Planning for Back-To-School

There are many changes occurring as millions of us head back to school. With so many changes, it is a good time to review financial plan. It is also a good time to discuss financial responsibility with children whether they are going off to college or starting Kindergarten.

During this time of year, it hit home just how much we spend on getting kids back to school. There are new gadgets to buy, clothes, shoes, school supplies, books, tuition, etc. that we spend our money on during back-to-school time. It is important, especially this time of year, to set a budget and keep it. Showing kids how to be financially responsible can start at a young age, and the knowledge will prepare them for the future.

To start create a family budget that include money for the extras of back-to-school, and keep to the limit set. If children are old enough to have and use credit cards, set a responsible limit, while allowing them the freedom to choose what they want to buy. A good way to do this would be to give them a prepaid card that has a specific limit. When the money is gone, it is gone. Make them earn more before you put more on the card.

Teach children to protect their personal information. Anyone at any age can be exploited and be a victim of fraud. Teach them to use secure passwords, and only use social security numbers if required.

For parents of children of any age, it is time to start a saving plan for college. It is never too late to start and never too early either. College can be financially draining to the college student and parents. By planning and saving even a little, it will help alleviate the cost burden of college. If starting early enough calculate cost for tuition, books, housing, etc. and set your saving to reflect the cost. Periodically check the total and adjust where needed.

By taking some small steps, financial responsibility can be achievable for anyone, including children and young adults.

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College Loans: Paying Them Off

Now that you are a college graduate, you have many things to think about; finding a job, maybe a new place to rent, and paying off student loan debts. With all the talk about student loan interest rates in Congress, it is important for student have a plan for paying off loans after college. Nearly 12 million students will take out loans to help pay for college, and with 37 million students currently with outstanding debt, the total student loan debt is reaching towards 1 trillion. Having a plan to help reduce student debt loan is vital for any college graduate.

Most college students do not fully understand the financial burden student loans will be on their future. Around 75% of them will make sacrifices, either personally or financially, to repay the loan. Some tips that will help make it easier to repay student loans debt are:

  • Understand You Options. It is important to know the different options of payment, including standard repayment, graduated repayments, extended repayment, and income-based repayment. Research which payment would work best for you and contact you lender for financial help. If you cannot pay there are options for you including deferment, forbearance, and loan cancellation. Many of the option will require an application and financial proof, so working with your lender is very important.
  • Keep Track of Paperwork. Keeping accurate records including promissory notes, correspondence from lenders, notes on phone calls and other loan related paper. If you lose any paperwork, you may have problems providing information to your lender if you need to seek a deferment, forbearance, or loan cancellation.
  • Grace Period. Most student loans have a 6 to 9 month grace period before official payments start. Use this time to find a job, make a budget and start tracking your monthly expenses. Make sure to budget in paying student loans, so you are not surprised when the payments begin.
  • Student Loan Interest Deductions. If you pay $600 or more to a single lender, our interest is deductable. At the end of the year you will receive Form 1098-E from your lender showing the exact amount of interest paid over the year.
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