Budgeting

What is the Best Way to Save for College?

So you, or maybe your child is about to embark on one of the most fulfilling, enriching, and maturing (not to mention almost a prerequisite to nearly all lucrative jobs). Awesome! But oh wait….you have to pay. With the average cost of college somewhere in the ballpark of $33,000 for a four year degree from a public school, or $119,400 for a private college (savingforcollege.com), being educated seems like it’s almost not worth paying. WRONG. Education is always worth it, as long as you know how to go about it. Below we cover some of the best ways to save for college!

Saving for College

First things first, before worrying about saving for college, consider your options. A cheap alternative to enrolling in a four year university for all four years, is spending your first to at a technical or community college. The cost of tuition is nearly always less than half that of public school tuition. Be sure to check with an advisor or dean though before registering because not all credits transfer. The best way to ensure your courses will count toward your degree is to call both schools, and find some common ground. Many community colleges have a transfer program in place.

Next, go to your state education homepage, and see what sort of grants and scholarships are offered for you. The best way to make sure you qualify is to do your FAFSA, by going to www.fafsa.ed.gov. This will automatically tell you what sort of financial aid you qualify for. Next, check with your school’s financial aid office. Check early! Many schools have scholarships from the institution in place, and they’re highly competitive, so the earlier the better. After you have exhausted those methods, check the web. Are you very tall or under 5’0″ tall? There are scholarships for that. Some of the best web sites to check are fastweb.com and finaid.org. These will give you information on many scholarships compiled by their databases. Also, many people never apply for scholarships because of the dreaded essay you many times have to write. College is a lot of essay writing, and the worst part? You have to pay to write them! Scholarship essays may seem drab, but consider this. If you are applying for a $1000 scholarship, and you have write your essay in say , three hours. If you get the scholarship, you basically just got paid $333.33 an hour. Way better then that theater major will ever get you.

On a last note about scholarship sites, remember all this information is available free. Any site trying to charge you for it IS A SCAM. Once scholarships are done, the dreaded job. You can try a work study through the school, which may or may not directly go to your tuition. Check with financial aid for employment. Also, many jobs offer scholarships after an allotted amount of worked hours. Some examples are Chick Fil A, which offers a $1000 scholarship after 2 consecutive years of part time work, or roughly 2000 work hours.

The How To’s of Paying Off Student Loans

Congratulations! You graduated. And you, like countless of other graduates, have pretty outstanding student loans to pay back. Although there is no magic button, there are a few smart money tricks to help along the process.

Firstly, take advantage of the fact that many loans do not need to start being paid until 6 months after graduation. This alleviates some pressure, but not all of it. Depending on the type of loan, interest may or may not accrue during these months. There is never any harm in paying both interest and principal before you need to.

Secondly, you may qualify for a loan deferment of forbearance. Deferments and forbearances mean that you do not have to pay off any of the loan for a specified period of time. Interest may or may not accrue, depending on your loan company. You must apply and qualify for a deferment. Reasons for qualifications include economic hardship, unemployment, enrollment in school, teaching certain under privileged populations (such as Teach for America), working in health care professions, or certain volunteer services such as Americorps.

Thirdly, there are a few ways to receive debt forgiveness. Programs like the aforementioned Teach for America often forgive a percentage (albeit not a very large percentage) of student loans. Of course, it is important that they offer forgiveness as the salaries are not competitive enough for you to be able to pay off your student loans and live comfortably.

Fourthly, try to pay more than the minimum. The more you pay per month, the less you pay over all. A huge part of making this possible is living slightly below your means. Having an inexpensive rent, not eating out frequently, and limiting unnecessary spending are all factors that help you put a little more towards loans. Paying off loans in a shorter term period of time is like investing in your long term future. The more principal you pay off monthly, the less amount of interest you pay off in the long run.

Lastly, never be afraid to call your loan company to see what they can do for you. They are there to help–and to make sure that you do not default.

Holiday Shopping: The Season Comes Around Again!

It’s that time of the year again, a time when all is good cheer and free spending. It is, of course, a time that retailers look forward to, and for possibly slightly different reasons, shoppers as well. Spending and general expenditure goes up considerably during the holiday period, and the inevitable January slump is almost typically predictable as disposable incomes have had a bite taken out of them by that point.

Holiday Gifts

The question we are attempting to answer, is, what makes for reasonable spending during the holidays? What would be the wise thing to do with regards to one’s budget and finances, while at the same time ensuring that one gets to enjoy the holiday as well?

Before letting the bewildering frenzy of advertising, sales and seemingly amazing store deals get you into buying what you did not necessarily need in the first place, take stock on your situation and think through it carefully. Certain aspects need to be examined:

1. What do you really need, in the medium and long term? You will usually have a list of these items anyway. Are they part of the current sales promotions? Then getting them at discounted prices may be worthwhile.

2. What will actually be needed for the holiday season? Certain items, like gifts and food and drink are a no-brainer, as are decorations (or the children will never forgive you!) but these should be itemized specifically in an itemized list, to avoid impulse spending.

3. What can wait till after the holiday season? There are a number of obvious reasons for this perspective. One is that it will free-up some cash flow so that the sending that is necessary is actually done for the holidays. Another is the inevitable sizable discount process that happens in retail outlets across the country after the holidays are over. It certainly makes budgeting sense to wait until prices sky-dive before deciding to spend on that wide-screen TV you had been hankering after.

4. What can be bought in bulk? A lot of bulk sales actually go on during the holiday season, and these, as well as coupon sales, are often ignored or overshadowed by the retail sales blitz. Soft drinks, clothes, dry food items as well as fresh foods that require cold storage can easily be found at really competitive prices if one bothers to look carefully. And after the last two years, one lesson learnt is that it does pay to be careful with your money.

5. More importantly, holiday requirements rarely change drastically. A plan where you controlled or managed your spending from last year will, with a few alterations, fit into what you have this year, assuming of course, that your income has not fluctuated drastically. Thus, a good spending plan is like a good habit. If it worked the last time round, pull it out, dust it off and give it another go. That will have you actually looking forward to the traditionally lean periods after the holidays.

Most importantly, be wise with your spending, as cautious with your money as you have been all year. The holidays are simply no excuse to let your guard down.

Happy holidays!