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Debt Management

The average student graduates from college with student loan debt totaling about $20,000. Developing a workable budget is the only way to get a firm grip on cash flow to ensure that financial obligations, including student loan repayment, are met, now and in the future.

Where do I start?

  • Track your spending for a month or two in a log book.
  • Use the book to break income into fixed and flexible.
  • Categorize expenses in the same way.
  • Arrange income in one column and expenses in another.
  • Total the columns and compare them.

What does it mean?

  • If the calculation results in a negative number, it's time to re-evaluate your spending practices.
  • Eliminate items beginning with variable expenses.
  • Keep going until the calculation results in a positive number.

How do I live on a budget?

  • Small efforts mean a lot.
  • Cut your coffee shop visits in half.
  • Don't eat out so much.
  • Walk, ride your bike, car pool.
  • Take advantage of student discounts.
  • Put off large unnecessary purchases.

What next?

  • Start saving!
  • A standard rule is that everyone should have a minimum of three to six months' wages in a savings account.
  • Don't touch!
  • If you do borrow, replace it as soon as possible.

How do I identify my financial goals?

  • Make a list of things you want or need.
  • Prioritize them.
  • Be sure to consider all the surrounding factors. (For example, if you want to buy a car, consider the cost of gas, insurance, repairs, etc.)
  • Start working toward attaining them.

What about credit cards?

  • They can be an asset if used properly.
  • They help establish good credit rating.
  • They can be used in emergencies.
  • They are an alternate form of identification.
  • They can be used to hold hotel or plane reservations.

On the other hand...

  • Imprudent credit card use can result in bad credit rating.
  • They are an expensive way to borrow.
  • Credit cards make it easier to make impulsive, unnecessary purchases.

How can I use them responsibly?

  • Don't get to the point where you can't pay off your bill in full in a month or two.
  • Save up for expensive items and pay for them with cash!
  • Establish an "emergency use only" policy.

What if I get into trouble?

  • Start by paying down the cards that charge the most interest first.
  • Remember, all is not lost. You aren't the first person to find yourself here!
  • Plenty of reputable debt counseling services are available.

What happens to my student loans after graduation?

  • Grace periods come to an end six months after you graduate and your loans go into repayment.