Tag Archive for: Debt Reduction

Another new year brings another set of resolutions — many of which involve making new financial goals. Whether you’re currently in school or have been in the workforce for a few years, it’s smart to make these changes now in order to set yourself up for future financial success.

But it’s one thing to make financial goals, and another thing to stick with them. Here’s a few tips to save more money and budget effectively to keep yourself on track throughout the year.

Create A Budget. Then Write It Down.

This is important. Many of us budget in our heads, but don’t take the time to write it down. Dig out your notebook — or use our budgeting worksheet. Then, follow these steps to set up an effective budget that helps you make responsible decisions with your funds.

  • Determine a timeline for your budget — will you track it by week, month, semester, or year?
  • Separate your expenses into categories like housing, transportation, and entertainment
  • Revisit the document on a regular basis to update and track payments

The way you set up your budget is up to you. The important thing is to get it written down.

Wants Versus Needs

Obviously, there are things you need to pay for. Tuition, fees, housing, and food can all add up. The line between “needs” and “wants” can be blurry, so it’s important to clearly define them in your budget.

For example, if you’re paying for a school meal plan, going out with friends is a “want,” even though you need to eat. That doesn’t mean you have to give up eating out or spending money on things you want — in fact, it’s often important to do so!

By determining which expenses are “wants” and which are “needs,” you’ll be able to spend your money responsibly without going overboard.

Financial Goals Quick Tip: Consider giving yourself a set allowance to spend on your “wants.” If you’re saving up for something big, determine which “wants” you’re willing to spend less on each week.

Credit or Debit?

When it comes to the debate between credit cards and debit cards, there’s really no right or wrong answer. In many cases, it’s smart to use both. However, it’s especially important to use your credit card responsibly.

  • Use your credit card for one small charge each month — otherwise, keep it for emergencies only
  • If an emergency does happen, stop your monthly charges and instead use that money to pay off your credit card
  • When using your debit card, keep an eye on your checking account to make sure you aren’t spending more than you have

By handling your spending this way, you can build your credit score without relying on credit card debt to fund all of your wants. Your debit card gives you the convenience and security of not having to carry cash everywhere.

Loans and Financial Aid

Chances are you’ve had to borrow some money to pay for at least a portion of your education. If you’ve taken out a variety of different loans, it can be difficult to keep track of what you really owe.

When you’re considering taking out a loan, it’s helpful to research repayment options to find the loan that is right for you. If you find your payments are too high, you may consider refinancing all your loans into one loan with a potentially lower interest rate. Refinancing means you’ll pay less each month on your student loans – if this sounds like a fit for you, U-fi can help you start the refinancing process.

Setting up your financial goals doesn’t mean sacrificing experiences like going to the movies or eating out with friends. By budgeting and defining your wants and needs, you make smart choices that count.

Want to make another smart financial decision? See how U-fi can help you refinance your loans.

Does your January credit card statement have you feeling blue? Find out how personal loans could provide credit relief.

It Happens to the Best of Us

The holidays have come and gone. You may be feeling a bit relieved that all the seasonal hustle and bustle is over. Sure, it may be a bit cold outside. Sure, work is back in full swing. But, things are looking good with your New Year’s resolutions. You’re feeling optimistic and energized.

Then, you receive your January credit card bill. Whoa, the new balance is much higher than you expected. As you go down the list of purchases on your statement you ask yourself, “Did I really spend that much?” You also notice the available credit on your credit card is pretty low. There are some big purchases coming up in your future. You were planning on using your credit card to pay for them. Now, you no longer have enough available credit to pay for everything as planned.

With average credit card APRs over 16%, and many exceeding 20%, you know if you don’t pay your balance in full you’ll be hit with a hefty finance charge, which will be added to your outstanding credit card balance. And even worse, if you’re late making the minimum payment that’s due, you could be hit with a penalty APR, which can be as high as 29.99%.

Personal Loans Could Provide Credit Relief

This is where personal loans could provide credit relief. Unlike a credit card, which is a revolving line of credit, a personal loan is an unsecured loan that doesn’t require any collateral, such as a car or house. Personal loans come with a specific repayment period, usually between 1 and 7 years. Fixed interest rates are more common than variable interest rates, and some lenders will offer you a choice.

The main reason people take out personal loans is to pay off existing debt, such as high interest rate credit cards or loans. Other common reasons include making major purchases, for home improvement projects, for special occasions like weddings, to take a vacation, and to pay off medical bills.

Personal loans can range from as little as $1,000 to as high as $100,000. APRs vary widely among lenders and are based on the borrower’s (or co-signer’s) credit history, annual income, repayment term selected, and type of interest rate chosen. Some personal loans even come with money saving automatic payment discounts and loyalty discounts.

Tip: Some lenders charge upfront fees, which add to the total cost of the loan, so be sure to take that into account before choosing a lender.

A really nice feature for personal loans is how quick and easy the process can be. If you submit a completed loan application, you can receive a decision in a matter of minutes, and if approved, receive funds in your bank account as soon as the next business day, provided your application has no typos or errors.

Now that the holidays are over, you may be suffering from the post-holiday credit card blues. If so, check out a personal loan for credit relief from U-fi’s partner. It just may be what the doctor ordered.

Winter break is often a favorite time of year for college students. It’s a chance to go home, visit family and friends, enjoy home-cooked meals, and maybe do a little holiday shopping. Unfortunately, working off that extra helping of pumpkin pie may be easier than off your holiday spending.

5 Holiday Spending Tips

As you prepare to enjoy the holidays, these tips can help you avoid spending traps. Here’s how you can ring in the New Year without a mountain of debt and  holiday spending regret.

  1. Don’t use student loans to pay for a holiday trip or gifts.

    Using a student loan to finance a trip over the holiday break or a shopping spree might be tempting. But remember, your student loan is intended for educational expenses. Plus, you really don’t want to take on student loan debt for a short term benefit that you’ll be paying back for 10-plus years with interest.

  2. Avoid paying for everything with a credit card.

    Much like using a student loan, you’re better off to simply pay with cash and avoid using a credit card for holiday expenses. Credit cards will typically have high interest rates, especially if you carry a balance. If you can’t pay cash for your holiday purchases, it’s probably not worth the cost.

  3. Don’t feel obligated to buy gifts for all your friends and family.

    If you’re a student, your friends and family understand that you’re on a tight budget and may not have the resources to buy gifts for everyone. Simply spending some time with friends and family will likely be more meaningful than any gift you could purchase at the mall. Find ways to do small but meaningful things that will be appreciated.

  4. Don’t forget to set a budget or spending limit.

    It’s important to know in advance what you can reasonably afford to spend. It’s a good idea to set a budget for yourself and cap your spending at a certain dollar amount. That will help keep you on track and also let you plan better for the people on your gift list, and possibly help you cut back on the number of people on your list. Some families draw names for gifts or find other creative ways to help family members keep their expenses down and enjoy their time together.

  5. Avoid paying for gift wrapping or expensive gift bags and cards.

    It’s convenient to drop your gifts off and have someone else wrap them. However, there’s a cost for convenience and it simply might not be worth paying for. Buying wrapping paper after the holidays is a great way to save money and plan ahead for the next year. Plus, if you plan and don’t make all your gift purchases at once, you won’t be bogged down wrapping a lot of gifts at the last minute. Often, a card and a gift bag may actually cost more than the gift you’re giving.

With a little discipline and planning, you can set yourself up for a fun-filled holiday season without incurring the stress of spending too much or putting yourself into debt. Remember to enjoy the holidays and the time spent with friends and family. Many times, the best gifts are the ones that don’t cost anything at all.

Spring break is a time that college students look forward to all winter. It’s your chance to escape the rigors of the classroom and relax on a warm beach or other exciting destination. Although spring break can be fun, the costs associated can add up quickly. With a little planning and preparation, you can enjoy a week away from studying without emptying your bank account. Use these five planning tips for a successful spring break.

1. Set Your Budget

The best thing you can do is plan your spring break trip a few months in advance. This will not only give you ample time to get everything organized, but you’ll have more time to save and plan for your trip. Determine what your budget is and let that guide you’re planning. Then, take the time to research destinations and estimate the costs for each option. Transportation and lodging will likely make up the bulk of your cost, but don’t underestimate your other expenses during your trip. You may find that some trips are just too expensive based on your resources and budget.

2. Split the Bill

If you’re driving to your destination, ride with friends and split the cost of fuel. Additionally, you may be able to save on hotel costs by sharing a room with friends. Those extra savings can go a long way and will give you more funds for other activities during your trip.

3. Borrow – Don’t Buy

Create a packing list and figure out if there are items you don’t have but know you will need. It’s a pretty safe bet that buying something will be more expensive at your destination. Try to borrow anything you might need from friends or family, especially if it’s an item you’re unlikely to use after the trip. Try your best to anticipate everything you’ll need during your trip and pack accordingly.

4. Find Fun Closer to Home

Although it sounds great to take a big trip somewhere far away, you can have just as much fun trying new things closer to home. Remember, the entire purpose of spring break is to take a break from studying, relax, and enjoy yourself. Sometimes, that might simply be going home to see family and friends. And the best part of that kind of spring break is you won’t have to spend much money at all! Check out tourist destinations in your current city to explore new activities. You’d be surprised at how many things are nearby that you may have overlooked previously. Get creative and enjoy yourself.

5. Pay as You Go

Ideally, you want to be able to pay for your spring break trip with savings and not use high interest rate credit cards or even student loans to fund your adventure. Again, try to set a budget for your trip and then keep your spending within your budget. Don’t be tempted into spending more than you have or feel pressured into trying to keep up with someone else’s crazy spending sprees. Spring break can create memories that last a lifetime, but you don’t want create a financial burden that lasts a lifetime either!

Enjoy your spring break and the time away from your classes. Remember to be safe and protect yourself and your belongings while traveling. A little planning and budgeting will help you have a great time and feel good about your finances when you return.