This is the culminating post in the 3-part series A Millienial Reality. You can find Parts 1 and 2 here and here.
The first installment of this series draws from personal experience to tell the far too common tale of a young family looking to grow while planning around student loan debt. The second delves into just how easy it is for a young person to incur student loan debt in light of the fact that tuition costs have tripled since the mid-1970s. It also offers some plans to look into while your kids prep for college, and discusses what alternatives are offered in the high school curriculum. In summation, we'll offer 3 tips for saving while getting rid of those student loan payments.
1. Establish an Emergency Fund/Set a Savings Goal
An emergency fund will allow you peace of mind when the breaks go out on your car; you'll be able to rest easy knowing you don't have to rack up the bill on your credit card because you'll have some cash readily available. Once that is established, have a goal in mind of how much you want to save. We recommend a minimum of 10% of your annual salary, but adjust as needed. If you can only save 5% this year, that's better than 0%! Try to increase each year until you reach that 10% level.
Not sure how much you can save? Check your Debt Ratio for free here:
2. Let it Grow
In order to see growth, you'd want to have an investment plan in place. Whether it's in a 401(k), an IRA, or some other investment vehicle, your account balances will accumulate relative to your investment plan and risk tolerance. To get figure out which type of account might be best for you, or if you'd like us to review your current situation, touch base with us!
3. Get Started Yesterday and Get Educated!
OK, obviously you can't start yesterday, but today is not a moment too soon! You might read certain financial experts who will tell you paying off all debt should come before any savings. One huge aspect said experts gloss over is student loans are not considered "bad debt". As long as you stay on top of the payments, they do not effect your credit score, nor your ability to get approved for a home loan etc. The right plan should incorporate both paying off debt and saving! We at Wealth Club believe education is the key to financial success. This blog aims to provide timely, relevant, and valuable financial education to those who seek it. Join our mailing list today to get our weekly content!
