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Monthly Archives: March 2017
4 Tips to Help Manage Student Loan Debt
If you’re a recent college graduate who took out student loans, you likely owe about $35,000. As eye-popping as that average debt figure is, you’re certainly not the only one wondering how you’ll possibly get out from under your loans. As with any difficult assignment, though, research and a well-thought-out plan will help you tackle even the most challenging of debt situations.
Making use of the following strategies will help you dig your way out of student debt. Here’s a look at where to get started.
Know what you owe
First things first: Figure out what your monthly payments should be. To do that, use one of a handful of repayment calculators. These tools let you plug in the total amount that you owe along with your loans’ interest rates and term lengths. You’ll get a better sense of how much you should be paying each month if you want to take care of your debt within a certain amount of time.
Adjust your monthly budget accordingly
Knowing how much money you’ll need to put toward eliminating your student debt each month will help you adjust your budget. That may mean making tough decisions like cutting back on nonessential expenses.
Remember: Every extra dollar you put toward your debt reduces the total amount of interest you’ll end up paying over the life of your loan, so it’s well worth the effort.
Consider automatic payments
To ensure that you make your monthly payments on time, set up automatic deductions from your checking account. The way it works is easy: Your student loan servicer simply subtracts what you owe from your account whenever your payment is due. Your lender may even offer you a discount if you choose this option, which can be much more convenient than writing and sending a check every month. Just be sure that there’s enough money in your checking account so that you aren’t hit with overdraft fees.
Switch up your repayment plan
If you’re still struggling to put money toward your student debt, consider changing your repayment plan on federal loans, which you can do whenever you want. You may, for example, opt to switch from standard repayments —which have you contributing a set amount each month over a period of about 10 years — to graduated repayment, which is when your payments start out lower and increase over time.
Extended repayments, on the other hand, give you additional time to pay back your loans, sometimes up to 25 years, if your debt is more than $30,000 and you meet certain other requirements. Other plans, aimed at borrowers whose federal student loan debt is high relative to their income and family size, are income-based. If you qualify, the payments you owe are based on how much you earn every year. Although any of these plans can ease your monthly payment, you’ll end up paying more for your loan over time than you would if you had stuck with the standard 10-year plan.
Private lenders typically have stricter policies, but it’s still worth checking to see whether there’s any way to adjust your repayment plan with them.
If you’re a teacher or a public servant, you may qualify for student loan forgiveness. Otherwise, your last resort may be opting for forbearance, which means you can stop or reduce payments for a month or two. However, because interest continues to accrue, this course of action is better avoided.
With all that said, what you definitely don’t want to do is default on your loans. When you do that, the entire unpaid balance of your loan is due immediately, and you also lose the right to defer or change your repayment plan.
Breaking down the repayment process into smaller steps will make your student debt feel less overwhelming. Although it may take several years to wipe it out completely, a carefully crafted plan will set you up for success down the road.
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Join us on April 25, 2017 at 6pm for a FREE student loan webinar, How to Prepare, Pay and Stay in College. Register now to secure your spot!
What are the differences between private and public student loans?
With the cost of a college education continuing to skyrocket, more students than ever depend on financial assistance to help cover their educational expenses. Financial aid is money that is available to students to help pay for attending a post-secondary institution in the United States. There are a variety of financial aid tools available to students, including grants, scholarships, need-based awards, work-study employment and student loans.
Types of student loans
Based on eligibility requirements and some limitations on the federal financial aid products, many students compliment their award package with a subsidized or unsubsidized federal student loan, both of which are offered through the U.S. Government.
Private student loans are another method students use to pay for college. These are offered through lenders, such as banks, credit unions, and companies, such as Sallie Mae, as well as through schools.
Public vs. private loans
There are substantial differences between public and private student loans, as we’ll look at here, but both are designed to help students sufficiently fund their education. As a general rule, private education loans serve as a supplement to the federal loan option.
- Federal loans offer a fixed rate that is the same for every borrower. The interest rate for a private loan varies based on an index rate plus a margin, and the margin is based on the credit rating of the borrower.
- A subsidized federal student loan doesn’t need to be paid back until after the student graduates, and the government will pay the accrued interest up to 6 months after graduation. An unsubsidized federal student loan acts the same, but the student is responsible for paying the accrued interest. Private loans, however, have a variable interest rate, so students are encouraged to repay the interest while they’re still in school.
- All federal student loans come with terms that protect the borrower if they lose their job, go back to school or experience another economic hardship. If you don’t qualify for a deferment, federal loans have an additional check, called forbearance, which can place repayment on hold due to illness or by meeting other requirements.
- Private loans do not allow borrowers to put their payments on hold. However, if you experience a hardship, you can appeal to the lender for a deferment or forbearance.
- Federal loans offer seven repayment options, including standard repayment, which satisfies the debt in 10 years, and flexible pay-as-you-earn plans that allow you make payments based on how much you earn. Private loans typically provide two repayment options, standard and extended.
- If you are disabled, go into public service or teach in some low-income areas, all or a portion of your federal loans can be forgiven or discharged. However, federal student loans are generally not dischargeable in bankruptcy. Private student loans are usually not dischargeable in bankruptcy, and the federal programs that allow you to discharge the debt when you go into public service or social work do not apply to private student debt.
Is a credit union better than a bank?
Have you ever wondered if a credit union is better than a bank? The choice between the two will ultimately boil down to the different products, services, and fees each one offers and what components are most important to you as a customer. Let’s look at some key differences between banks and credit unions, so you’re able to decide which works best for you.
The fundamental difference between the two institutions is that a credit union is a not-for-profit institution owned by its members. Their mission is to provide their members with affordable financial services. Banks are corporations controlled by board members and owned by shareholders. Credit unions traditionally use their not-for-profit status to offer higher interest rates on savings accounts and CDs and lower interest rates on loan and credit cards.
One of the most noticeable differences is the discounted or absence of fees from many of the products offered by credit unions. At a time when many banks have raised their minimum balance requirements, the large majority of credit union checking accounts still do not require a minimum balance and don’t incur any fees. In fact, credit unions make every effort to keep their fees low, including eliminating products and services instead of adding fees. If you’re familiar with the fees that banks typically charge for direct deposits, transfers, wires, and balance transfers, you’re not likely to find them at a credit union.
It’s of the utmost importance for credit union representatives to establish a relationship with each of its members. If you’re looking for personalized attention, credit unions are less formal and work hard to deliver a superior level of customer service. It’s a people-centric business whose top priority is the best interest of their members.
Online and mobile functionality
For years, credit unions were substantially lacking in online manageability. Given some recent attention, however, many have made great strides in technology and what they’re able to offer. Members should have the ability to view account balances, initiate transfers and make online loan payments, which are the most requested transactions by online users. In addition, many credit unions offer a mobile check deposit feature that allows you to safely and securely deposit your check from your mobile device anywhere, anytime –all without visiting an ATM or a branch office.
The biggest benefit of a credit union membership is likely its loan products. Because of its cooperative structure and genuine concern for the financial well-being of its members, a credit union doesn’t have to charge high-interest rates to turn a profit. Generally, loans offered by a credit union are less expensive. Some even offer the option to skip a month’s payment without incurring a penalty.
A personal choice
Doing business with a bank or a credit union is a personal choice. Is it the financial perks, the online services, the style of service, and the number of branch locations that you value the most? Does the type of ownership, the size of the company and their mission matter to you? Weigh these factors to help you decide which option will work best for you and your hard-earned money.
Tax Tips for First-Timers
Filing your taxes for the first time doesn’t have to be scary – and, in fact, it shouldn’t be. The key to overcoming uncertainty in many situations is educating yourself and being prepared. Following these simple steps will help make filing for the first time a breeze.
Organization is key
Before you can file your taxes, you’ll need to have the proper forms. At the very least, this will include a W-2 from each workplace you earned a salary. You may have more than one W-2 if you worked more than one job, or you may have a Form 1099 if you received income from another source.
You may also receive other tax forms, such as Form 1098-E if you are paying interest on any student loans. Most tax forms arrive by late January or early February, and you must wait to file until you have all of the proper documentation.
Credits and deductions are your friends
Tax credits and deductions are imperative in increasing the amount of your refund (or lowering the amount of taxes you owe). Below are a few credits and deductions you might qualify for. More information for each write-off can be found here.
- Earned-Income Credit: This credit benefits low- to moderate-income earners by reducing or eliminating the taxes paid. There are income limits depending on the number of dependents you have.
- Job Search Expenses: While you can’t deduct job search expenses if you’re searching for your first job, you can deduct some expenses if you are looking for a new job within the same field. Résumé costs, job placement agency fees, travel expenses are some items you may be able to write off.
- Cost of Moving: If you moved due to a job change or started a new job, you may be eligible to deduct some of the expenses associated with relocating.
- Lifetime Learning Credit: If you’re paying out of pocket for your college education, you may be able to deduct some of those expenses.
- Retirement Saver’s Credit: This credit helps low- to moderate-income earners save for retirement.
- Home Office Deduction: If you work from home on a regular basis, you may be able to write-off some of the expenses associated with your home office based on the percentage of your home used for business activities.
- Energy-Saving Credits: Qualified energy-saving additions and improvements, such as appliances or adding energy-efficient windows and doors to your home, may earn you a credit on your taxes.
Online or in-person: how should you file?
For many Americans, filing taxes is free. Online software like TurboTax, H&R Block, and TaxAct are great choices if you feel comfortable taking things into your own hands. These services often guide you through the process step-by-step and can help catch missing information, as well as alert you to credits and deductions you may qualify for based on your individual tax situation.
If you’re hesitant to file on your own, consider taking your tax documents to an accountant or other tax preparation office. However, do your research so you don’t fall victim to tax scams – always be wary of tax preparers who base their fees on the size of the refund they can get you.
Now that you’ve gotten all your documentation organized, researched tax write-offs, and decided whether to file using online software with the help of a professional, it’s time to actually file your taxes. The deadline to file your taxes, which is set by the IRS, is April 18, 2017. You don’t want to wait until the last minute to file (plus, the sooner you file, the sooner you’ll receive your refund!), but if there is a situation that will prevent you from meeting the April deadline, you can file for an extension.
If you do choose to file for an extension, you’ll need to fill out Form 4868, which will give you an additional six months to file. The extended deadline this year is October 16, 2017.
If you’re filing for the first time, don’t wing it. Taxes are a major part of your adult life, and not being prepared could mean losing out on money owed to you or even worse – owing more money to the IRS. Educate yourself and you’ll set yourself up for a healthier financial future.
Behind the Mic with Brian Moote
A recent transplant from Los Angeles, Brian made the move across the country to join The Bert Show, alongside show veterans Bert and Kristin, a little over a year ago.
We chatted with Brian about how he’s adjusting to life in Atlanta, his work on radio and on stage, and his unique talents. Find out how this once-aspiring bulldozer operator became a radio and comedy star.
How did you get your start in radio?
I got into radio while living in Los Angeles as a comedian. I was on the road and an opportunity opened up to audition in Seattle. I sent in some demos from various radio shows that I had done around the country while touring in radio, and the station liked it a lot so they offered me a cohost position on their new morning show. It was called “Mornings with Jackie, Marco and Moote” on Click 98.9 FM.
Was being in radio a childhood dream? What would you be doing if you weren’t in radio?
My dream as a child was to play professional basketball or be a bulldozer operator. My mom was less keen on the idea of me driving tractors. If I wasn’t in radio, I would be touring the country as a comedian or using my master’s degree in social work to help at-risk youth.
You moved across the country to join The Bert Show – what about the show convinced you to make the move?
Making the decision to move across the country from Los Angeles to Atlanta was a pretty easy one. The Bert Show is nationally known as a unique and cutting-edge morning show in Top 40 formats. It is rare to find a morning show that has as much talk time and story development as The Bert Show does. Joining the show was the right choice for me because it is a place in where I can both entertain people in the mornings, as well as learn about radio and grow as a personality.
What’s the biggest challenge working in radio?
Balancing all the things that I do for the show and my life outside the show. It can get difficult to put the right amount of effort into all areas of your life and not let something suffer. Like for me, I perform stand-up comedy 3 or 4 nights a week, which can make early mornings tough on my creative process for both comedy and radio.
What’s your favorite thing about The Bert Show?
My favorite thing is how many great listeners we have and getting to meet a lot of them when I am out and about in the community or at my comedy shows.
What’s been the coolest thing you’ve gotten to do thanks to The Bert Show?
Hands down, the coolest thing that I have been able to do as a member of The Bert Show is attending the Super Bowl, even though the game didn’t go the way that we wanted. It was a crazy experience going to all of the fancy parties and goofing around at the NFL Experience. The coolest part of the whole trip was that my brother and I did not have game tickets — we were basically just out there to experience the parties and the vibe of the weekend. When we got to a tailgate party at the stadium in Houston, we met Falcons owner Arthur Blank’s security staff who he sent out to the game. We told them that we didn’t actually have tickets and they contacted Arthur and got two single tickets for us. They were all amazing people.
If you could interview anyone, who would it be and why?
Hmmm… That’s an interesting question. I am not a big fan of most interviews. They are difficult to do because our job is to get the person to say something interesting that nobody has heard and it’s their job to basically say nothing and promote something. I think if I had the option to interview anybody, I would go with Barack Obama right now. I feel like since he’s out of office now, you might actually get some good answers about what he actually thinks.
What’s a typical day in the life of Brian Moote like?
A typical day for me begins about 4:30am, and I head to the station at 5am. We have the show from 5:45am to 10am, and then I have to get into post-show stuff, like meetings, cutting commercial spots, preparing material for the next day, etc. I generally get out of the station around 12pm and I head home to take my dog Moxie (little Chihuahua mix) out for a walk, and then I get a nap in for an hour or so. Naps are huge for me because I generally do stand-up at night. At about 2pm or 3pm, I try to get some exercise in, sometimes a long run, or a workout class in the area. In the afternoon, I end up working on radio and comedy things for a couple hours and then about 7pm, I head to one of the comedy clubs in the city and work on some jokes.
How did you get into comedy? Is it hard to balance your comedy career with your radio career?
I got into comedy after I got out of college and moved back to Seattle to teach Special Ed. My mom had always told me to do comedy because I was a good storyteller. I was incredibly nervous to go on stage for the first time because I have always hated public speaking. After that, I kept getting on stage every night for the next few years and eventually started getting paid to do it. The balance between stand-up and radio is difficult. One reason is that the hours are opposite, so you’re basically living your life in a split shift with sleep in between. For me, it is really important to devote time to both individually, in terms of developing material. There is some crossover in both, but it’s important to approach them separately because the style of delivery is different. I try to devote an hour a day to stand-up writing and other stand-up projects completely outside of The Bert Show.
Which comedians influence you the most?
The comedian that inspires me the most is Bill Burr. His style and material, I relate to pretty well. He likes to take stories from his life and tough social topics and turn them into jokes, which I respect. He is actually the reason that I went to Boston instead of NYC for graduate school and comedy. He told me it was a city that would really help you find your comedic voice and he was correct.
Where do you draw inspiration from for your comedy?
It sounds cliché, but I get my material from my life and the world around me. Generally, all of the things that I talk about on stage come from an experience I had or thought about. Of course, the jokes get ridiculous because I embellish on them and add new aspects. The one thing for me is that I have to relate to the material or I find it boring. I am not a huge fan of just jokes for joke’s sake. I still write those types of jokes for social media, but they usually don’t make the cut for my onstage act.
You’ve previously worked in special education and with at-risk youth – is that something you’re still involved with?
I am still involved with a lot of organizations that not only work with special needs and at-risk youth, but a variety of causes in the greater Atlanta area. At this point in my career, I mainly work with helping organizations raise money and awareness for their cause. If people want to either get involved with non-profits, or have a non-profit that they want me to help out with, the best way to get in touch with me is through e-mail or on social media.
How are you adjusting to life in Atlanta? What’s your favorite thing to do in the city?
I love Atlanta so far, it’s a city with a ton of fun neighborhoods. My favorite thing to do here is explore since I am new to the city. I really enjoy riding my bike or jogging around exploring.
It’s no secret Georgia’s Own and Ne[x]t are all about making smart financial choices. Why do you think it’s so important for the younger generation to learn about managing money?
I think that it’s huge for young folks to manage their money because I think a lot of the financial resources that older generations have are starting to dry up and I think that it is important to plan for your future independently so you don’t have to depend on other programs.
Do you have any tips or tricks to help keep your finances in check?
The only tip that I have is not to ignore things. It can get too easy to just ignore your finances when you get stressed out by life. I let a student loan go into default when I was 23, and it took me a few years to get back on track and organized.
Just for fun – what is one thing about you that many people might not know?
I can juggle and ride a unicycle. I learned how to do those things when I was a clown in 4-H in third grade. Yes, that is right, I was a clown in 4-H and I dressed up as a hobo clown and walked around the Island County Fair entertaining people.
Listen to Brian live on The Bert Show on Q100 every weekday morning from 5:30 – 10:00 or connect with him on Facebook (@MooteComedy) and Twitter (@MootePoints).
When should I start saving for retirement?
When you are young, retirement is likely the last thing on your mind but planning for it shouldn’t be. The earlier you start saving, the more time your money has to grow and the more financially healthy you’ll be in your retirement years.
The magic of compound interest
The biggest benefit to starting early is the value of compounding interest. Compounding interest is when the earnings of an investment are reinvested into that same investment and continue to grow. It’s like earning interest on interest, and it can lead to substantial investment rewards. The critical component in compounding is time. In fact, the amount of time you have even outweighs the amount of money you invest.
Here’s an example: let’s says you want to start saving and invest $1,000 with the credit union. You also decide to save $150.00 each month after that. After 30 years, assuming the average interest you’ve earned is around 5%, you’ll have over $125,000! The total amount of money you invested was $55,000, but through the magic of compounding interest, you were able to earn an additional $70,000.
If you follow the same scenario but only save for 15 years, your total is only $40,000, and your net return is $12,000. Those extra years make a BIG difference so the sooner you start, the better. Want to run the numbers for yourself? Check out this calculator to see what compound interest could do for you.
If you do want to start investing, here are two common ways to get started.
Ideally, you’ll be able to start saving as soon as you begin earning a paycheck. If you employer sponsors a 401(k) plan, that’s a smart option, especially if they offer a matching contribution. The money you contribute to the plan is automatically deducted from your paycheck and deposited into your 401(k) account before it’s taxed which allows you to save a little more. It also lowers your current tax liability since you won’t have to pay taxes on the contributions or the earnings until you take a distribution from the account. Generally, a company will match your contribution to the plan up to a designated percentage. It’s essentially free money so the sooner you take advantage of this benefit, the better.
Another way to start saving for retirement is by contributing to an IRA. With a Roth IRA you contribute after-tax money to the account, but any money withdrawn later is tax-free. You can also arrange for a monthly direct deposit into your Roth IRA which will help you stick to a savings plan. If you’re self-employed, you have the option of opening a SEP IRA. You won’t have the benefit of a company matching contribution, but it will still offer the ability to save on a tax-deferred basis.
The sooner, the better
When it comes to compounding, time is your friend. The smartest step you can take today is to start saving for tomorrow. It doesn’t take a lot of effort, especially since most retirement savings plans are set up for automatic investment. Just remember, the earlier the better because tomorrow will be here sooner than you think!