August 20, 2017

Simple Ways To Save Smart And Avoid Student Loan Debt

The student loan debt crisis is making headlines and while many face a future of large bills, JB Orecchia, CEO of SavvyMoney, shares simple ways for both parents and students to plan ahead and avoid being buried in student loan debt.

 

Create Your Financial Business Plan Now And Stick To It:

  • Start saving as much as you can as early as you can. Even the small amounts add up over time, so start saving early!
  • Students should take into consideration how much they expect to earn in the future. This means picking a major that has a high possibility of paying off. If their dream career is not one with a large salary, students should have a realistic understanding of what they expect to make and select a college education that is realistic too.
  • Apply for scholarships and grants. There are a surprising number of grants and scholarships available, and a little legwork, essay writing, and time spent now can have tremendous value in the future.
  • Don’t forget about interest. Be sure to include the interest costs into your calculatlations when determining the amount of additional funds you will need.
  • Students should work enough to offset expense, but not so much that it impacts their grades. Keep in mind attending college is about maximizing education.
  • Try not to extend college beyond 4 years, your goal is to get in into the work force and maximize earnings.

 

Instill Smart Saving Habbits Early In Life:

Just like parents should start planning and saving for their children’s college education early, they should also teach their children to do the same. Teach them to start saving money from those after-school and summer jobs, but above all save consistently to start building a lifetime habit of saving. Open a Roth IRA for your children and help fund it if you can, teaching them the value of saving. This is a great way to teach children the importance of growing their money without taxes to help buy a first home, put their kids through school, or fund their own eventual retirement.

 

Guide Your Student To Success:

Remember that unlike college, there is no financial aid for retirement, so you must plan for your future too. Generally saving for retirement comes first and college for your kids second. Parents should take a good hard look at how much they’re going to be able to contribute to college, then aim to have their student borrow no more than they expect to earn in the first year out of school. A child should have some idea of what their career may earn. The best way to do this is by applying to schools with a wide range of price tags. If aid in the form of grants doesn’t come through from the priciest schools, you will have other options that are either cheaper or more generous to choose from.

 

Students, Remember This Is Your Education And You Must Be Ready To Contribute:

  • Try to find colleges that give you the best deal.  
  • Work while you’re in school to supplement costs and cover expenses.  
  • Consider two years at a community college then transfer those credits to a four-year school (that can cut the cost of college almost in half).  
Communication is Key:

Above all, get everyone on board with the needs of the family early so that there is some understanding about what is going to happen.  That will at least help to minimize the resentment in the family.

 

JB Orecchia brings over 22 years of experience in consumer finance and interactive marketing to the SavvyMoney team. Throughout his career, he has worked with consumers in the financial services sector and has developed an understanding of what’s important to consumers as they make important financial decisions.

 SavvyMoney.com is the web’s best resource for paying off debt with a fully-automatic debt reduction plan dedicated to helping individuals get out of debt fast. Follow SavvyMoney on twitter at @SavvymoneyTip for a chance to win $100 cash and for daily money tips. 

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