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Three simple words can strike fear into the heart of any millennial:

Student.

Loan.

Debt.

The anxiety is not surprising: Members of the Class of 2017 had an average of $29,900 in student loan debt.¹

Nearly $30 grand? For that you could travel the world. Put a down payment on a house. Buy a car. Even start a new business! But instead of having the freedom to pursue their dreams, there’s a hefty financial ball and chain around millennials’ feet.

That many young people owing that much money before they even enter the workforce? It’s unbelievable!

Now just imagine adding car payments, house payments, insurance premiums, and more on top of that student debt. No wonder millennials are feeling so terrible: studies show that graduates with debt experience lower life satisfaction than those without.²

Now is the time to get ahead of your debt. Not later. Not when it’s more convenient or feels less shameful. You have the potential right now to manage that debt and get out from under it.

So how do you get out from under your debt? Sometimes improving your current situation involves more than making smarter choices with the money you earn now. Getting out of that debt ditch means finding a way to make more.

There are 2 things you can monetize right now:

  • Your education
  • Your experience

Both have their own challenges. You may not have spent much time in a particular field yet, so not a lot of experience. And what if you’re working a job that has nothing to do with your major? There goes education.

Two speed bumps. One right after the other. But you can still gain momentum in the direction you want your life to go!

How? A solid financial strategy. A goal you can see. A destination for financial independence.

Debts can become overwhelming – remember that stat up there? But with a strategy in mind for the quick and consistent repaying of your loans, so much of that stress and burden could be lifted.

Contact me today. A quick phone call is all we need to help get you rolling in the direction YOU want to go.


¹ “A Look at the Shocking Student Loan Debt Statistics for 2018.” Student Loan Hero, Jan 27, 2021, https://bit.ly/2de72OP.
² “The Devastating Psychological Burden of Student Loans,” Mark Travers Ph.D., Psychology Today, Dec 16, 2020, https://www.psychologytoday.com/us/blog/social-instincts/202012/the-devastating-psychological-burden-student-loans.

Headed in the Right Direction: Managing Debt for Millennials

So you’ve made the commitment and started your budget, but after a while something seems off.

Maybe your numbers never add up or too many expenses are coming “out of the blue”. You might also feel a sense of dread every time you make a purchase. No matter what you do, this whole budgeting thing doesn’t seem to be working.

Hang in there! Here are a few budgeting potholes that might be slowing down your financial goals and how to avoid them!

Stinginess

Budgets are supposed to help you use your money wisely. They should be a positive part of your life—they’re not supposed to make you feel like you’re constantly failing. But sometimes our passion to save money and get our financial house in order gets the better of us, and we set up budgets that are too restrictive. While coming from good intentions, an overly thrifty budget can actually make it harder to achieve your goals. An impossible to follow plan can make you feel discouraged and resentful. You might even decide that it’s not worth the hassle! Try starting with a more reasonable strategy and then build from there!

Too complex

Sometimes our budgets are just too complicated to actually be useful. Not everyone loves working with numbers, and sometimes fiddling with spreadsheets can get so overwhelming that we just want to quit. Plus, there’s plenty of room for human error! A good option is to investigate free budgeting sites or apps. All you do is punch in the correct numbers and the magic of technology will do the rest!

One time budget

Life is constantly changing. Your simple, streamlined budget might be perfect for the life of a young single professional, but will it still hold up in five years? Where will the portion of your paycheck that works down your student loans go once you’re debt free? And when will you start saving for a house?

Take some time every few months to review your budget and see what’s changed. Evaluate what you’ve accomplished and areas that need improvement. Ask yourself what your next milestones should be and if those line up with your long-term goals!

Budgeting takes work. But it shouldn’t be a burden. Cut yourself some slack, prune your process, and stay consistent. You might be surprised by the difference filling in budgeting potholes can make in your financial life!

Beware These Budgeting Potholes

Here’s every millennial’s dream—you wake up one day to find all your student loan debt completely forgiven.

And recently, that dream became a reality for dozens of former students when the U.S. government gave $17 billion of debt relief to 725,000 borrowers.¹ Not bad!

Still, that hardly puts a dent in the $1.6 trillion in student loan debt collectively owed by $43 million Americans.²

So, what are the chances that your loans will be forgiven, and how do you know if you qualify?

Here are three ways to qualify for student loan forgiveness…

Public Service Loan Forgiveness

Work for a qualifying non-profit or public organization? Then you qualify for the Public Service Loan Forgiveness (PSLF) program.

Under this program, your remaining loan balance will be forgiven after you make 10 years’ worth of payments.³

And fortunately, it just got far easier to qualify—before recent reforms, the denial rates for the PSLF program was up to 99%.⁴

So if you’re a public servant, head over to the Federal Student Aid website and head over to Manage Loans.

Teacher Loan Forgiveness

Similarly to the PSLF program, the Teacher Loan Forgiveness program is available for educators. If you’ve taught in a classroom for 5 years and meet the basic qualifications, you could be eligible for up to $17,500 of debt forgiveness.⁵

Be warned—there are some highly specific qualifications. From the Federal Aid website:

“You must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.”⁶

Sound complicated? That’s because it is. As with most financial moves, meet with a debt professional or financial planner to see if you qualify.

Total and Permanent Disability Discharge

If you’re totally and permanently disabled, you may be eligible for a complete discharge of your student loan debt.

You’ll need to submit proof of your disability to your loan servicer. The proof can come in many forms, such as a doctor’s letter, a Social Security Administration notice, or documentation from the U.S. Department of Veterans Affair.

As with everything involving bureaucracy and disability, you can quickly find yourself mired in red tape and conflicting phone numbers. That’s why it’s always wise to seek out professional help if you think you might qualify.

The sad truth is that few actually qualify for these programs. If you work in the private sector, are healthy, and face significant debt, you’ll need to find alternative strategies for moving from debt to wealth.

Still, it’s good to know that there are options out there for those who qualify. So if you think you might be eligible for one of these programs, don’t hesitate to explore your options.


¹ “Here’s who has qualified for student loan forgiveness under Biden,” Erika Giovanetti, Fox Business, Apr 26, https://www.foxbusiness.com/personal-finance/student-loan-forgiveness-programs-biden-administration

² “Student Loan Debt Statistics: 2022,” Anna Helhoski, Ryan Lane, Nerdwallet, May 19, 2022 https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt

³ “Want Student Loan Forgiveness? To Qualify, Borrowers May Need To Do This First,” Adam S. Minsky, Forbes, May 16, 2022, https://www.forbes.com/sites/adamminsky/2022/05/16/want-student-loan-forgiveness-to-qualify-borrowers-may-need-to-do-this-first/?sh=6aa44a617cdb

⁴ “Want Student Loan Forgiveness?” Minsky, Forbes, 2022

⁵ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher

⁶ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher

Who Qualifies for Student Loan Forgiveness?

Your credit score is a big deal.

A low score can saddle you with anything from high interest rates, difficulty scoring important loans, or poor employability!¹

But what exactly is a credit score? And how is it different from a credit report? It turns out the two have a close relationship. Let’s explore what they are and how they relate to each other.

Credit Report

Your credit report is simply a record of your credit history. Let’s break that down.

Many of us carry some form of debt. It might be a mortgage, student loans, or credit card debt (or all three!). Some people are really disciplined about paying down debt. Others fall on hard times or use debt to fuel frivolous spending and then aren’t able to return the borrowed money. As a result, lenders typically want to know how reliable, or credit worthy, someone is before giving out a loan.

But predicting if someone will be able to pay off a loan is tricky business. Lenders can’t look into the future, so they have to look at a potential borrower’s past regarding debt. They’re interested in late payments, defaulted loans, bankruptcies, and more, to determine if they can trust someone to pay them back. All of this information is compiled into a document that we know as a credit report.

Credit Score

All of the information from someone’s credit report gets plugged into an algorithm. It’s goal? Rate how likely they are to pay back their creditors. The number that the algorithm spits out after crunching the numbers on the credit report is the credit score. Lenders can check your score to get an idea of whether (or not) you’ll be able to pay them back.

Think of a credit report like a test and the credit score as your grade. The test contains the actual details of how you’ve performed. It’s the record of right and wrong answers that you’ve written down. The grade is just a shorthand way to evaluate your performance.

So are credit reports and credit scores the same thing? No. Are they closely related? Yes! A bulletproof credit report will lead to a higher credit score, while a report plagued by late payments will torpedo your final grade. And that number can make all the difference in your financial well-being!


¹ “The Side Effects of Bad Credit,” Daniel Kurt, Investopedia, Jun 11, 2021, https://www.investopedia.com/the-side-effects-of-bad-credit-4769783

Credit Score vs. Credit Report

Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for an early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied mortgages or loans, endure higher interest rates, and potentially difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey to your financial destination? Do you know how much you can set aside for retirement and still have something left over for that Hawaii trip? And do you have any ideas about how to raise that credit score? Looking at where you are and figuring out what you need to do to get where you want to go can be easier with help. Plus, what’s a road trip without a buddy? Call me anytime!

… All right, all right you can pick the travel tunes first.

Making Money Goals That Get You There

Finances are a challenge.

Whether you’re in your 20s and paying off student loans or in your 40s and trying to save for retirement, financial decisions can be complicated.

The good news? There are steps you can take to avoid the most common mistakes so you have more peace of mind when it comes to money management. Here are some of the most common financial mistakes people make, and tips on how to avoid them.

Caring too much about what others think. This may be the tough love you need to hear. No one judges the car you drive. Or the watch on your wrist. Or the size of your home. And the one-in-a-million person who does? They’re a narcissist with WAY bigger problems than your car.

But that fear is powerful for a reason. It’s been carefully nurtured by TV commercials and Instagram accounts with a singular goal—to make you buy things you don’t need.

Know this—you’ll gain far more respect by attending to your own financial needs than by desperately trying to keep up appearances.

Not asking for help when you need it. Let’s face it—you’re supposed to know how money works. Mastering your finances is symbolic of becoming an adult. There’s tremendous internal pressure to act like you know what you’re doing.

But were you taught how money works? Did a teacher, professor, or mentor ever sit you down and explain the Rule of 72, the Power of Compound Interest, or the Time Value of Money? If you’re like most, the answer is no. It’s a cruel double-bind—to feel good about yourself, you must master skills no one has ever taught you.

And that keeps you from asking for help. You get caught in shame, denial, and confusion. It’s hard to admit that you don’t know something that seems so basic, so essential.

But rest assured—you’re not the only one. And the right mentor or financial professional will listen to your story without judgement and seek to help you.

Procrastination. There are few things more daunting than staring at a pile of bills, an empty bank account, or an intimidating stack of paperwork. You know what you have to do. But it doesn’t happen because you’re so overwhelmed by the task ahead. And it’s especially daunting if you’ve never been how money works—you don’t even know where to start!

But nothing causes financial damage quite like procrastination. That’s because it causes exponential damage. Your bills pile up. Your interest rates rise. Your savings fall drastically behind, and you must save far more to catch up.

The antidote? Break the task down into smaller, manageable steps. Maybe that means signing up for Mint.com or working with a financial professional. That might mean automating $15 per month into an emergency fund, or cooking one dinner at home each week.

It doesn’t matter how small it is, as long as it puts money back in your pocket and stops the scourge of procrastination.

In conclusion, making financial mistakes is something that can happen to anyone. By knowing some of the most common financial mistakes people make and what you can do to avoid them, you’ll have more peace of mind when it comes to money management.

Common Financial Mistakes and How to Avoid Them

It’s never a bad idea to prepare for a financial emergency.

Unexpected expenses, market fluctuations, or a sudden job loss could leave you financially vulnerable. Here are some tips to help you get ready for your bank account’s rainy days!

Know the difference between a rainy day fund and an emergency fund … but have both! People often use the terms interchangeably, but there are some big differences between a rainy day fund and an emergency fund. A rainy day fund is typically designed to cover a relatively small unexpected cost, like a car repair or minor medical bills. Emergency funds are supposed to help cover expenses that might accumulate during a long period of unemployment or if you experience serious health complications. Both funds are important for preparing for your financial future—it’s never too early to start building them.

Tackle your debt now. Just because you can manage your debt now doesn’t mean you’ll be able to in the future. Prioritizing debt reduction, especially if you have student loans or credit card debit, can go a long way toward helping you prepare for an unexpected financial emergency. It never hurts to come up with a budget that includes paying down debt and to set a date for when you want to be debt-free!

Learn skills to bolster your employability. One of the worst things that can blindside you is unemployment. That’s why taking steps now to help with a potential future job search can be so important. Look into free online educational resources and classes, and investigate certifications. Those can go a long way towards diversifying your skillset (and can look great on a resume).

None of these tips will do you much good unless you get the ball rolling on them now. The best time to prepare for an emergency is before the shock and stress set in!

Are You Prepared For A Rainy Day?

There’s no doubt that credit card debt is a huge financial burden for many Americans.

On average, each household that has revolving credit card debt owes $6,913.¹ It might be tempting to see those numbers and decide to throw out your credit cards entirely. After all, why hang on to a source of temptation when you could make do with cash or a debit card? However, keeping a credit card around has some serious benefits that you should consider before you decide to free yourself from plastic’s grasp.

You might have bigger debts to deal with. On average, credit card debt is low compared to auto loans ($28,632), student loans ($58,309), and mortgages ($203,291).² Simply put, you might be dealing with debts that cost you a lot more than your credit card. That leaves you with a few options. You can either start with paying down your biggest debts (a debt avalanche) or get the smaller ones out of the way and move up (a debt snowball). That means you’ll either tackle credit card debt first or wait while you deal with a mortgage payment or student loans. Figure out where to start and see where your credit card fits in!

Ditching credit cards can lower your credit score. Credit utilization and availability play a big role in determining your credit score.³ The less credit you use and the more you have available, the better your score will likely be. Closing down a credit card account may drastically lower the amount of credit you have available, which then could reduce your score. Even freezing your card in a block of ice can have negative effects; credit card companies will sometimes lower your available credit or just close the account if they see inactivity for too long ⁴. This may not be the end of the world if you have another line of credit (like a mortgage) but it’s typically better for your credit score to keep a credit card around and only use it for smaller purchases.

It’s often wiser to limit credit card usage than to ditch them entirely. Figure out which debts are costing you the most, and focus your efforts on paying them down before you cut up your cards. While you’re at it, try limiting your credit card usage to a few small monthly purchases to protect your credit score and free up some extra funds to work on your other debts.

Need help coming up with a strategy? Give me a call and we can get started on your journey toward financial freedom!

¹ Erin El Issa, “Nerdwallet’s 2020 American Household Credit Card Debt Study,” Nerdwallet, Jan 21, 2021 https://www.nerdwallet.com/blog/average-credit-card-debt-household/

² Erin El Issa, “Nerdwallet’s 2020 American Household Credit Card Debt Study,” Nerdwallet, Jan 21, 2021 https://www.nerdwallet.com/blog/average-credit-card-debt-household/

³ Latoya Irby, “Understanding Credit Utilization: How Your Usage Affects Your Credit Score,” The Balance, Oct 5, 2021 https://www.thebalance.com/understanding-credit-utilization-960451

⁴ Lance Cothern, “Will My Credit Score Go Down If A Credit Card Company Closes My Account For Non-Use?” Money Under 30 Oct 1, 2021 https://www.moneyunder30.com/will-my-credit-score-go-down-if-a-credit-card-company-closes-my-account-for-non-use

Should You Get Rid Of Your Credit Cards?

Dealing with debt can be scary.

Paying off your mortgage, car, and student loans can sometimes seem so impossible that you might not even look at the total you owe. You just keep making payments because that’s all you might think you can do. However, there is a way out! Here are 4 tips to help:

Make a Budget. Many people have a complex budget that tracks every penny that comes in and goes out. They may even make charts or graphs that show the ratio of coffee made at home to coffee purchased at a coffee shop. But it doesn’t have to be that complicated, especially if you’re new at this “budget thing”.

Start by splitting all of your spending into two categories: necessary and optional. Rent, the electric bill, and food are all examples of necessary spending, while something like a vacation or buying a third pair of black boots (even if they’re on sale) might be optional.

Figure out ways that you can cut back on your optional spending, and devote the leftover money to paying down your debt. It might mean staying in on the weekends or not buying that flashy new electronic gadget you’ve been eyeing. But reducing how much you owe will be better long-term.

Negotiate a Settlement. Creditors often negotiate with customers. After all, it stands to reason that they’d rather get a partial payment than nothing at all! But be warned; settling an account can potentially damage your credit score. Negotiating with creditors is often a last resort, not an initial strategy.

Debt Consolidation. Interest-bearing debt obligations may be negotiable. Contact a consolidation specialist for refinancing installment agreements. This debt management solution helps reduce the risk of multiple accounts becoming overdue. When fully paid, a clean credit record with an extra loan in excellent standing may be the reward if all payments are made on time.

Get a side gig. You might be in a position to work evenings or weekends to make extra cash to put towards your debt. There are a myriad of options—rideshare driving, food delivery, pet sitting, you name it! Or you might have a hobby that you could turn into a part-time business.

If you feel overwhelmed by debt, then let’s talk. We can discuss strategies that will help move you from feeling helpless to having financial control.

4 Ways to Get out of Debt

Having a good credit score is one of the most important tools you can have in your financial toolbox.

Your credit report may affect anything from how much you pay for a cell phone plan, to whether you would qualify for the mortgage you might want.

Getting and maintaining a good credit score can be advantageous. But how do you achieve a good credit report? What if you’re starting from scratch? The dilemma is like the chicken and the egg question. How can you build a positive credit report if no one will extend your credit?

Read on for some useful tips to help you get started.

Use a cosigner to take out a loan One way to help build good credit is by taking out a loan with a cosigner. A cosigner would be responsible for the repayment of the loan if the borrower defaults. Many banks may be willing to give loans to people with no credit if someone with good credit acts as a cosigner on the loan to help ensure the money will be paid back.

Build credit as an authorized user If you don’t want or need to take out a loan with a cosigner, you may want to consider building credit as an authorized user of someone else’s credit card – like a parent, close friend, or relative you trust. The credit card holder would add you as an authorized user of the card. Over time if the credit account remains in good standing, you would begin building credit.

Apply for a store credit card to build your credit Another way to start building your credit record is to secure a store credit card. Store credit cards may be easier to qualify for than major credit cards because they usually have lower credit limits and higher interest rates. A store credit card may help you build good credit if you make the payments on time every month. Also be sure to pay the card balance off each month to avoid paying interest.

Keep student loans in good standing If there is an upside to student loan debt, it’s that having a student loan can help build credit and may be easy to qualify for. Just keep in mind, as with any loan, to make payments on time.

Good credit takes time Building a good credit report takes time, but we all must start somewhere. Your credit score can affect many aspects of your financial health, so it’s worth it to build and maintain a good credit report. Start small and don’t bite off more than you can chew. Most importantly, as you begin building credit, protect it by avoiding credit card debt and making your payments on time.

The starter kit for building good credit