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Monthly Archives: September 2023
How to prepare for student loan repayments
Federal student loan payments will resume after a three-year-long payment pause. Many were hopeful that their loans would be forgiven altogether, but with the forgiveness plan being struck down, this means most people will resume student loan payments come October 1st. With 43.6 million Americans having federal student loan debt, you aren’t alone if you’re worried about how this will affect your finances. We have a few helpful hints below for you to prepare for student loan repayments.
Determine your monthly payment
You should have received a bill from your servicer that contains your payment amount, payment due date, and upcoming interest. If you don’t know what your monthly payments will be, you can visit your servicer’s website to see your payment amount once your bill has been sent. However, many borrowers’ loan servicers changed during the payment pause. If you’re unsure who your servicer is, you can log in to studentaid.gov.
Rework your budget
A common budgeting method is the 50/30/20 method. Fifty percent goes towards needs, like a mortgage or rent, utilities, and loan payments, like credit cards and (you guessed it) student loans. Thirty percent goes towards wants, like going out with friends or other entertainment. Lastly, 20% should be allotted towards your savings, like an emergency fund.
Once you’ve mapped out your expenses, weave in your student loan payment. If you’re stretched too thin, see where you can cut unnecessary spending, such as unwanted subscriptions or unused gym memberships.
If your payments are too high…
Consider refinancing to get a lower monthly payment if it makes sense. If you would save money, or if you have loans with high variable rates, refinancing may be a good option. But, keep in mind that refinancing federal loans makes them ineligible for federal loan forgiveness programs, like Public Service Loan Forgiveness and Teacher Loan Forgiveness.
If refinancing isn’t the best option for you, see if you’re eligible for an income-driven repayment plan, like the new SAVE Plan. The SAVE Plan replaced the Revised Pay As You Earn (REPAYE) Plan.
Like most income-driven repayment plans, the SAVE Plan calculates your monthly payment based on income and size. Under this plan, single borrowers making $32,800 or less or a family of four earning $67,500 or less won’t owe loan payments, nor will interest accrue.
Eligible loans for the SAVE Plan include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans that did not repay any PLUS loans made to parents. You can apply for the SAVE Plan using the income-driven repayment plan application.
Enroll in auto pay
If you haven’t already, enroll in auto pay. Auto pay for student loans is optional, but it’s a great way to ensure you won’t miss payments. It also means more savings—borrowers enrolled in auto pay save 0.25% on their interest rate. With those savings, you could contribute more to your retirement plan or pay off high-interest debt.
Let’s say you have $30,000 in student loan debt at a rate of 5.75% APR with a monthly payment of $329—that would come out to $39,517 over 10 years (the standard loan repayment period), including $9,517 in interest. If you enroll in auto pay, your rate will be reduced to 5.50% APR. With the same monthly payment at a lower rate, you could not only pay your student loans off two months sooner, but you’d also save around $640 in interest over the life of the loan!
What if you still can’t make your payments?
If you’ve tried budgeting and you’ve applied for income-driven repayment plans but your payments are still too high, you have some time to get your ducks in a row. With payments resuming, there is a 12-month onramp period. You won’t be penalized for not making payments, meaning your loans won’t go into default and your credit won’t take a hit. After one year, you’ll have to resume payments or risk default. However, interest will still accrue during the onramp period. It buys you time, but it’s best to make payments if you can to avoid increasing the amount you owe due to interest accrual.
Preparing for student loan repayments can be daunting, but it’s important to have a plan in place. By following the tips above, you can ensure you’re financially prepared to resume payments. Be patient and understanding with yourself—it may take some time to adjust to making student loan payments again. Don’t be afraid to ask for help if you need it.
If you’re still struggling to make your payments, there are resources available to you. You can contact your loan servicer to discuss your options, visit the Federal Student Aid website for more information, or even apply for our Student Loan Payoff contest. We’re awarding three deserving people $10,000 each, for a total of $30,000 in relief. Our first two winners have been selected, and our final winner will be announced in December!
Should you open a joint bank account with your partner?
Whether you’re newlyweds or long-term partners, one of the biggest questions people often ask is if they should have a joint bank account with their significant other. Money can be a touchy subject, especially in relationships, but it’s necessary to ensure you’re on the same page. Money is the number one subject couples fight about, and it’s the second-leading cause of divorce. Every couple’s situation is different, but below are a few points to contemplate if you’re on the fence about opening a joint bank account.
Why have a joint bank account?
Joint accounts can make managing money easier when your funds are in one place, especially if you’re using it to pay for bills like a mortgage, rent, or utilities. It also makes sense to have a shared account if you’re saving for a common goal, like a down payment on a house or a vacation.
Joint accounts also promote trust and shared decision-making. Spending can be viewed by both parties, plus you’re working together to budget your money and make decisions about your finances.
In addition, each account holder is federally insured by the NCUA (or FDIC outside of credit unions) for $250,000—a total of $500,000 if there are two account owners and no other beneficiaries. This allows you to maximize your NCUA insurance. For example, if you have an individual CD in addition to a joint checking account, your CD is still entitled to $250,000 in NCUA insurance—meaning all of your deposits are insured up to $750,000.
When joint accounts don’t make sense
A joint account may not be the best choice if you have drastically different spending habits. If one person is a spender and the other is a saver, it could potentially lead to conflict. In that case, consider opening a joint account for bills only and have individual accounts for your “fun” money.
A shared account is also not ideal if one partner has significant debt. With separate accounts, you can ensure the more financially responsible partner is protected if debt collectors come knocking on your door. If you have a joint account with rights of survivorship (which is common), then the responsibility of the account is placed on one partner if the co-owner passes away. Your account could be seized for that debt, depending on where you live.
Lastly, if one partner is paying alimony or child support, separate accounts may be best to keep track of those payments.
What to consider before opening a shared account
Some serious (and maybe not-so-fun) conversations must happen before you dive into joint account ownership. In addition to considering each other’s spending habits, you should evaluate how you communicate. Strive for open conversations and transparency with your spending and budgeting.
It’s important to take your partner’s funds into account, too, because it’s no longer just your money. For example, it’s probably a good idea to inform each other of big purchases that you need (or want) to make, like a new gaming console or home improvements. Discuss how the funds will be used, as well as whether or not you can afford it in the first place. Consider agreeing to an amount you can spend without consulting the other person (still keep your spending in check, though).
How to open a joint account
Opening a joint account is easy. You can open an account online or in person at your nearest Georgia’s Own branch. You’ll need your and your partner’s Social Security number, birthdate, mailing address, and ID, plus how you’ll fund the account.
Pros and cons of shared accounts
- Reduces the hassle of paying bills when your funds are in one place
- Allows you to save toward a goal together
- Promotes trust and shared decision-making
- Each account holder is NCUA insured up to $250,000—a maximum of $500,000 for two account holders
- You could potentially be responsible for a partner’s debt
- Less privacy surrounding your spending
- Both of your spending needs to be accounted for
Whether or not to open a joint bank account is a decision that should be made on a case-by-case basis, depending on your circumstances and your relationship with your partner. If you’re considering opening a joint account, have an open and honest conversation about your spending habits, financial goals, and communication style.
Still on the fence? Consider speaking with a financial advisor to get personalized advice. You can meet with a financial advisor from Georgia’s Own at no cost and no obligation to discuss your situation and determine what’s best for you.
How to protect your mobile devices
That smartphone in your pocket, the tablet on your coffee table, or that laptop on your desk contains practically everything there is to know about you, your friends, and your family. This includes contact information, photos, and even location data. Because of this, your mobile devices need safeguarding. We have a few simple security precautions you can follow to ensure you enjoy your mobile tech with peace of mind.
Keep a clean mobile machine
Update software and security programs on all devices
Having the most up-to-date mobile security software, web browser, operating system, and apps is the best defense against viruses, malware, and other online threats. Always keep your software updated when new updates become available, and only download updates from the company that created it.
Remembering to update your software can be a hassle—automatic updates allow you to get the latest security fixes without doing anything. You can let your device do all the work when newer software or app versions are available.
Delete apps when done
Many of us download apps for specific purposes, such as planning vacations, and have no use for them later. You might also lose interest or need for certain apps. Delete any apps and accounts you no longer use or need. Doing so will help manage your digital footprint, plus ensure you’re protected from cybercriminals and spam marketers or left off of mailing lists.
Shield your information
Secure your devices
Use strong passphrases, passcodes, PINs, or other features like facial identification to lock your devices. These passwords are your first level of defense if your device is lost or stolen. Avoid using sequential letters or numbers, like “qwerty” or “1234.”
Treat personal information like it’s money
Information about you, such as what you search for online or where you live, has value—just like money. Think about what services or people request that information and how it’s collected through apps and websites before providing it.
The National Cybersecurity Alliance has a tool that compiles privacy-setting information for most digital providers. You can usually limit what data these services collect about you, plus see what information has already been collected.
Own your online presence
Use security and privacy settings on websites and apps, especially social media platforms, to manage what is shared about you and who sees it. Regularly monitor privacy settings to ensure they’re set to your preference.
Even if your profiles or apps are on total lockdown, you should still watch what you post. Avoid posting personal information on social networking sites, and get in the habit of occasionally cleaning up your friend list.
Connect with caution
Turn off WiFi and Bluetooth when not in use
Some physical stores and locations look for devices with WiFi or Bluetooth turned on to track your movements while you’re within range. Cybercriminals can use this technology, too. Disable WiFi and Bluetooth when you aren’t using it.
Get savvy about WiFi hotspots
Public wireless networks and hotspots are not secure, so anyone could potentially see what you’re doing on your laptop or smartphone while you’re connected. Limit what you do on public WiFi, and avoid logging in to key accounts like email and financial services. Consider using a virtual private network (VPN) or a personal/mobile hotspot if you need a more secure connection.
VPNs encrypt your online traffic and anonymize your location so you can browse securely. Even if your traffic is intercepted, hackers can’t view your activity.
When in doubt, don’t respond
Fraudulent text messages, calls, and voicemails—known as vishing—have become extremely common, especially with the rise of AI. Cybercriminals can change how caller ID appears, for example pretending to be someone from your bank, or they can mimic a loved one’s voice, faking that they’re in an emergency and need money immediately.
Like emails, mobile requests for personal data or immediate action are almost always scams. Treat spammy text messages and phone calls as you’d treat email spam—block and report.
Your personal information is at your fingertips, and it’s crucial to make sure you’re covered if it falls into the wrong hands. Following the above guidelines will ensure you can enjoy your phone or tablet worry-free. This is part of our ongoing cybersecurity series and how you can protect yourself in today’s digital age. For more educational tools, visit our resource center.