Friday, January 27, 2012

Guest Post: Mitigating That Student Loan Burden

This is a guest post written by Sam Peters, who frequently blogs about topics relating to money and personal finance.

Those of you following my battle against debt have probably realized that a substantial portion of that debt – around $13,000 worth at the end of last year – is tied up in student loan obligations. Student loans reflect a different sort of debt when it comes to prevention or mitigation. Consider it this way: someone with thousands of dollars of debt sitting on their Visa likely made some imprudent spending decisions in the past. But a person trying to pay off their Discover graduate student loans, for example, was probably fully aware of their impending burden when they took out the loans in the first place. They knew they were going to be in debt, they saw the writing on the wall, but they decided that it was worth it to get an education.

Considering the importance of a college degree these days, I believe that there is certainly nothing wrong with that approach. I have student loan debt, to be sure, but education I received has contributed to a job that helps me pay off that debt. In the long run I come out even, if not (hopefully) on top.

So I don’t regret deciding to take out loans and financing a college education. But what I do regret is that I didn’t take concerted steps to reduce the cost, the number of loans I needed to take out, and consequently the debt with which I graduated. If I could go back in time, I would tell my pre-college self to try harder to bring down my college costs. Specifically, these are the tips I would recommend:

Boost Financial Aid

Increasing the amount of financial aid you receive is naturally often a losing battle. Still, there are countless tricks that I may no effort to try back in the day. These tricks include investing assets in retirement accounts, taking yourself as a dependent, and including family liabilities if you have siblings in school at the same time.

Follow A Loan Forgiveness Program

Many schools, scholarships, and financial aid programs provide stipulations whereby a graduate can earn forgive on loan interest if they pursue certain public sector careers for a given amount of time. While such work doesn’t exactly interest me, it would have been nice if I had kept those options open. I could have paid off my debt and moved on to a different job by now.

Save on Textbooks

A surprisingly significant portion of my student loan debt comes not from textbook costs. I’ve always appreciated that textbooks are expensive, but I never realized how quickly that all added up. If I was redoing college, then, I would make a point to shop for textbook deals on, share books with friends, or simply forgo a non-required class that has a heavy reading load.

There are many other tips for reducing your student loan debt, but there are the three main ones I would probably give my pre-college self. Too bad time travel isn’t possible. But fortunately, someday my student debts will be gone and – hopefully – the benefits of my degree will continue to live on.

Tuesday, January 17, 2012

Don't Give Up Yet! Why Sticking to Resolutions Can Save You Money

This is a guest post written by Sam Peters, who frequently blogs about topics relating to money and personal finance.

The holidays are rarely nice to any of our budgets. I personally dread the holidays only because I feel like I won't be able to pay down as much of my debt as I would like due to gift buying, holiday cooking, and additional travel expenses. Then once New Year's has passed, I find myself scrambling to set a budget to determine how quickly I can get my finances back on track.
However, living on ramen isn't the only way to get yourself back on the right financial foot come the new year. By simply sticking to those New Year's resolutions, you can save yourself a substantial amount of cash both short term and long term. A few of the most money saving new year's resolutions that you should think twice about before giving up on include:

Dropping Weight and Getting in Shape

If you are looking to save yourself a substantial bit of money both short term and long term, losing weight is the way to do it. You will immediately notice a difference in your monthly budget as you will save on eating out in both restaurants and drive-thrus - common places to be avoided by dieting individuals - and you will also save yourself money over the long haul as you will prevent yourself from having to pay higher insurance premiums and high medical bills from health conditions associated with being overweight.

Giving Up Addictions

While you may not consider yourself an addict, if you just “have to have” that cup of coffee each and every morning from your favorite coffee shop, there is a good chance that you are a coffee addict. Whether you are addicted to caffeine, cigarettes, or just frequent that after work happy hour, by giving up these vices, you can save up to $200 a month. All three of the aforementioned also negatively impact your health, especially smoking, and by giving them up now you can avoid high medical bills often associated with the health conditions that arise from abusing any of them.

Living on Less

Choosing to live on less in the New Year obviously has its financial perks, but like losing weight or giving up any vices, living on less is often very difficult because it requires a complete lifestyle change. The reason why most of us get ourselves into high debt is because we overindulge and neglect our budgets for years, and going from living in a nice roomy apartment with a great view of the Chicago skyline to a cramped studio with most of our possessions either sold or tucked away in area Chicago self storage facilities isn't always an easy transition. However, if you stick to living without the excess – including those shopping sprees you feel as though you deserve sometimes – you can quickly reduce your debt.

Getting out of debt isn't always easy, but you don't always have to take extreme measures to make it happen. Sometimes, following a simple tradition can help you get there while also making you feel better about yourself both physically and mentally.