Tag Archives: debt

Financial Literacy: Why College Is Not The Time To Blow It Off

Posted on by 0

© 2007 Quazie, Flickr | CC-BY | via Wylio

Your college years generally set the tone for your entire adult life. During this period, the choices you make can either lead to lifelong stability or long years of financial insecurity. By following well-established principles, you can prove yourself an excellent steward of the resources you have been blessed with. While learning the basics of financial literacy is doable for just about anyone, this topic can seem like a tough nut to crack for the uninitiated.

Whether they are enrolled in college or entering adult life and considering their options, millennials enjoy many opportunities to take on debt. Well-intentioned or not, an enormous number of lenders present young adults with various forms of credit. Whether they have graduated or not, millions of young adults leave college life with significant debt levels. Depending on your level of financial literacy throughout this period, accepting lines of credit can cause you to sink or swim in life.

Unfortunately, far too many people are entering their adult lives with little understanding of finances. A 2012 report from the SEC found that the average Wall Street investor don’t understand basic concepts like compound interest and inflation. If this class of people needs to “hit the books” and develop financial literacy, how much more does the average college student need to take responsibility of their own finances?

Despite the unique challenges millennials face, members of this generation can access financial tools that were not available to their parents. Many resources, including personal finance software, calculators, budgeting apps, financial blogs and others offer insight, direction, tips and financial education that helps set you on a path to being financially responsible.

The TopTenReviews College Student Guide explores exactly how financial software can help students live within their means. It enables you to have a full, clear accounting of how you spend. You might be bleeding money in ways that are genuinely surprising. Once you know your problem areas, you can focus on how to improve them and be more efficient at how you spend your money each month.

Some might feel that saving is as simple as it is important, for others it is a difficult concept to keep. When we are prepared, we will not fear. As Joseph in Egypt clearly showed, saving is the cornerstone of wise living. What would have happened to Egypt if Joseph did not save? Even if it feels almost as hard as wringing water from a rock, it is important to set aside a percentage of your monthly income for emergencies. Find the method of saving that will work best for you. Maintaining the right kind of savings habit might cost you a little pain now; however forgetting to save can cost you a world of heartache when you are faced with an unforeseen crisis and a shortage of funds. With the many resources and tools available today, there is plenty of help and guidance to help you improve your understanding and your situation before it gets out of control.

Lessons in financial literacy can hit home powerfully when learned from others who share your Christian ideals and values. Get to know trusted mentors who have faced similar challenges and blazed their own trails towards peace and security. Learn how to be financially responsible and self-sufficient during your college years, and don’t put it off. With God’s help, you’ll discover that becoming financially literate is more than a chore; it is a journey of empowerment and self-discovery.

View Jesse.PNG in slide showJesse Woodhouse is a Team Lead at TopTenReviews. He is a proud husband and father and loves sports, music and the outdoors.

Over Half of College Students do NOT know their College Debt Amount.

Posted on by 1

I still remember the number – 27,000.

There is no relationship between the number and my age, birthday, or anniversary.  It is not the number of comic books that I own (although, I wish it was).  The number seemed to follow me everywhere I went.  I began to feel a strange kinship with the number.

That number was my student debt total from graduate school.  I predicted the number even before I began my first year, and knew it was coming.  I still remember the day it was paid off.

Debt was a big deal to me, and I was aware of its weight.  Unfortunately, the concept of debt is lost among many students entering college.

I came across this article this week from the Washington Post.  A study was done among first year students about their perceptions of debt.

The study concludes that, “Students who do not have a good idea of their level of borrowing may make expensive mistakes that they will later come to regret.”  I have seen many students take out extra student loans for leisure trips or unnecessary expenses.

The study also states that “They are also likely to be surprised or even fearful when their first loan payments come due, which may impose an emotional burden on borrowers.”

That is an understatement.  The emotional burden of debt exists until the debt is paid.  Proverbs 22:7 states, “Just as the rich rule the poor, so the borrower is servant to the lender.”  Here are some stories from those living with school debt.

Debt is real.  It has consequences for today, and for the future.

We must help emerging adults understand the ramifications of debt, and help them find cost-effective solutions while discovering a vocation.

david in hat - blackDr. G. David Boyd is the Founder and Managing Director of EA Resources.  He has a passion to help emerging adults and equip churches.  He is thankful for his wife Rachel who worked hard to pay off his school loans.

 

 

Life with big student debt: tales from four college graduates

Posted on by 0

 

I wanted to share an article with my readers about living life with student debt.

The average debt for a graduating student in 2013 was $32,500          (Source).  This number continues to escalate with the rise in college tuition.  This number includes an average of $3,000 in credit card debt.  

If you don’t have time to read the whole article, here are a few notes:

1.  Big-name schools are not always worth the big price tags.

It is important that you know that universities want your money.  They NEED your money.  As you step onto campus, please know that they are trying to sell you on their campus, their classes, and their reputation.  Many schools say that their rankings or reputation will instantly open doorways to higher-paying jobs.  In many situations, this is a marketing tool, and is not based upon real data.  Jenny Hecht says, “I didn’t know that once I had my [master’s degree] nobody would care where it was from.”

2.  Don’t take every loan that comes your way.

© 2007 Quazie, Flickr | CC-BY | via Wylio

Education financing is a big business, and there are many people who will gladly give you loans that you feel will lead you to your dream life.  However, many students are waking up from the dream, and realizing that being buried by debt is a nightmare.  Before you accept a loan, make sure that you have done your homework.

“At 18 years old, you don’t really know what you’re getting yourself into,” says Gorden, who wishes more advice had been available then. “Those last two years, I was approved for over $60,000 – for a 20-year-old, without a cosigner, with no job, no sense of a future job – and they just gave it to me.”  

As a emerging adult, you will be showered with money; however, none of it is free.

3.  Educational Debt can grow even after college.

While you can request loan deferment or refinance, your debt will continue to grow if you are not able to make your payments.  One student wrote that she owes about $5,000 more than she did when she graduated, due to a few years when she couldn’t cover all of the interest payments.  Delaying payments on a loan is a serious decision, and should not be based solely upon your dream of one day landing a higher-paying job.  

4.  Take time to think about how your debt will affect your future.

It is important that you take responsibility to think through your financial future.  Many students bury their heads in the sand, and ignore how debt will affect them.  “But you don’t really think about what it actually means to have a house worth of debt, on a higher interest rate than a mortgage, until you’re getting close to graduating and thinking about having to repay them.” There are financial on-line tools available to you to help you understand what your future loan payments will be, and how they will affect your budget.

Education is an investment.  Make sure that you make a wise decisions during the journey.

School Debt Consolidation – Don’t Get Fooled!

Posted on by 0
Debt from Flickr via Wylio

© 2013 Simon Cunningham, Flickr | CC-BY | via Wylio

Thieves will always follow a trail of money.  In today’s world, educational debt is a big business; therefore, it should not be a surprise us that people are making a living off stealing from those who are buried in school debt.

The average debt for a graduating student in 2013 was $32,500 (Source).  This number continues to escalate with the rise in college tuition.  This number includes an average of $3,000 in credit card debt.  Debt is difficult to repay for students who graduate, but we must also remember those who are not able to finish their education.

Feelings of desperation causes people to run towards news that sounds too good to be true.

Here is the article that explains the scams.

Debt is not a game.  It is real, and will affect your life.  Proverbs 22:7 says, “The rich rule over the poor, and the borrower is servant to the lender.”   As Christians, we must use wisdom as we make decisions about educational debt.