ELFI wishes for the safety of all individuals in areas impacted by the natural disasters in the United States. If you've been affected, assistance may be available to you. Contact your loan servicer for more information.
AES: 1-866-763-6349 | MOHELA: 855-282-4269
×
TAGS
Lifestyle
Personal Finance

Stop the Trend Spending

November 28, 2018

From hoverboards and iPods to boy bands, trends will come, and they will undoubtedly go. Anyone who has experienced and come through the other side of a trend can look back and laugh, but we aren’t sure about their wallets. At Education Loan Finance, we refer to spending on the latest “it” items as “trend spending”. Always following the latest trends can wreak havoc on your personal finances.  We are not saying don’t do anything trendy and live under a rock. What we are saying is that rewarding yourself for making good decisions is important, but evaluate that choice carefully. Let’s take a look at the latest trend spending taking place, how much money is actually being spent and how it could add up over time.

 

Vaping

We’ve all been there, walking or driving along when you see the occasional cloud of vape on the sidewalk. If you’re lucky, that cloud of vape isn’t directly in front of you while you’re walking and you’re able to dodge that second-hand vape cloud. In addition to the envied clouds vaping creates, the flavors can range from cereal flavors to candy flavors.  Just like the flavors, the mods come in a variety of sizes too, from huge mod kits that make tons of vapor to tiny USB chargeable vapes like the JUUL®.

 

Vaping has become one of the biggest trends in the U.S. The more vapor you can produce the “cooler” you are according to the vaping community. According to a CDC report released in October 2018, JUUL Labs® account for nearly one in three e-cigarette sales, nationally. While vaping might be the latest trend, remember that its long-term health effects are still unknown. Couple the possible health effects with the cost and you might just convince yourself to stop.

 

JUUL® Starter Kit – $45

Four pack of pods $16.

Let’s assume those are purchased twice a month, so that is 24 x $16 = $384

Total Cost of Vaping for a Year= $429 

 

Assuming that you bought a JUUL® unit to do your vaping and you bought a new pack of pods every two weeks or twice a month, you’d be spending $429.00 a year. Over the course of four years, that’s about $2,000! We didn’t even include any sales tax in this equation, but many states are rolling out taxes on vaping products.

 

Subscriptions

Subscriptions used to be associated with Highlights® magazine or catalogs your Grandma would receive in the mail, but the 21st century has revitalized the subscription. Now, subscriptions can get us movies, vitamins, clothes, music, even dating sites and all are currently available at our fingertips. The subscription box industry, in particular, is experiencing rapid growth. Since 2014, the subscription box industry has increased by 890% according to a 2018 report by Hitwise. Subscriptions, though convenient, can really end up costing you in the long run.

 

The danger is that once your card is on file, it’s so easy to forget about the service. Here’s a list of the most popular monthly subscription services of 2018. Let’s say, you signed up for the FabFitFun® subscription box for a year. Now, this box is sent only four times a year based on the season. The box comes with full-sized premium products. In addition to the box you receive, you get access to the FabFitFunTV which shares workouts, access to exclusive member sales, and you have access to the entire community online.  Now, that box is $50.00 per season or $200 a year.

 

Fancy “Dranks”

It’s hard for a month to pass without seeing some crazy coffee creation from your local Starbucks®. Recently, the Witch’s Brew Frappuccino outshined the previous favorite, Unicorn Frappuccino and became an Instagram® trend.  Drink trends can really spiral out of control and quickly. If you actively participate in social media by checking your Instagram® or Facebook® every once in a while, you can’t help but notice them. In some weird way, all these Frappuccino drinks and IPAs flooding your news feed put pressure on you to join in and go purchase one of these beverages.

 

This pressure to join in on the cool coffee trend can come down on your wallet like a hammer. The average cost for a latte at Starbucks® as of 2018 was $5.75 for a Grande, and that doesn’t include any fancy cake pops! If you bought yourself a latte, once a week for a year, what are you really spending?

52 weeks a year x 5.75 = $299.00 a Year! You’re paying about $300 on lattes a year. Think of how far that money could go towards your student loan debt.

 

Health Food

The latest trend in the food and beverage industry is likely to come from your favorite online health influencer. It’s also likely that drink ends in a vowel like Kombucha, Matcha, or bubble tea. These drinks have been around for decades, but lately, they are skyrocketing due to a new health movement. Kombucha and other fermented drink sales were up 35.6% in 2017 according to FoodNavigator-USA. This fancy probiotic drink can really end up costing you at $3.75 per bottle. If you’re looking to drink it once a day, it adds up to $1,368 a year in total cost on Kombucha. We aren’t saying to deprive yourself of the latest health trends, but we’re suggesting to think wisely before deciding to purchase it. Really understand how that small amount of money can add up to a lump sum that can easily be applied to debts. Maybe even try making your own Kombucha, there are tons of websites and directions available online.

 

Bubble Tea or as some may know it as pearl milk tea, boba juice, or just boba, has been in the US for years, but it’s recently gaining major trend status in 2018. There have been multiple chains arising that specialize in Bubble Tea. You may know these chains as Kung Fu Tea® or Boba Guys®.  Bubble Tea could make a great date or even a trendy place to stop with friends. It offers a nice alternative to the usual coffee or beer we’ve all grown accustomed to. We wouldn’t recommend making Bubble Tea a daily habit or even a weekly habit because like Kombucha the small amount spent could really end up adding up.  The average cost for a Bubble Tea is $3.50, and if you choose to go every day for a year, it equates to about $1,277. That is some serious money that can be used to get out of debt or start investing in retirement fund money.

 

Quick Food

Food is important because it keeps us alive, but that doesn’t mean we need to spend all of our income on it. Simple changes to your everyday life like packing lunch for work could really help you save in the long run. Eating out can be expensive, time-consuming, and even dissatisfying. Before you pick up your cell and place an online order, let’s take a look at these stats. According to the 2017 Bureau of Labor Statistics’ Consumer Expenditure Survey, Millennials ages 26-34, spent $3,416 annually on food away from home.

 

Imagine for lunch every day at work you bought a burrito from Chipotle®. Just a burrito is about $8.00. Now, our cost has no fancy drinks because we learned our lesson on trend spending on sparkling water when the office has free and classic H2O available. We’ll assume that you work five days a week and it’s typically Monday through Friday. We aren’t going to account for vacations or days off in our math. Let’s see what your yearly cost for lunch is…

 

$8 Burrito Cost x 5 days in a work week = $40 a week spent

$40 x 52 work weeks per Year = $2,080 spent a year

 

Though it’s so easy to get sucked into the trend of going out to lunch and grabbing something easy, please be cautious. Apps like UberEats®, GrubHub®, and Seamless® may seem convenient, but they can cause unnecessary costs.  Try to cut back on eating out or ordering in food. We know, easier said than done. Especially, when it comes to working all day and having to make yourself dinner when you get home.  Add to it cleaning up any dishes you may have used, and it just gets overwhelming. This doesn’t have to be an all or nothing situation though, try packing your own lunch weekly. If that seems like a lot maybe only purchase lunch on Fridays. These small life changes could have an impact on your finances, and they are just creating good spending habits as you move further on into adulthood. Just remember that the amount of money spent on food could pay off student loans, or be added to the down payment on a house.

 

Give & Take

Whether you are trying to get out of debt or save up money to achieve a financial goal, there is always a little give and take. You deserve to enjoy yourself and treat yourself every once in a while with the latest trend, but don’t get so caught up in the trend spend™ craze that you lose any sense of the amount you’re spending.  Trends may be great – I mean, after all, they did become a trend, but you need to stay focused. If you are finding it difficult to stay focused on your financial goal, try making a compromise of the situation. It will always help to remind you that it’s just that, a trend. Trends will come, and they will go, but your finances will be with you forever. Be the financially responsible you that we know you can be!

 

Avoid These 7 Money Mistakes

 

 

NOTICE: Third Party Web Sites
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.

Leave a Reply

Your email address will not be published. Required fields are marked *

Woman getting her finances in order
2020-09-10
Using the COVID-19 Pandemic to Get Your Finances in Order

This has been a challenging year in many ways. Despite the challenges, however, many people are doing their best to make the most of a difficult situation by accomplishing goals during their time at home.   If you have some extra downtime, this could be the perfect opportunity to work toward your financial goals! If you're ready to get your finances in order, here are a few suggestions to get you started:  

Save for an emergency fund

There’s no way to avoid all of life’s accidents, but you can be prepared for them.
Saving for an emergency fund means intentionally setting aside a percentage of your income for necessary expenses in case of unexpected expenses.   Emergency funds are meant to cover absolute must-haves, like food and housing, rather than entertainment-based expenses like vacations and dining out. While it’s fantastic to save toward those things, too, you should first set aside money for your emergency fund, then focus on secondary expenses.   It’s common to save a $1,000 emergency fund at first, then to work toward an emergency fund totaling six months’ necessity expenses. Reaching a full emergency fund is an incredible accomplishment, and also means you can breathe a sigh of relief knowing you’ll be taken care of if the unexpected happens.  

Cut back on spending

Focus on eating at home

With almost half of the United States now working from home, it’s easier than ever to avoid the drive-thru at mealtime. If you’re working from home, this is the perfect time to practice cooking your meals. To take it a step further, you could even try meal prepping!   Preparing a meal at home costs, on average, about $4. Compared to the average cost of eating out at $13 per meal, food savings top $180 weekly if you’re eating three meals per day. Cutting back on the cost of dining out is a great way to lower your regular expenses and to get your finances in order.  

Save on travel expenses

Whether or not you’re working from home, travel options are limited as a result of the COVID-19 pandemic. Consolidating your errands into one trip and limiting unnecessary miles on your car are both great ways to save a little more during this time.   If you are working from home, what a fantastic opportunity for savings! Instead of spending the money that you’re saving on work travel elsewhere, consider making progress toward a specific financial goal or even adding to your emergency fund.  

Learn a few simple home repairs

If you find yourself with a lot of time on your hands, especially time at home, why not learn a few do-it-yourself repairs? Even if you don’t need to update your home right now, you could save a significant amount in the future by knowing how to make minor adjustments yourself.   From instructions on installing a faucet to fixing a broken drawer, the Home Depot has a number of DIY home project guides on their website to get you started. Best of all, the guides are free and offer step-by-step instructions for first-time fixes.  

Use your extra time wisely

Improve your credit score

Improving your credit score is a fantastic way to get your finances in order. Even though you can’t boost your credit score overnight, you can make a few smart money moves right now that will put you on the right track.   Paying your bills on time is the most effective way to keep your credit score high. While you have a little extra time at home, look to see if your bank offers an automatic bill pay option. Automatic bill pay is a phenomenal way to set up your payment schedule, then let it take care of itself. This is especially useful for regular monthly expenses like rent, mortgage, car and utility payments.   Even if you prefer to handle your payments manually, create a payment schedule by setting reminders for important dates. With This will help you to stay on top of important expenses, and you can enjoy the benefits of having a strong credit score.  

Make some extra cash

Boredom can be a catalyst for creativity. If you like to play the piano, consider making a little extra money by teaching beginner piano lessons. If you enjoy shopping, try bringing in some side income by delivering for Instacart, DoorDash or a similar service. Now could be the perfect time to turn your hobby or favorite activity into a side business.  

What to do if you’re struggling financially during the COVID-19 pandemic

Reach out to your lenders

The COVID-19 pandemic has, unfortunately, created financial hardship for many people worldwide. The U.S. unemployment rate hit an unparalleled high of 14.7% in April, leaving many families without the financial resources for necessities like rent and groceries.   If you find yourself in a difficult financial situation resulting from COVID-19, speak with your lenders and landlords to discuss a mutually beneficial solution. Many businesses have deferred monthly payments, and the federal government has suspended interest on student loans for the remainder of the year.   We understand how difficult it can be to navigate this time. If you’re an ELFI customer in need of assistance, our expert Personal Loan Advisors are available to discuss your financial situation.  

Prioritize the necessities

If the COVID-19 pandemic has negatively impacted your financial situation, make the most of your income by temporarily limiting unnecessary spending. From eating at home when possible to enjoying free or cheap recreational activities, these short-term sacrifices may better your long-term financial health.   If you need a few ideas for a few at-home activities that are also budget-friendly, check out our list of ideas here.  

Check for forgotten expenses

If you’ve tried everything but your expenses still feel overwhelming, one way to get your finances in order is by making sure you've canceled all the monthly or automatic payments for services you no longer use.   Check your credit card bill to see if you’re making automatic payments on anything you may have forgotten. This can be everything from streaming services you no longer use to app renewals you're still being charged for. Even a few dollars each month can add up if you’re unwittingly paying for several unused services.   Additionally, take stock of your utility bills to see if your expenses have been slowly climbing. If your utility costs have grown significantly, discuss the expenses with your provider. If you can't come to a resolution, consider exploring other options to see what might be available!   Finally, student loan refinancing can be an effective way to lower the interest and extend the term on your current student loan payment. If you’d like to decrease the amount you’re paying each month, determine whether student loan refinancing might be the right fit for you.  
  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.
Woman smiling at college graduation
2020-09-08
7 Actions to Take Before Your Grace Period Ends

Congratulations! You graduated from college and have hopefully settled into the start of your career. If it has been almost 6 months since your graduation, it’s most likely your student loan grace period is nearing the end if you have federal student loans. Are you prepared for when your grace period ends? Luckily we have some actions you can take to prepare.      If you have federal student loans, there is a six month grace period before you have to begin making payments after you graduate, leave school or drop below a half-time student. Not all federal student loans have a grace period. The loans that do include: direct subsidized and direct unsubsidized. PLUS loans for graduate school have a six month deferment period after graduation where payments are not required. Some private student loans also have a grace period but it may not be six months. Be sure to check with your lender to determine if any grace period exists.   

Actions to Take

Here are a few actions you should take before your grace period ends to ensure you are prepared.  

Determine Your Debts

  First, it’s important to understand the types of student loans you have. For example, do you have private or federal loans? If you have federal student loans, you’ll need to determine whether you have subsidized or unsubsidized loans. Subsidized loans mean the U.S. Department of Education will pay the interest on the loan during the grace period for most loans. (Note: If you have a direct subsidized loan that was disbursed between July 1, 2012, and July 1, 2014, you are responsible for the interest during the grace period.) If you have a Direct Unsubsidized loan you will always be responsible for the interest, even the interest accruing during the grace period. This means that if you don’t need the grace period you may want to think about at least paying the interest on the loan.    Be sure to take stock of your other debts, such as a car loan or credit card payments, and their minimum payments.  

Make a Budget

Determine a budget that includes your new student loan payment and all other debt payments. Once you determine your budget, start following it before your grace period ends. The money budgeted for your student loan can be put aside to use as an emergency fund. Or use the money you saved during the grace period to make a principal-only payment to get ahead on your repayment.    

Set Up Auto-Pay 

Another great action to take during your grace period is setting up auto-pay through your loan servicer. Setting up auto-pay will ensure your student loan payment is always made on time. Another great benefit of using the auto-pay feature is that federal student loans are given a 0.25% interest rate reduction. Some private student loan lenders also provide a discount for auto-pay so check with your lender if any discount is available.   

Establish a Debt Repayment Plan

Your grace period is a great time to establish a student loan debt repayment plan. A debt repayment plan will help you decide exactly how you will pay off your debts. There are two main types of student loan debt repayment plans, the snowball method, and the avalanche method. You have to decide which method would work better for your financial situation and motivation. Either method will be helpful if you have multiple student loans or other debts to pay off. Once you decide on your method, you will know how to allocate any extra money you have in your budget for debt repayment. When it comes time for your grace period to end you will be more than ready to start paying down your loans efficiently!   

Research Repayment Options

  1. If you have multiple student loans you can pay each loan, keeping track of each loan individually and their due dates. 
  2. Another option is to consolidate your federal loans into one loan. The average interest rate of the consolidated loans becomes the fixed interest rate on the new consolidated loan. This is consolidating your federal loans into a Direct Consolidation Loan through the U.S. Department of Education.  
  3. Refinance student loans. Once you start getting your finances in order you may realize your student loan payment is not going to fit in your budget or has a much higher interest rate then what is available now. That’s where refinancing your student loans can help. Refinancing your student loans means you will borrow a new private student loan to pay off any previous student loans (including federal and other private student loans). Refinancing can save you money because interest rates can be much lower than for federal loans. A lower interest rate means you are saving money in interest costs monthly and over the life of the loan. To find out how much you could save use our Student Loan Refinance Calculator.*
 

Learn About Borrower Protections and Programs

When you have federal student loans you are provided benefits that are not always provided by private student loan lenders. The grace period of your loans is a good time to find out about any federal borrower protections you may want to use in the future, such as deferment and forbearance for your loans. Also, if you work for a non-profit or government agency, your loans may qualify for forgiveness under the Public Service Loan Forgiveness (PSLF) program. During the grace period, it is helpful to learn about the requirements for the program so when your payments begin you can be sure they qualify under the specific rules of the program.    

Learn About the Repayment Plans

If you are shocked by what your monthly payment will be on the standard repayment plan, check into the other student loan repayment plans provided for by the U.S. Department of Education. Certain loans are eligible for an Income-Driven Repayment Plan, where your payment will be based on your income. Or you can elect to have your loans on the Graduated Repayment Plan that will extend your loan term to provide for a smaller monthly payment. However, keep in mind that you will end up paying more interest over the loan term.   

The Bottom Line

Taking these actions will help you be prepared for the end of your grace period. You are already a step ahead by thinking about this now. This preparation will start you off on a bright financial future knocking out your student loans. Good luck!  
  *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.
Couple focused on buying insurance
2020-09-01
The Millennial’s Guide to Buying Insurance

On average, United States citizens report a 51% discrepancy between the life insurance coverage they have and the amount their families would need in the event of a tragedy. For millennials, this number is even greater, with only 10% reporting an adequate amount of life insurance. As millennials continue to grow up and start families, it’s important to understand both how to buy insurance and why insurance is necessary to protect loved ones.  

What is Insurance?

Insurance helps alleviate the risk of serious financial hardship in case of accidents or other unexpected events. If you own a high-dollar item like a home, car, boat or piece of jewelry, your insurance policy is in place to protect your monetary investment in case it is damaged, lost or destroyed.   Some types of insurance protect people rather than possessions. Medical insurance, for example, assists with the costs of illness prevention and treatment.   While ideally, you won’t experience a major loss that would require insurance, it’s impossible to predict when accidents may happen. With that in mind, insurance helps to protect your loved ones and valuables in case something unexpected occurs. Here are a few things to consider when buying insurance.  

3 Tips for Buying Insurance

1. Know what you need.

While it’s great to buy insurance at a competitive price, it’s more important to make sure your needs are met. For example, if you own a car, you’re required by law to purchase liability insurance coverage, which assists with the cost of damaging someone else’s property. If you have an accident, insurance saves you from footing the bill entirely out-of-pocket as long as the damages are covered under your policy.   You can also choose to buy additional insurance coverage. For example, collision coverage helps pay for damages to your own vehicle after an accident. This type of coverage is sometimes optional, but when buying insurance, consider whether paying the monthly premium might be less expensive than covering your vehicle damages out-of-pocket after an accident.  

2. Compare pricing from different carriers.

After you’ve determined the types and amounts of insurance you need to buy, take the time to compare plans from multiple carriers. You can do this through independent research, but it’s often easier to work with a third-party organization like SouthEast Insurance.   SouthEast Insurance works with more than 40 insurance carriers to find the best rates on coverage. They scout the best deals on more than 20 different types of insurance, from necessities like auto and home coverage to miscellaneous policies including pet and umbrella coverage.   The company aims to find you the best coverage at the best price, whether that means bundling products together or choosing individual carriers. Because they work directly with each carrier, their quotes are real, not estimates, and are personalized to your situation. After submitting a request, it normally takes about 10 to 15 minutes to receive a quote.   If you aren’t sure how to begin researching insurance policies, working with a company like this is a great way to narrow down your options without spending hours of unnecessary time and energy. The best part is, it doesn't cost anything to receive a quote from SouthEast Insurance, and there’s no pressure to buy!  

3. Cover all your bases when buying insurance.

At the very least, it’s important to invest in the necessities: home insurance, auto insurance, life insurance and health insurance. These help to cover your most valuable assets, as well as to ensure you and your family can receive medical attention when you need it.   Beyond the basics, however, you may want to consider a variety of insurance types. If you own a vehicle other than a car, like a boat or a motorcycle, you can have it covered. If you lease a space, renters insurance protects lost or damaged items in case of an event like fire or burglary. From earthquake insurance to wedding insurance, you can protect many of your major investments with various types of coverage.   Don’t just stop at the minimum when it comes to buying insurance coverage. Make sure to research what your policy does and doesn’t cover, and invest in additional protection if your current policy doesn’t include everything you’d like to insure.   Ultimately, buying insurance is about protecting the people you care about, as well as yourself. While we can’t predict accidents, we can be prepared for them. Once you’re covered, you can rest easy knowing your and your loved ones will be shielded from many types of financial stress, and that your most important belongings are safeguarded.  

Sources:

 
  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.