dollar A Job – don’t buy on a whim, be sure every dollar is assigned a task, whether it’s for eating out or paying student loans.
  • Embrace Your True Expenses – each month, set aside money for those big, inevitable expenses like car repairs and the holidays. Then you aren’t in a bind when they hit.
  • Roll With The Punches – if you splurge, avoid being riddled with guilt by simply reallocating funds from another category. Do it, and move on.
  • Age Your Money – Never spend money that’s less than 30 days old (i.e., you should be paying this month’s bills with last month’s paycheck)
 

What Refinancing Student Loans Does For Your Budget

Regardless of which platform you chose, it’s important to see spending in categories to help you understand where the majority of your paycheck goes. If you’re a recent college graduate or parent of a graduate, student loans can be one of the biggest categories in your budget. Refinancing student loans can give you a lower monthly payment, freeing up money for other categories. This helps you uphold the “Roll With The Punches” rule of reallocating money from one category to the other when “Whoops!” moments happen with your spending.

 

ELFI customers have 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 big chunk of change that can be added to one spending category or divided up among several, all while still making payments on your student loan debt.

 

On the other hand, if you finalize your 2020 budget and realize you have extra money in other categories, you can choose to pay down your student loan debt by making additional or larger monthly payments. This concept of overpaying can cut your loan repayment time in half.

 

>> Related: Should I Save or Pay Down Student Loan Debt

 

If you’re thinking about refinancing student loans to help with your 2020 budgeting, check out our Student Loan Refinance Calculator to see just how much you could save by working with ELFI. You can also review the benefits of student loan refinancing on to see how ELFI can work for you.*

 
 

*Subject to credit approval. Terms and conditions apply.

 

1 Average 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.

2020-01-02
Should I Save or Pay Down Student Loan Debt?

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.

  Whether it comes as a check from grandma, a bonus from work, or a tax return, extra money in your bank account is a great feeling. However, it can be surprisingly difficult to decide what to do with that extra cash. You’d be tempted to spend the cash frivolously, like booking a much-needed vacation or splurging on eating out. But if you’re in debt, you know that money belongs elsewhere. The only question you should face when you come into a windfall is whether to contribute to savings or pay extra on your student loan debt. Luckily, that question is relatively easy to answer.  

Save First. Pay Student Loan Debt Second.

Saving money—to a point—is necessary to ensure you’re prepared for unexpected financial emergencies. Car accident? Broken bone? Laid off? You need a “rainy day fund” so you can pay the bills when life challenges you without warning. By not saving, you could end up living on credit cards with interest rates that are likely two or three times higher than your student loan debt. Then you’re burdened with even steeper financial obligations to pay off.     It’s recommended that you
save at least six months of your current salary to be fully prepared for emergencies. Once you get your savings stockpiled, turn your attention to paying down student loan debt.   To explore why this is the case, consider savings accounts usually offer rates around 2%. However, your student loan debt likely comes with an interest rate of around 4%-7% interest if you have loans through the federal government. If you keep depositing money in your savings account instead of reducing your loan balance, you accumulate more debt (in interest owed) than you save.     Basic savings accounts are fairly safe—your balance only grows, as long as you don’t withdraw money from the account. The payoff for this safety is a lower interest rate. Low risk equals low reward.    So, you might be thinking, “What saving options make me more money?”    Related: Yes, You Need A Side Hustle  

Are Stocks worth the investment?

Stocks are a popular option that is high risk and high reward. When you buy stock in a company, you own a piece of that company. The benefit for them is that your money is an investment in developing new products and other growth-based projects. The benefit for you is that your money could grow with the company. The downfall, however, is that your money can be depleted if the company’s stock takes a downturn.    Stocks can also be an intimidating game since companies like Alphabet (Google) and Amazon generally sell for more than $1,000 a share. However, some companies like Robinhood are trying to make stocks more accessible to the everyday investor, highlighted with their soon to be released fractional share trading options. With the new feature, you can buy one-millionth of a share or just $1 worth of any stock.  

Could I place savings in a CD?

A more middle-of-the-road option is a CD. Not to be confused with a compact disc, these Certificates of Deposit are savings accounts that are typically federally-insured and usually have higher interest rates than traditional savings accounts. The beauty of placing your money in a CD is that it becomes harder to spend your money frivolously since there are predetermined dates for withdrawal. Common terms are 3, 6, 12, and 18-months, with penalties assessed if money is withdrawn before the maturity date.   

Ready to Save But Short On Funds?

Saving and paying off debt is great...when you have the extra cash to do so. But not everyone has a wealthy grandma or job that comes with a bonus. Here are some quick ways to save.   Student loan refinancing through companies like ELFI* could free up more money by lowering your monthly payment through loan consolidation and a lower interest rate. In fact, 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.   Related: 7 Benefits of Refinancing Student Loans   You could also save hundreds of dollars a month after canceling unused subscriptions. Banks or apps like Truebill and Trim can help you find and cancel subscriptions that are unused or that you forgot you signed up for in the first place. These apps also connect to your bank account to make automated weekly money transfers into a savings account. With automated transfers, think small—just $25 a week can turn into $1,300 a year.   Apps like Acorns can make your investments even more simple by setting aside leftover change from purchases you make. With the Acorns debit card, the spare change from each purchase is placed in an investment account of your choosing. And when you shop via the Acorns app or Chrome Extension at 350+ retail partners, a percentage of your total purchase is deposited into your selected savings account.    At ELFI, we work hard to help you reduce student loan debt with great student loan refinancing options. By refinancing student loans with ELFI, you can pick the payment plan and terms that fit your life. See what you could save with our quick, no-obligation quote.  
  *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 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.