Tag Archives: student loan debt

The Freshman $30,000

We took an informal poll last month regarding your grade in financial literacy. The majority of US adults give themselves a C or lower in money smarts. Either smart people took our poll or you think you manage your money better than you do, because the majority of the respondents gave themselves a B. See the poll results.

Education SavingsIn light of this being the graduation season, and the fact that we ran across a survey that said students wished they learned more financial management in school, this post will be about how kids (or their parents) can become be money smart at school.

Forget the “Freshman 15.” We need to worry about the “Freshman $30,000.” The average student graduates with close to $30,000 in debt. That’s a lot of financial weight.

Students are screaming for education in how to manage their money. Some states require a class in financial education to graduate, but many do not. And just ONE class? We all know it takes more than that to get through to a teenager!

This is where parents need to step up and teach their kids. Or find somewhere that can…like a credit union or consumer credit counseling service.

Here’s why: First-year college students required to take a financial literacy course in high school are more financially responsible than those students who didn’t take the class, a recent study found. This means they were more likely to pay credit card bills on time and less likely to go over their credit limit. Both of those add up to less debt. But just 17 states require a course. And ongoing education is critical.

Our friends at A Smarter Choice have some good tips to get students started on the right foot. Here is a scaled down version of their blog post Get Started on the Right Financial Footing.

Stay frugal. Be mindful of what you’re spending. Check with your gym, and cellphone and cable providers, to make sure you’re getting the best rates. Pack lunches from home. Have friends over for dinner and movies instead of going out.

Negotiate your pay. Starting out with a higher salary will mean higher earnings over the course of your career.

Build an emergency fund. Prepare for the unexpected by setting up an emergency savings account and have your paycheck directly deposited into that account. You should have three to six months of living expenses saved. For real.

Start saving for retirement now. If your job offers a 401(k) or similar retirement savings accounts, put money into it! Even better is if your employer offers to match a percentage of your contributions. Your 50 year-old-self will think you were super smart for doing that.

Pay down student loan debt. Know what you owe and contact your lender immediately–before the due date–if you’re going to miss a payment. Pay extra if you can.

Use credit appropriately. A strong credit history will pay off when you want to buy a house or purchase other big-ticket items (the new iPhone 6 doesn’t count). Here’s the biggest piece of advice that you don’t really want to hear: Don’t charge more than you can afford to pay off monthly! And please, pay your bill on time. Spending too much and having late payments can get you in a heap of trouble…and fast.

College students are smarter, but have more on their plate than in years past. Make financial education a requirement for them, and maybe as an adult, they’ll be shedding that $30,000 before swimsuit season.

Meet the Participants

“I need to pay down loans.”
“We want to save for retirement.”
” It’s hard to control my spending.”

Sound familiar? These are the challenges facing our three Money Possible families, and the issues affecting millions of Americans who want to take control of their finances.

Each family has agreed to tell their story, and show that getting control of their money isn’t hard, it just takes dedication and a little self-control (of course, self-control is a whole other problem for us Americans…evident by our super-size nation…and we’re not just talking about food!)

Meet the participants
RaquelRaquel
Raquel is married and a mother of two young children.

In her 30s, her goal is to pay down payday loans, and learn to save.

Lisa & BryanLisa and Bryan
In their 40s, Lisa and Bryan want to save for retirement.

They have three older children. They need to learn to say “no” and live within their means.

FredicaFredica
A divorced mother of four in her 50s, Fredica wants to control impulse spending.

She always wants to save enough to buy a house.

Follow these Wichita area credit union members’ stories here, and every Tuesday on KAKE-TV’s (Channel 10, ABC) 4 p.m. newscast. Follow the hashtag #moneypossible.

Let’s face it…with Americans $11 trillion in debt and struggling with saving money, many of you can probably benefit from following them and learning from their successes and their challenges.

Who hasn’t had loans to pay back? Who doesn’t need to save a little (or a lot) more for retirement? And who isn’t plagued by the temptations at the grocery store?  By following Raquel, Fredica and Lisa and Bryan, they will show us that we can do it. We can destroy our debt.

This program highlights the need for consumer financial education, as well as the value of credit unions as strong financial partners. The campaign aims to give consumers tips and explain that there are resources available to those who need extra help.

Consumer Debt is Rising, but Consumers Say Getting Out of Debt “Extremely Important”

With headlines like “US Household Debt on the Rise Again” it’s easy for consumers to fall into the “everyone is doing it” mindset.

Reports indicate that consumer debt is climbing faster than Austin Powers’ Jaguar can go from 0 to 60 (7.4 seconds if you are wondering). Outstanding student-loan balances have reached more than $1 trillion.

That’s right.
Dr. Evil: One Trillion Dollars!A trillion dollars is a million million. One followed by 12 zeros or $1,000,000,000,000. And of those loans, more than 12% were delinquent 90 days or more!

Before you and Mini Me throw up your hands in despair and wonder who is racking up all this debt (because we know it’s not YOU), there’s a light at the end of the tunnel.

A recent survey from Credit.com (Americans and Credit Card Debt) indicates Americans with credit card debt believe that getting out of debt is “extremely important” and plan to shape up their finances this year.

I know we started out talking about student loan debt, and this recent survey is only about credit card debt, but according to this infographic, 75% of those who sought help from a financial counselor had credit card debt. Let’s face it, who doesn’t have one or two…or eight credit cards?

If you are a numbers geek, here’s more survey findings:

  • 55% of survey respondents said they have at least some credit card debt.
  • Of those 55%, half are chomping at the bit to develop a debt reduction plan for 2014.
  • 68% are ready to roll now, as they said it is “extremely likely” that they will start to pay down their debt in 2014. Yeah baby! (That has to be said like Austin Powers or it’s just not as funny.)
  • A little more than 40% of those surveyed say it is extremely likely they will be able to eliminate all of their credit card debt this year. Let’s do it!

That’s what this campaign is all about. Most people know they have debt. Most people know they spend too much. They just need guidance and a little push in the tush to get them going on a path that’s going to make them a Saver Superhero or Debt Destroyer. I mean, who doesn’t want that alter ego following them around?

2013 Debt Statistics

More than two million Americans sought the help of a financial counselor in 2013.

Here’s why: According to this cool infographic (from our friends at Advantage Credit Counseling Service), the average client seeking help had $43,000 in debt.

2013 Debt Statistics for US Consumers

Explore more infographics like this one on the web’s largest information design community – Visually.