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How to Build Your Child’s Credit Score When They Don’t Have One Yet

From the 2007 Housing Crisis, 2008 Stock Market Crash, and now the student debt crisis there is no surprise parents nationwide are looking to educate and protect their children on finances. Many people during these national events lacked basic financial know-how and self-discipline. Gen-Xers and millennials, starting to have children of their own, worry that a new generation could be seduced by the allure of instant gratification and the digital disconnect between earning and spending money. What as a parent can you do for a young child to teach them finances and help them learn the basics? Here are some basic tips to help your children build healthy credit and learn to use it responsibly.

 

Start With Basic Financial Life Lessons

Whether your child is 2 or 22, financial education is the key to building good credit and financial independence. Erin Lowry, business blogger and author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together, explained in a recent podcast that her parents taught her about delayed gratification early in life. “I was really encouraged from a very young age to start making money, especially if I wanted something,” Lowry said.

 

Saving for discretionary purchases is a lesson many young children can miss. A growing number of young adults also don’t have realistic expectations of their future earning power. Lowry grew up in a different reality. She explains that her first successful enterprise was at age 7, selling doughnuts at a family garage sale. Before she could feel too excited about her earnings, her father adjusted the amount she made by taking out the cost of the doughnuts and wages for her sister. He explained that the money left was her profit. “He actually took the money,” she remembers. “That is something that has stuck with me forever.”

 

It’s never too late to teach lessons like these. Resources for financial education are abundant in print and online, and parents can refer adult children to Lowry’s book and her blog, brokemillennial.com. For younger children, check out this post by Dave Baldwin, “The Five Best Apps for Teaching Kids How to Manage Their Money.”

 

Three Tips for Establishing Good Credit for Your Children

Parents with good credit and a clear vision of their children’s financial future can take these three actions to ensure a sound credit score for children reaching adulthood.

 

TIP 1: Make your child an authorized credit card user.

There is no minimum age to most credit cards, so you can add your child as an authorized user as early as you like. The best part is you do not have to give the child access to the card, just keep it in a safe place. It’s imperative that you use the credit card wisely and are able to pay the minimum monthly balance on the card. If you are unable to make payments on the card that could negatively affect your child’s credit history too. Try to only use the card for reoccurring balances like gas or food shopping.

 

When your child comes of age to have their first credit card in adulthood, they will benefit from your history of timely payments and reasonable use of credit. It will also benefit them if they need a loan to attend college and you as a parent may not need to be a cosigner.

 

TIP 2: Add a FREE credit freeze to your child’s credit report until they reach age 18.

Contact each of the three reporting agencies, Equifax, Experian, and TransUnion, to request a freeze in your child’s name. In some states, the freeze may need to be renewed every seven years. A credit freeze is fairly simple to implement and will protect your child from identity theft, which in turn will protect their credit history and credit score. You can also lift credit freezes when your child is ready to apply for credit.

 

It may seem like an extreme to put a credit freeze on your two months old credit but it will only protect them in the long run. Identity theft to children is an unfortunate reality in the United States. According to CNBC, more than 1 million minors were victims of identity theft or fraud in 2017. What may be even more surprising is that data breaches are just as much a problem for minors as for adults, if not more. According to CNBC, only 19% of adults were fraud victims compared to a staggering 39% of minors due to data breaches. This can happen to your child, but it can be prevented. You have the power to protect your children from falling victim to fraud. Not to mention a credit freeze is free thanks to recent laws passed by the federal government, so it won’t even cost you or your family a dime.

 

To learn more about protecting your child’s credit and preventing identity theft, visit the Federal Trade Commission’s Consumer Information site.

 

TIP 3: Set up a secure credit card account for your child to use.

A secure credit card is similar to an unsecured or the “normal” type of credit card. The only major difference is that a deposit is used to open a secured credit card account. The amount of secured credit card deposit is usually the credit limit of that secured credit card. Now, as long as all payments are made on time and in full at the end of the designated period you’ll receive your deposit back. Additionally, that fact that all payments were made on time and in full means that you should see that reflected in your credit report and you may even see that reflected in your credit score. If your child fails to make on-time payments or fails to pay the full amount of the card this could hurt your child’s credit instead of helping it.

 

If you choose to give your teenager a secured credit card you should be certain that you discuss the responsibilities of card with them. Make sure your child is committed to paying on time, staying within the credit limit, and using the card for only appropriate expenses you have discussed in advance. This is a great responsibility to provide a teenager because it really gives them the ability to start developing good financial habits. Whether that is putting an alert in their cell phone when the payment is due or if that is handwriting it on a calendar. Additionally, your child will have the opportunity to really learn to budget and live within their means. These are fundamental finance lessons and habits that will help to lay the groundwork of what could be a very financially responsible young person.

 

Financial Outlook

 

Regardless of what ways you choose to teach your child about credit or build their credit, know that your outlook on finances can easily become your child’s. If you find yourself scared of money, it’s likely your child will too. So often children learn relationships based on what they see their parents doing, so be sure that you’re laying the right framework for them to be successful. It doesn’t have to be an overly complex and if you aren’t sure that what you are teaching them is correct try looking locally for classes or programs. You should be able to find some financial literacy courses either online or within your local community. These can really help your child to familiarize themselves with common financial terms and create good financial habits. Good financial habits include how to save money, charitable giving, and even what taxes are.  No one knows your child better than you and no one wants them to succeed more than you, so be sure to give them the right tools and resources to do so.

 

Ask These 10 Questions When Hiring a Financial Advisor

 

 

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.

Comparing Salary to the Cost of Living

Recently, CNBC released an article discussing student loan debt in relation to locations throughout the United States. This has many questioning whether they can find a job title in their field where they want to live, that will support their current bills, payments, lifestyle, and student loans. Depending on the location and cost of living, you could be making thousands less in one location when compared to another. To add more insult you could be expected to pay off more than you are capable of based on your location. When searching for a career path, it’s vital to consider where your job title is going to be the most successful and where you can afford your current lifestyle. Here are some important factors to keep in mind when

Location Expenses

Consider the cost of living in a variety of locations.  Everyday costs like food, housing, utilities, and transportation can all vary depending on where you live in the United States. Let’s see how a location can be affected by each of these variables.

Generally, big cities are known to be more costly compared to rural areas.  The Bureau of Economic Analysis tracks price levels for food, housing and education in each state and compares them to the national level. This information can be put into a dollar value scale to simplify which states are more expensive to live in than others. For example, the value of a dollar in New York, Hawaii, and California is less than the national average dollar. Meaning your dollar bill is comparable to some cent values in other locations. In states like Kansas, Kentucky, and Ohio that are not as urbanized the dollar values higher than the national average dollar. Meaning your dollar goes a little further in these areas.

 

Housing Costs

You may be asking, “What makes big cities so pricey?” and there are actually a few different reasons. The main drive for high priced locations is housing. For cities with a high population, there needs to be an abundance of housing. A high population causes overcrowded cities to have a limited amount of space for the number of people wanting to live there.   A high housing demand creates steep prices in the market because everyone is in need of a place to live. If the city life is looking a little out of budget for you, remember living outside the city and commuting is an option, and may be more cost-effective. Aside from the costs of housing, costs like transportation, utilities, and insurance may affect the cost of living.

 

Transportation Costs

We all know how expensive a car, gas, and maintenance can be. When commuting to work or even the supermarket, the distance between point A and point B will affect the amount of money you spend. .Whereas, living in the city you may literally be paying for convenience. You may be spending $200 or more a month on a permanent parking spot for your car, in addition to spending money on transportation fees. For example, in New York you could take a bus to the subway station, costing you around $2.50. Then you commute to work on the subway, costing you another $2.75. If you do this twice a day (at least) the commute will cost $10.50. Spending $10.50 five days a week for a month will get you to a grand total of $210.00 not even considering additional outings.  Please note that these prices may not be the same for all locations. For example, the average bus fare in Los Angeles is $1.75, but in Washington DC the bus fare ranges from $2.00-$5.00 depending on the commute.

 

Utilities

Utilities will also affect the cost of living, the amount depending on where you live. The cost of utilities can vary based on government regulations. Things like how much water, electricity, and gas, you are consuming can be dependent based on the weather where you are located. If you are living in a location where the winter can get very cold, that could be making a dent in your wallet on utility bills. For example, Alaska, Connecticut, and Massachusetts have an average electric rate of $21.62 per Kwh (kilowatt hour) a month.  In a place where it is always warm like Hawaii, the air conditioning may be used more frequently and the average electric rate would be $32.40 per Kwh a month.

 

Additional utility costs may include garbage removal and sewage costs. In the United States, the average cost for garbage removal is from $12.00 -$20.00 a household. Sewage rates are usually included in water rates that can be viewed with the electricity bill and can altogether be around $50.00.  In some cases, if you are living in an apartment, utilities like garbage removal and sewage will be included in your rent, or it can be separate on your electricity bill. Talk to your landlord or call housing management to find out what is included.

 

Insurance

Besides housing, transportation, and utilities, you will have car insurance, renter’s insurance.  The average rate for car insurance in the United States is $118.63 per month but can vary based on the location you are in. For example, the average cost of auto insurance in North Carolina is $865 each year while the average cost of auto insurance in Oklahoma is $1,542 a year. T Auto insurance pricing can depend on the company you have insurance with, your age, and even your gender!  For example, some companies will have a 1% price difference between genders.

 

If you choose to live in the city, it’s likely you may find yourself renting. Renter’s insurance is an additional cost you’ll want to consider.  The average, renter’s insurance in the United State is $187 per year. Renter’s insurance can be more expensive in some areas due to population and crime. If you live in a high populated area, insurance could be priced higher because the crime risk is higher.  The insurance company takes greater measures to cover your belongings in high populated areas. Renter’s insurance in Florida has an average rate of $217 per month, while in South Dakota the average rate is $118 a month.

 

Before completely scaring you back into your parent’s house for life, there are a few resources you can use to find a job and field of your choice, in areas that could be most profitable.

 

Job Search Resources

 

SimplyHired

https://www.simplyhired.com/salaries

SimplyHired will estimate the salary your specific job will be making in different locations. All you have to do is type in the job title you are looking for, and the city and state, into the search engine. Using this tool you can find out things like a nurse can make $50,000 in Dallas, Texas but, in Indianapolis, Indiana is making closer to $40,000. Although this does not calculate the cost of living, this website pulls up jobs from all over the United States. SimplyHired gives users easy access to salary information when starting to compare careers in different regions.

 

Check Out These 3 Steps to Negotiating Salary

 

Expatistan

https://www.expatistan.com/cost-of-living/nashville

Cost of living is an important factor when searching for a location that is right for you and your preferred career. Hence why we created this helpful blog! Expatistan has a feature that pulls up a spreadsheet estimating how lifestyle choices may cost in different cities or even countries. For example, when searching in Nashville, Tennessee, Expatistan created a page that included potential prices for food, housing, clothes, transportation, personal care, and entertainment. Expatistan estimated:

 

Rent 900 Sq Foot Apartment – $1,408/month

Lunchtime Meal – $14

Sports Shoes – $98

Shampoo– $6

 

This website is a great place to find detailed estimates of what you may be spending on everyday items.  A tool like this can be very helpful when trying to manage the salary and lifestyle you are looking for.

 

CNN Money

https://money.cnn.com/calculator/pf/cost-of-living/index.html

After finding an estimated salary and cost of living for a specific location, you can compare it to other areas with CNN Money Cost of Living Calculator.  You’ll need to input

  • where you live now
  • where you are considering living
  • give an estimate of how much your salary is now (or what the salary is in the field you are searching for)

Based on the information provided, the calculator will estimate how much you would be making somewhere else. For example, if you live in Atlanta, Georgia right now and are making $50,000 a year, and you would like to move to Bozeman, Montana, the comparable salary is $50,709, which is around the same amount. Now if you moved, from Atlanta with a $50,000 salary to San Francisco, the comparable salary is $97,470. Once again, the cost of living will factor in what you can afford in each region.

 

Comparing salaries, regions, and the cost of living can help you determine where you’re aspiring jobs can be the most beneficial for your lifestyle. Consider where you will have the most financial wiggle room. Educate yourself on the cost of housing, transportation, utilities, and insurance before jumping into the car moving to a new city. Optimize your options by looking at the cost of convenience versus living outside of a location for less and other opportunities. What city you will feel the most at home in? If you are not satisfied with your options, try a different job title or location, you’re not a tree. Scope out all of your alternatives and find one that betters your lifestyle in the long run.

Top 7 Money Mistakes For Young Professionals

 

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.

 

Resources

https://www.usatoday.com/story/money/economy/2018/05/10/cost-of-living-value-of-dollar-in-every-state/34567549/

https://ask.metafilter.com/37074/Why-is-it-more-expensive-to-live-in-a-city 

https://www.priceoftravel.com/595/public-transportation-prices-in-80-worldwide-cities/

https://www.chooseenergy.com/electricity-rates-by-state/

https://www.thezebra.com/auto-insurance/average-auto-insurance/#state

https://www.valuepenguin.com/average-cost-renters-insurance#nogo

https://www.valuepenguin.com/average-cost-life-insurance#nogo

Benefits and Savings of Completing College Early

People usually think of completing college in four years as a typical timeline. In reality, many undergrads find that working in the summer or studying abroad can add extra time to getting their degree. According to the NY Times, only 19% of college graduates at public universities finish a Bachelor’s Degree in four years. Most experts use the timeline of six years to complete a Bachelor’s and three years to complete an Associate’s Degree. There’s nothing wrong with taking more time, but there are advantages to getting college completed early. Here are some reasons you may want to take an extra class each semester or stay on campus for summer classes to finish early.

 

Less time in school means less money spent on college.

Think about the extra fees you pay each semester. From parking permits, recreation center fees, and fees charged per department. The longer that you’re in school for, the more you will end up paying in fees. Taking more classes at once won’t save you on overall tuition necessarily. Taking more classes will lower the amount you’re paying for being in school, over time. Plus, tuition has the tendency to go up over time, and rarely goes down. Therefore, taking more classes now could save you on tuition in the long run since you’ll avoid rate hikes.

 

The cost of college will depend on the type of college you attend. The cost difference between public school and private schools may be surprising. When looking at the cost of public schools whether a college is in-state or out-of-state from your current residence will also play a role in the cost. We broke down the cost of college into three separate categories public in-state, public out-of-state or (public OOS) as can be seen below, and private. We calculated the costs for a 4-year completion, 5-year completion, and 6-year completion. These costs were based on averages provided by Value Penguin.

 

 

The below graph shows what the cost for 6 years of school will ultimately cost the borrower at each of these three types of colleges. The cost of a private college for six years equates to the cost of a Rolls Royce Wraith. Just to put that in perspective for you, Gwen Stefani the previous singer of the band No Doubt owns this car. It’s important to understand if something like studying abroad will set you back a semester or not. Yes, studying abroad is a great experience, but are you prepared to tackle the debt that may come along with delaying your academic career?

6-Year Costs of College

Public In-State School – $172,277.15

Public Out-Of-State School – $266,177.15

Private School – $325,937.15

 

 

The overall cost of college can seem overwhelming, but it’s important to understand what you’re spending by staying in school longer. It will help you to understand if the cost of an education is worth the field that you are studying to enter into. In addition, the college that you choose will have an impact on what you have to pay to achieve that education. For example, if it takes you five years to graduate there could be a price difference of about $128,050.00. The cost of college really is impacted by the type of school you choose in addition to the amount of time you spend there.

 

5-Year Costs of College

Public In-State School – $142,255.75

Public Out-Of-State School – $220,505.75

Private School – $270,305.75

 

It’s tough these days to graduate from college in 4 years, but it’s still doable. If you work closely with your counselor and study hard you’ll be on the right track. If you need summer classes they are typically available as well.

 

4-Year Costs of College

Public In-State School – $112,799.70

Public Out-Of-State School – $175,399.70

Private School – $215,239.70

 

If you enter college determined and know what you want to do, it will save you a decent amount of money. The difference between graduating in four and six years can be extreme in some cases. Below is an illustration of the cost difference between four and six years. Notice the cost difference specifically between a public out-of-state school and a private school.

 

Cost Difference Between 4 Years & 6 Years

Public In-State School – $59,477.45

Public Out-Of-State School – $90,777.45

Private School – $110,697.45

 

One of the most important parts of preparing for college is understanding how you will pay for it, how long you’ll be in school for, and if you can graduate early. If you have the ability to graduate early you should certainly consider it. At the same time, it’s important that you don’t overwhelm yourself.

 

Get to work, work, work, work, work.

It’s hard to apply for a job and commit to a typical work schedule when you’re still in school. If you can work throughout school and put contributions to your loans that is a great thing to do. If you can’t work at a traditional job, that’s okay too, but be sure that you are doing all the work you can to finish early. Completing your degree earlier can give you the ability to start looking for a job in your career field earlier. That extra year or two of working at a professional career job will put you at an advantage.

 

Bring home the (much better) bacon.

With your degree completed, it’s likely that you’ll qualify for higher-paying positions in your field. If you already have a job that you like and want to stay with the same company, chances are you’ll be worth more once you’ve got that degree in your hand.

 

Find more time.

When you’re done with school, you’ll have more time to work, build your resume, or balance commitments with life. Lots of students experience burnout, especially when they’re working while going to school, or taking a heavy study load. Add things like internships and clubs to that list and it just sounds overwhelming. Post-college, you will likely have more time to balance working, taking care of yourself, and pursuing other hobbies. Working full-time is still a commitment, but compared to working, taking 18 credits, and being in a student org. graduating might feel like a relief to your schedule.

 

Spend less money on college living.

It might make sense to have a meal plan or live on campus while you’re in school. Be aware those things are notoriously more expensive than how the rest of your community probably lives. By getting a shared apartment with friends or other young professionals, meal planning each week and doing your own shopping – you can usually save money.

 

Have more control over your schedule.

You know how it goes with classes. Sometimes you try to fit all of your classes into two days so you can have more free time. Try using your free time to work or study on days off. Coming across a required class that doesn’t pair with your schedule can ruin a lot of possibilities. By graduating, you’ll have fewer of those college-imposed restrictions on your time.

 

Get on with adulting!

Sure, many of us joke about the downsides of adulting, but it’s also nice to pick where you live and what you do. You can make choices like how to budget and what your financial and personal goals are. If you’re in a relationship, you can decide together what the next chapter holds or start making bigger plans together. If you’re unattached, you can go anywhere and don’t have to worry about credits transferring. The world is your oyster!

 

There are some instances where it absolutely makes sense to slow down your progress toward a degree. It’s okay if you need to take more than the typical two- or four-year (or even three- or six-year) track. Working parents or non-traditional students may find they can comfortably handle a half-time load with their other commitments. A full-time course schedule may be impossible to maintain for them. If you’re already working in a job that you like and are getting reimbursed for school, going at a slower pace could actually put you at a tax advantage. Not to mention some people take fewer classes at a time so they can pay more out of pocket and take out less in student loans. You should choose what works for you and helps you progress toward the ultimate goal of getting the education to support your dreams. Just make sure you have a plan that works for you and keeps you motivated to graduate!

 

Here’s How to Cut A Budget

 

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.

 

 

Understanding Student Loan Payments

There are many options when it comes to paying student loans, and just as many questions! Questions like what these terms and situations can mean for a borrower. If you have questions about your student loans or want to learn more about how you can manage your repayment, check out these tips on understanding student loan payments.

 

What is a student loan servicer?

 

Your student loan servicer is the company collects your payments. According to Consumer Financial Protection Bureau, they typically handle most administrative task associated with your loan. Servicers do things like, answer customer service questions and enforce regulations provided by your lender related to your loan. You pay them for your loan and they give you options for repayment and deferment. It’s likely you’ll take out a student loan with one company and end up getting a different servicer. Your servicers can change too if your loan is transferred.  If you choose to consolidate or refinance with a company that gives you lower payments, better interest, or quicker payoff you’ll probably receive a different servicer.

 

When should you start making payments?

 

Start making loan payments whenever you can. Most student loans allow a period of non-payment while you are in school, known as a grace period.  On average most student loan lenders require payments to be made when the borrower is at less than half-time status for six months. You don’t have to wait until six months after graduating to make payments, though! If you can make payments while in school, you will save on interest and cut the time it takes you to pay off your student loans.

 

What’s a student loan grace period?

 

The grace period is typically a 6 month period that occurs after graduating, dropping below half-time enrollment status, or leaving school. During the grace period, you are not required to make payments on your student loans. Grace periods will vary based on the student loan lender that you have. Know what your grace period is so you aren’t caught off guard with late payments.

 

Can I pay extra on my student loans?

 

Yes! There are no prepayment penalties for federal or private student loans. Prepayment penalties are fees charged for reducing your loan balance or paying the entire loan off early. Many other types of debt like mortgages can have a prepayment penalty. Prepayment penalties were created to limit early payment of a debt, but no need to worry about that with your student loans. Instead, pay attention to how additional payments are applied to your loan.

 

If you make payments online some loan servicers allow you either pay extra on the principal or apply the additional toward interest on the next payment. Basically, if you choose to pay over the minimum depending on who your lender is, you may need to specify the amount that is a prepayment. Prepayments on your loans go towards the principal balance.  You should aim to make prepayments sometimes referred to as overpayments because it lowers the total amount of the loan. When the principal balance decreases it reduces the amount of interest you’ll pay in the long term. The next monthly payment will usually remain the same. Since you’re not applying additional money toward your next payment if you choose this option.

 

Check Out This Prepayment Calculator

 

Not all loan servicers will direct prepayments towards the principal of your loan unless specified by the borrower. Some lenders will count the prepayment as a payment towards your next monthly payment.  That can make it seem like your extra payments are hardly affecting your balances at all.

 

Instead, try to direct additional payments toward one loan’s principal. For example, if you have several loans through the same servicer, but one is $1,000, you can pay that off within a year. If you pay an extra $100 per month on that one $1,000 loan principal- it will be gone faster! If you’re not allocating prepayments strategically, you won’t see this same kind of progress.

 

What if I can’t pay my student loans?

 

There are limited options available when you can’t pay student loans. Weigh your options carefully. When making student loan decisions make sure you’re not adding stress to your future. First, contact your servicer immediately. You’ll have more flexibility if you stay on top of repayment before you start making late payments or missing payments. Avoid missing or late payments at all costs! Not only will late or missed payments damage your credit they put you at risk for extra fees. In addition to damaging your credit, risking additional fees, you could lose benefits available to only those who pay on time.

 

Repayment Options (Not a Long Term Solution)

Look at repayment options. If you can’t pay with the plan you’re currently on there may be a better repayment option. If you are able to select another repayment option that lowers your payment you will want to consider doing so temporarily.  Doing this quickly will avoid you being late on future payments. It’s important to note that repayment plans are not a long-term solution to paying back student loan debt. We wouldn’t recommend for the long term because in more income contingent repayment plans the monthly payment isn’t covering the interest that is accruing during that period. Therefore, you can make a payment every month but the overall loan balance remains the same or could even increase!

 

Consolidating Student Loans

If you’re in good standing on your loans, but want to reduce your payments student loan consolidation might be a good idea. Consolidation can make it easier for you to manage paying all of your loans, open you up to other repayment options, and reduce fees. It’s not a sure thing, but it doesn’t hurt to investigate this option and see if it is right for you.

 

Deferment or Forbearance: Use with caution!

The last options to consider are deferment or forbearance. If you can avoid these options like changing repayment or consolidating, do it! Usually, borrowers have to be in financial hardship to qualify for deferment or forbearance. That doesn’t mean you’re off the hook because you’re in a tough financial spot. Depending on the loan you have, your interest might be added to the principal balance. This is really not ideal because it means your balances will grow. When you start paying again, your balances will be higher than where they are today. This is called capitalized interest—it equates to paying “interest on interest” and can get out of control fast if you use deferment or forbearance for longer-term hardship.

 

Most people don’t qualify for loan forgiveness because they are having a hard time paying their loans, but be aware that is possible. If you have developed a disability that precludes you from using your education or went to a school that has since shut down you might be eligible for forgiveness. Don’t count on this as an option, and don’t delay if you can’t pay your loans. Start investigating what’s available to you as soon as possible.

 

What are income-based repayment options for student loans?

 

Private loans may have options available that will lower your payments if you have a lower income, but the standard income-driven repayment plans apply to federal loans. Your monthly loan payment is calculated on your income. Your income is based on some stipulations and it may be taken into account things like your family size.

 

Income-Based Repayment

The standard income-based repayment plan adjusts your payment if your loan payments are more than 10% of your discretionary income. Based on when you took out your loans, there may be other benefits or stipulations to meet in order to qualify. Regardless, you’ll have to calculate your loan payments based on your income and family size through your servicer.

 

Income-Contingent Repayment

This type of repayment limits payments to 20% of discretionary income. The income will be based on income and family size. It is the only option available to Parent PLUS loan borrowers and requires PLUS borrowers to consolidate their loans to qualify.

 

Pay As You Earn and Revised Pay As You Earn

There are limits on which form of this repayment plan you can qualify for. These qualifications are based on when you took out your loans. On the Pay, As You Earn plan you’ll have payments that correlate to 10% of discretionary income. The payment will be based on how much money you’re making and limiting the term of the loan to 20–25 years depending on whether you were a graduate or undergraduate borrower.

 

Learn More About Parent Loan Refinancing

 

 

How does refinancing change my student loan payments and payback?

 

Refinancing opens you up to lots of different options. Some qualifications to refinance include illustrating a responsible credit history. People often look into refinancing when interest rates are high, they have a steady income and good credit. Refinancing could help borrowers qualify for lower interest rates. Sometimes people refinance in order to get new loan terms and pay off their loans sooner. Shortening the loan terms on your loan can help you to pay less interest over the life of the loan. Borrowers will refinance to a longer term that allows them to continue the loan payments for a similar or longer period of time.

 

9 Signs It’s Time to Refinance Student Loan Debt

 

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.

Don’t Put Out the F.I.R.E with a Lifestyle Creep

Unless you’re on a desert island somewhere, it’s likely you’ve heard of the F.I.R.E movement. If you haven’t Gilligan, the F.I.R.E movement stands for “Financial Independence, Retire Early.” Basically, it’s a movement started in which many finance savvy people increase their savings in hopes of retiring early and living their best life. Sounds great right? It may sound great but there are really only two ways to participate in F.I.R.E and that is increasing your income level or increasing your savings. So, how does the Financial Independence Retire Early movement relate to lifestyle creep?

What is Lifestyle Creep?

Lifestyle creep might be a term you haven’t heard before, but you’ve probably experienced it or witnessed it. As your discretionary income goes up, your lifestyle becomes more expensive. It’s that train of thought that can really get you in trouble with your bank account. You know the thought, the good ole “I worked really hard this week I deserve a new purse.” That is where lifestyle creep really starts.

 

If you suffer from lifestyle creep you’ve probably also thought of things like. If you can afford a better car, why not drive a better car? If you can afford an apartment without roommates, why have roommates? So, what’s wrong with these thoughts, because if you can afford it, then you should do it, right?

 

Lifestyle Creep and Financial Independence Retire Early Movement

It’s a really delicate balance when income goes up and you feel entitled to nicer things. Suddenly the ability to afford something makes your current situation or current belongings seem like they are not enough, whereas they were just fine yesterday. This is a nightmare for most people involved in the F.I.R.E Movement. So when does it make sense to increase your budget based on higher income and when should you hold off? Here are some things to keep in mind that will keep you away from lifestyle creep and keeping you in the race of Financially Independent Retire Early movement.

 

Always “pay yourself” first.

To pay yourself means to invest in yourself—specifically, your future self (oh hey, F.I.R.E). Increase your contributions to your retirement when your income increases. If you get a raise every year, set a reminder or put your retirement contribution on autopilot to also increase by 1% (or whatever amount works for you). If aiming to be in the F.I.R.E movement you may want to contribute over 1%. This is how people end up “maxing out” retirement contributions, without ever feeling like they are taking a hit in the present to save up for the future. Just ask anyone who’s ever done so. They’ll tell you it may have been the hardest thing they have ever done at the time, but their future self was really grateful!

 

Look at the big picture.

If you get a job offer and will suddenly make 40% more, but your commute will be long, does it make sense to move closer to work if your residence will also cost more? That depends on the big picture. Maybe the amount of time you’ll lose to commuting is worth more than the higher rent or mortgage? Maybe, you will be able to get a house in a better school district, which fits with your long-term plans?  If the commute is farther with a lower mortgage, and you can pay down debt or increase your savings. You need to run the numbers. Check out our below examples of two different scenarios that we estimated. Please note that these are estimated costs.

 

Scenario #1

For example, let’s say that you work in Manhattan, New York…

You currently live in Blairstown, NJ and live rent-free thanks to Mom and Dad.

Your commute to NY takes 4 hours by bus and costs about $400 a month.

If you pay $400 x 12 months = $4,800 a year spent on commuting

In 2019 there are about 250 Business days (excluding public holidays and weekends)

250 business days x 4 hours = 1,000 hours a year you spend commuting.

 

Scenario #2

Let’s say that you move to Hoboken and have a roommate.

You pay $1,000 a month on rent.

Your commute is about 1 hour a day.

Let’s say it costs about $150 a month to commute.

$1,000 a month x 12 months = $12,000 a year on rent

$150 x 12months = $1,800 a year on commuting costs

$12,000 year rent + $1,800 year commuting = $13,800 a year on commuting and housing

1 hour x 250 business days = 250 hours a year spent commuting

 

Now, this example really gives insight into that big picture. Yes, it costs more to live in Hoboken and you have a roommate, but look at that time saved! If your time is of high value to you, Scenario #2 is likely the best choice for you. If you are participating in F.I.R.E and want to save money or pay down debt as much as possible, Scenario #1 is likely the right choice for you. Regardless, which option is personally best for you, understand these are the types of numbers to run when looking to make big decisions.

 

Do I need this or do I just want it? The treat yo’ self trap.

Let’s say your discretionary income goes up, should you get that household repair or a non-urgent medical procedure? By all means, this is not an example of lifestyle creep and you should use your higher income to make it happen. Now, if you find yourself flush with cash and jealous of your neighbor’s new car, you should pause.  If you believe that you have worked hard enough to deserve a big trip. Planning a vacation just because you can, is an example of lifestyle creep. We aren’t saying you don’t deserve a vacation, but that vacation should be planned on a responsible budget.

 

When making any purchasing decisions ask yourself, “Are these wants more important than other needs?” We’d recommend thinking long-term when it comes to making purchasing decisions. What’s more responsible, paying off debt and continue reaping the reward of not having high payments or added interest or making a purchase like a car that you don’t “need”? Maybe there is a compromise like paying off your current car and setting a goal to upgrade next year, or maybe you can plan a trip for next year and save for it while you are concurrently paying down debt.

 

It’s dangerous to deserve better. We are constantly bombarded with flashy advertising, slick marketing, and more choices than ever before. It can be really easy to think that you deserve something better, but in reality, is that new item really going to bring you long term happiness and security? Many participating in the F.I.R.E movement will say items are just items and that real happiness comes from relationships and memories.

 

The F.I.R.E mindset can get even tougher when many of us have had parents who treated us like the most special people ever who gave us what we wanted. That’s not a bad thing until you start making decisions based on what you think you deserve, instead of what you can practically achieve. Thanks, Mom and Dad, but I don’t mind having roommates for another year, or it’s not a big deal to keep driving a car that’s older but works fine.

 

Check those budget boxes.

If your discretionary income has gone up either because you got a raise or other costs went down, you need to do some budgeting. Typical steps that personal finance experts advise working on include getting up-to-date on all of your bills if you aren’t already. Second, have a $1,000 emergency fund. Lastly, experts advise people to focus on high-interest debts before building a savings account with 3–6 months of expenses in it. Then look into things like investing, saving for your children’s college or paying off your house!

 

Achieving a higher income is great! It’s a wonderful feeling when you see your hard work paying off and making life easier. Don’t end up being someone who makes more than enough to live comfortably but you’re still living paycheck to paycheck. Lifestyle creep is so important to recognize and avoid. Keep your financial goals in order and continue to work towards them. Whether your goal is to be Financially Independent and Retire Early or to pay off your debt, you got this!

 

Click for Cards and Accounts That Pay You

 

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.

How To Lose Weight On A Budget Starting Today

It’s that time of year when we’re all reflecting on who we are and how far we’ve come in the last year. Some people hate on resolutions because they are so often temporary, but there’s nothing stupid about trying to make positive changes in your life! Two of the most common changes are losing weight and saving money. Why not do both? Here are some of our tips on how to lose weight on a budget.

 

Have you penciled yourself in?

Put yourself on the calendar and stick to it. It’s easy to skip a workout when you already scheduled a meeting or made other plans. Making YOU part of your routine means that self-care becomes a habit. It can even be something you look forward to liking spin class or joining a workout group? Try working out with friends as it will help to hold you accountable.

 

How much does success cost?

Things like a celebratory meal, your weekly social brunch, or getting a gym membership cost money. That doesn’t mean you can’t budget for them. Just set a goal for how much to spend on those meals out. Make sure you track those little extras and cut yourself off when you’ve reached your monthly limit. If you’re faced with an important celebration, see where you can cut something else to keep your budget balanced.

 

If you want to put a gym membership into your budget, look for places like community centers and colleges. They will often sell much cheaper memberships that are just as good as what you’d use as a more expensive fitness club. If you live in a household with multiple people, try looking into fitness family plans. Fitness family plans can come in especially helpful when you have little ones. Facilities will usually offer discounted classes and free daycare for your kids.

 

There are sneaky calories on every menu.

Buying lunch every day at work can be a real drain to your wallet, and you’re less likely to get a balanced meal within your calorie budget. An average meal out contains upwards of 1,400 calories and can cost Use a little time on the weekend to cook and plan ahead. Keep a few healthy snacks in a drawer at work so that you’re not tempted to hit up the vending machine. You’ll save money, never get hangry, and stay on track for weight loss or maintenance.

 

If you’re going out for a special occasion or just plain didn’t manage to get together a meal to bring to work, look up the restaurant menu ahead of time. Make a decision on what to eat when you’re not hungry! That way, you won’t be tempted into getting a gigantic double-bacon burger bomb. Most places have their menu on their website, but you can also check somewhere like

 

We’re a generation of Googlers—use it!

Thanks to the wonders of the internet, there are so many free resources for fitness. From to blogs with the best bodyweight exercises, free exercise plans are everywhere. You don’t need a fancy gym to get in shape, but you do have to be motivated. If you’re on your phone regularly anyway, follow some of your fave fitness Instagram accounts like Ebonny Fowler (@funwithfit) or Marie Purvis (@MariePurvis) to get simple, effective workouts delivered right to your IG feed. Or look for other fitness gurus who focus on how to stay fit without having to sell you something.

 

Make savvy substitutions.

If you know that a big slice of pie (pizza or otherwise) is your weakness, look for ways to enjoy your favorite foods without tanking your calorie budget or emptying your wallet. For instance, you can make inexpensive pita pizzas at home using whole wheat pitas, low-sugar sauce, and all your fave fresh veggies and herbs. If you eat mindlessly in front of the TV while you watch season 4 of The Office for the 200th time, pop some light popcorn to crunch instead of sitting down with a bag of greasy chips.

 

How Hydrated are You?

Staying hydrated can help make you feel less hungry on top of promoting healthy digestion and ample energy levels. You don’t even need a fancy water bottle. Just make sure you’re regularly drinking a glass of water and you’ll reap the benefits.

 

Mom was right about fresh air.

Nobody says you have to become a bodybuilder to lose weight. Going outside to walk or ride your bike can be a great way to keep your weight in check, get the mental health boost, and feel connected to your community. Even better: find someone to go with you! Don’t forget about the benefits of biking or walking to work. Saving money on transportation while getting your heart rate up is an incredible way to tighten your budget and burn some calories. Plus, it’s worked right into your routine, so it won’t feel like exercise.

 

Be kind to yourself and have patience.

Thankfully we millennials are pretty good about self-care. We’re the first generation to really spotlight mental wellness as a really important part of your overall health. Mental wellness can suffer when you decide that you need a big change and try to overhaul all of your habits at once. Have some patience and realize that it’s not easy to change overnight. You’re still going to have some slip-ups, and you’re not going to experience a #TransformationTuesday overnight. Sure, physical health and financial health are important, but so is mental health. Make sure you’re not setting unrealistic expectations, and be sure to take rest days even when you’re hitting things hard at the gym.

 

If losing weight is only part of your goal and you really want to look at how to save money, check out our student loan refinancing options. You can call us any time to talk to a specialist and see how we can help!

 

5 Financial Mistakes to Avoid in Your 20s

 

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.

 

Don’t Wait for Graduation to Pay Down Student Loan Debt

What does a currently enrolled graduate student, a recent graduate, or a Doctorate student all have in common? The answer is simple, student loans. Sounds like a bad joke, but student debt in the United States is no joking matter. The current student loan debt total has hit $1.5 trillion as of 2018 according to Federal Reserve data. If you find yourself a borrower of student loan debt, know that debt doesn’t just start after graduation. The moment your loan is approved you become a borrower and therefore take on the responsibility to pay down that debt. As a borrower, here are some ways to be financially responsible and pay down debt quickly ensuring yourself a brighter financial future.

 

Don’t Go Overboard

 

According to CollegeBoard the average full-time bachelor degree seeking student, who attends a four year school will pay somewhere in the range of $21,370 to $48,510 per year in 2018 – 2019.  Now the average Master’s seeking student will pay about $19,080. These estimates do include the cost of room and board and will differ depending on if the student is attending an out of state school or an in-state school.

 

When the time comes to apply for your loans, be sure you have a budget! We cannot stress this point enough you need a financial plan before you make the decision to apply for student loans. Know what you’ll need to borrow money for. Think about tuition costs, housing, meals, book costs, personal costs, and transportation costs. Only borrow what you absolutely need for school.

 

The Countdown

 

Don’t be the student who has the countdown until graduation. You know, the one using the grace period to look for their future career and move back in with their parents. Now there’s nothing wrong with moving back in with the parents to save a few bucks, in fact, we would encourage it. What we mean is instead of waiting until the clock starts at the end of your grace period start paying down debt on day one! The sooner you can start throwing money at your student loans, the better off your future self will be.

 

Now it doesn’t have to be an astronomical amount of money. Even the smallest contribution towards your debt will help you in the long run. Let’s say that instead of going out to brunch with your friends on the weekend you decide to make it. Let’s say you usually buy an egg and cheese, on a bagel with a coffee for about $10 for simplicity. That $10 a week can turn up to $40 a month.

 

Say you took out $30,000 in student loan debt. If you completed a $40 payment every month while you’re in school, you would save $2,515 from the total of your loan. Yes, you can drop almost $3,000 off your loan by simply making a $40 a month payment. Small sacrifices make all the difference in paying down your student loans before graduation.

 

It’s No Vacation

College in the past was seen as an experience but it is not any longer. Don’t treat your education like a vacation with a limitless budget. According to the Bureau of Labor Statistics, the annual American household cost for eating out is $3,000. Even if it’s only one person, that would count as a household. Broken down that would be $250 a month the average household spends eating out! Before you start spending money on food remember that’s money that could go towards your student loan debt. We all have to eat to live, but is eating out necessary? Try using that meal plan or doing weekly grocery shopping and meal prep.

 

Stay in Budget

Someone once said “Just because you can, doesn’t mean you should” that could not be truer here. Though you may have money for streaming services like a Spotify Premium® membership or Netflix® – doesn’t mean you should have it. In addition to cutting down on eating out, you could lose that Netflix® account. About nine out of ten college students use Netflix® according to Daily to Reader. If you’re living on campus you’re provided with free cable. Yes, the keyword being “FREE” – drop the subscription services and put them towards student loan debt. No, you won’t be able to watch the latest series of Stranger Things on your own, but I’m sure your friend or their friend has Netflix®. The Basic plan on Netflix® as of 10/2018 is $7.99 a month. Let’s take your savings from cutting back on eating out including our previous example- $100 and savings from losing that Netflix® subscription $7.99 that equates to 107.99 a month towards student loan debt. When you pay $107.99 every month towards your loan it is a savings of $7,083.71 from the total loan amount.

 

They’re Called Doctors

 

If you’ve ever seen the movie Tommy Boy you’ll get the reference. If not, you can watch the clip online. Going to school for seven years is for doctors, not the average student seeking a bachelor degree. All jokes aside, you need to do your best to graduate on time. Staying in school longer means more debt and that means more money you’ll need to pay off in the long run.

 

In recent years there has been a trend of typical 4-year degrees taking 6 years to achieve. Students who take longer to graduate are spending 50% more than participated for their degrees according to Student Debt Relief. One major tip (no pun intended) know what you want to major in before starting. It’s okay to change your major but work closely with counselors take summer classes. Do your best to stay on track for your estimated graduation date.

 

Evaluate Loans

Yes, you finally graduated! Don’t be fooled the work doesn’t stop. To continue being a financially responsible borrower you’ll need to evaluate the types of loans that you have. Do you have federal or private loans? The type of loans that you have will have major implications on the options that you available to you moving forward.  Pay attention to your interest rates and knowledgeable regarding repayment types.

 

Be wise; if you are within that 6 month grace period, continue to make those payments because we know that they will pay for themselves and then some. Create a long-term plan to pay down your debt. Use your income to create the long-term plan and stick with your budget. There are so many resources available at your fingertips to research things like loan consolidation, student loan refinancing, student loan forgiveness, and deferment and forbearance.

 

Your responsibility for staying a responsible borrower is to continue those healthy spending habits that you created for yourself in college. In addition you should look to further your education. Do you want to get a Master’s Degree? Use reliable sources and stick to a budget and long-term plan. Education is so no joke. Whether you’re the currently enrolled graduate student, a recent graduate or a Doctorate student debt doesn’t have to weight you down forever.

 

Learn More About Grace Periods

 

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.

10 Ideas for Valentine’s Day That Won’t Break the Bank

Ahh, Valentine’s Day! Sure, many a cynic has pointed out that Valentine’s Day can be seen as a commercial holiday that centers on material things instead of love, but it doesn’t have to be that way. You can show your special someone how much you love them and have a really meaningful day together without blowing your budget on expensive gifts and dinners. Here are ten ways to spread the love this Valentine’s Day without breaking the bank.

 

Go on a photo opp date

Who doesn’t love a good selfie especially with that special person in your life? Find all the great places around town for a selfie and take a fun pic at each location. You can print the photos later and make an inexpensive album of your own. This is also a great idea for an anniversary. Revisit all the places that are significant to you and take a quick pic. It will be fun to think back about those memories and how things have progressed as you’ve grown together.

 

Cook at home together

Don’t be another trend spend statistic, cooking is so much cheaper than eating out, and you don’t need a reservation! Splurging on some fancy steak or fish will cost so much less than going out for the same meal. Look up simple recipes with classic flavors and try them out. You can dress up and light some candles so that the mood is just as special, even if you’ll have to pour your own wine. If your tastes are less bougie, try making a meal from another culture that you’ve always wanted to try and listen to some music. Whatever you two want to enjoy together is what will make Valentine’s Day special.

 

Schedule for a different time

Valentine’s Day evening is obviously a huge night for restaurants with fancy dinner specials. Often restaurants are booked on Valentine’s Day, but you don’t have to celebrate at the same time as everyone else. Why not go out to breakfast on Valentine’s Day or spend a special lunch hour together? The cost of your meal will be less and you probably won’t be splitting a bottle of wine at that hour, either. You’ll get the benefits of Valentine’s Day with half the costs! You’ll still get to have the fun of going out to have someone cook a delicious meal for you. Plus: no crowds!

 

The More the merrier

Who doesn’t love a Gal-entine’s Day?! There’s no reason that your special day has to be a solo thing with your partner. Consider hosting a small group at your house, where people can bring extra wine or other goodies for everyone to share. This way everyone spends less has more fun and benefits from each other’s varied tastes and culinary skills. Bonus- you’ll probably get some sweet treats for hosting dinner!

 

A movie with a view

Charge up your laptop and download a movie. Cough, cough – did someone say Netflix®?  Bring a picnic basket and enjoy a movie under the stars. Make sure to bring everything you need to stay warm and be comfortable so that your special date isn’t ruined by a chill or breeze. Not exactly picnic season where you live in February? That’s okay. Even doing the same thing indoors somewhere other than your usual dining table can be a fun way to do something different and relax together.

 

Inexpensive get-away

Want to get away? Try renting a room from somewhere like Airbnb® instead of getting a fancy hotel room. Weather permitting, you could rent a cabin for a lot less than a four-star hotel and enjoy the peace and quiet while you relax together or take in the scenery on a hike. If you like to ski or snowboard there are a ton of places that you can visit. Even if you aren’t the activity type of couple there is always streaming movies or TV.

 

Barter for babysitting

Don’t want to go broke on a babysitter? This could sound bad but try bartering with your friends! No, we don’t mean barter off your children, but offer to babysit for a friend in exchange for them doing the same. Date night is a lot cheaper when you’re not adding babysitting bills on top of it. If you don’t know anyone who would want to do this, look for parents night out events at your local rec center or church. They often offer free or very affordable childcare to give parents of all incomes a chance to get out of the house and bond for a while without the kids.

 

DIY

There are so many ideas for gifts you can make that mean more than something expensive. Whether it’s a coupon book to redeem for special events in the future or a photo collage of your favorite pics as a couple, think about what you can do that will really show how much you care, without requiring an expensive trip to the mall.

 

Entertainment for less

Check out small theaters near you. Many towns have a local theatre near them if not, look for something fun like a gallery show or small performance. Local performances and events won’t cost as much as a bigger event. The added plus is you’ll be supporting a local business. It can be a nice way to reconnect with your community and see what kinds of art and entertainment are out there that you don’t usually go see. Don’t overlook simply seeing the sights. Checking out local architecture, monuments, and historical places isn’t just for tourists.

 

Cut the average cost of your date in just one way

If you still want the experience of going out, consider just doing half of your date at home. Maybe you go out for dinner but come home to stream a movie? If you like cooking you could try cooking at home but go see a movie afterward. You could even do both of those at home and then head out for a fancy drink afterward. You would still save a ton by not doing the entire night out, especially considering that the average dinner and a movie date costs $102!

 

Don’t let the pressure of the Valentine’s Day holiday get to you! Creating a special experience for Valentine’s Day is unique to who you two are as a couple. Don’t let your holiday be manipulated or changed by marketing or ads. We’ve all seen the jewelry and expensive flowers that start appearing in Februarys.  Keep in mind that everyone just wants to know that their partner cares about them and listens to them. This holiday is really about how you can show you care in your own way.

 

Learn How to Write a Monthly Budget

 

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.

Stop the Trend Spending™

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

 

 

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Asking for a Raise

At one point or another in one’s career, you arrive at the realization that, “I need more money.” When that realization hits you can spend less, save more money, or make more money. Maybe you’ve cut way back on spending, but it’s still not enough. You might have even considered refinancing your student loans or downsizing your home or apartment. Did someone say “tiny house”? Jokes aside, at some point, you’ll come to the conclusion: You need a raise. Tough nobody likes asking for a raise, if you want more money, you probably have to. Here are a few tips we’ve gathered on how to increase that take-home pay.

 

But Why?!

 

Did you get a new car? Did your landlord raise your rent, or did you lose a bunch of money investing in cryptocurrency? These are all reasons you might need money, but they aren’t good reasons to ask for a raise. Look at it in a different way. Say you go to a coffee shop every day and your $3.00 coffee is suddenly $3.50. You ask the guy behind the counter why the price went up. If his answer is, “we’re serving higher quality coffee” or “we have bigger cups, now.” you may not care much about the price increase, but if he says “we want to make more money,” then you might not be as happy. Your salary is no different. It’s a business decision that needs to be made. Your boss needs to understand why you need more money. Just like any other business vendor if you’re bringing more value to the company, that’s a great way to earn a raise. By the way, stop buying that coffee, you can make it way cheaper at home. Hello, French Press.

 

Toot Your Own Horn

 

It’s not enough to do a good job and hope it gets noticed. Make sure your hard work gets noticed! If you have positive news to share try and do it in person. Let your supervisors know any milestones you’ve achieved or when you’ve met or exceeded goals. Now, let’s be clear here we aren’t saying go bragging about yourself at every opportunity to the point it is obnoxious, but anytime you can let them know you’re helping, do it. This can be one of the hardest things for some people to do. Many workers tend to lean towards the humble side and just aren’t self-promoters. If it’s just too hard for you, try seeing if others will help to share your efforts with the boss and do the same for them. Regardless, the simple truth is when you get noticed more, you usually get paid more.

 

This is EVERYTHING

 

Timing can be everything when it comes to a raise. And that can be tricky. Knowing when and how your job evaluates pay increases is important to know. Sometimes, you’ll walk into a performance review and there will already be a decision made regarding your compensation. At some companies, there’s never a set time and you won’t ever get a raise if you don’t ask. What is usually best is after you’ve laid your plan as to why you deserve a raise, set up a time to talk with your boss one on one. This will let them know that one, you want a raise and two you’re serious about finding a way to make that happen.

 

Work Past the “No”

 

Let’s face it getting a raise isn’t always easy. The answer could very well be “no.” Use that “no” to figure out what it’s going to take for them to say “yes” and allow that to set some new goals for yourself. That way when the opportunity comes around again you can show them what you have accomplished.

 

Find Someone Who, Will

 

Don’t ever threaten to leave as a means of getting a raise, but if they’re not willing to give you the compensation you feel is deserved, maybe it’s time to start looking. Your company may not be in a good financial state or just unwilling to pay more. Some companies lowball employees on salary simply because they’re betting you’re not going to leave. If you don’t feel valued, see if you can get more compensation elsewhere. If you go this route of finding a new job, just make sure you’re making a logical decision and not an emotional one. The grass often looks greener in another pasture, but people often leave a job for more money only to find the hours are longer, the expectations are higher, or it’s not a pleasant environment. If you decide to leave, know what you’re getting into and compare compensation before you make a decision. Let’s say you do get an offer and you’d consider staying at your current job, see if they will counter offer. If they are truly happy with you, they will often agree when faced with the cost of finding hiring and training a new employee.

 

Out of the Box

 

If you can’t adjust your salary to your lifestyle then you need to adjust your lifestyle to your salary. There’s probably plenty of ways to save without pinching every penny. Most you’ve probably heard of like cutting down on subscription services, eating out less, cutting the cord on cable, or buying used products. To save money you may have to think outside of the box. One thing you can do that typically most people don’t think of is—refinancing student loans. Refinancing could help to lower your interest rate, saving you in the long term, and probably lower your monthly payment which means more cash for you.

 

Regardless, how you choose to proceed in your journey of asking for a raise understand your strengths. In order to really understand the value that you bring, you need to know what you’re good at. Be sure to stay on top of the news and changes in your industry. If you’re constantly looking to improve your own personal skills this can help to attribute to the value you bring your company. Go ahead and sign up for that Saturday webinar or get that additional certification you want. Be your best and if your current company can’t seem to see that, then it’s time to move on. Good luck on your career journey!