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The first few years after college can be a challenge for anyone—especially when it comes to financial independence. Between finding a job and a place to live, paying down student loans, and maybe even starting a family, the financial decisions you make today can impact the rest of your life.

But don’t decide to move in with your parents just yet. By establishing smart financial habits in your 20s and 30s, you’ll be well on your way to enjoying a more comfortable lifestyle both today and in the future.

1. Finding a Job

The first step toward financial independence for anyone is finding a source of income. Your salary will determine what you can afford in all other aspects of your life, including where you can live and what kind of lifestyle you can support.

  • Be a creative job seeker, and don’t limit yourself to traditional job-search methods. Expand your network, be active on LinkedIn and professional in your use of other social media, and attend industry events.
  • Recognize that you may not get your dream job right out of college. You may have to pay your dues with one or more entry-level positions before getting to the position you’ve always imagined for yourself. And that’s OK – as long as you’re building a resume that supports your chosen career path, you’re on the right track.
  • It’s important to know your worth and position yourself as a competitive job seeker in your industry. What are your peers making? What’s the average salary in your industry and region? Do your research to educate yourself so that you can intelligently campaign for fair compensation when it comes time to negotiate your salary.

Answers to career-related questions impact your financial future and your budget. Make sure your financial plans evolve to include planning for career development – because your salary and livelihood is a major driver of your financial well-being. For example:

  • As you gain experience, you’ll define your career goals to become more specific and learn about new career opportunities. Will you need certification, additional training, or education?
  • Will finding your next position require relocating to a different job market, or can you stay where you are and move up?

2. Making a Budget

Once you have a steady source of income, you can create a budget to make sure you don’t overspend. Consider using a free budget worksheet on sites such as Quicken or Mint to make the process quick and easy on your journey to financial independence.

  • Calculate how much you spend on set monthly expenses, including rent, car payments, insurance, student loan payments, and utilities.
  • Look through your recent bank statements to estimate how much you spend on other expenses such as groceries, transportation, clothing, dining out, etc.
  • Subtract your monthly expenses from your monthly net income to determine your monthly spendable income. This is how much money you have to spend on extras each month. Don’t go over this number unless you want to start dealing with the cycle of debt.
  • Are you spending more than you make? Then it’s time to rethink your expenses. Where can you cut back? Should you take on a roommate? A second job? Be realistic about your finances and do what you can to avoid relying on credit cards to pay your bills.

With time, the definition of your household may change. You may find you have added income, but you could also have additional expenses and other considerations. Every time you experience a significant change in your household, your job, your location, and your living situation is a time to re-evaluate your budget and financial goals.

3. Choosing Where to Live

Housing costs are generally among the most costly monthly expenses. Each of the decisions below will significantly impact your bottom line.

  • Are you willing to relocate for work? While some people are set on living in one particular city, others are more open-minded when it comes to their job search. And, as you work longer and decide what you want to do, the best opportunities may be elsewhere. You’ll need to decide whether to open up your search to other cities to increase your options both in terms of pay and position.
  • How much does it cost to live in the city of your choice — and can you afford it? Some cities are notoriously expensive for renters, and it may be difficult to pay the high costs of rent on an entry-level salary. Do a little research and use comparison calculators to weigh the benefits and costs of living in various places.
  • Will you live alone or with roommates? Obviously, flying solo can come at a high price, but living with roommates has its own set of challenges.
  • Do you want to rent or buy? Buying can be a wise investment, but not all young adults are qualified to purchase a home. If it’s something you’d like to do in the near future, start by building your credit and familiarizing yourself with the real estate landscape in your area.
  • As you live on your own (or with roommates or a significant other), you’ll learn more about what sort of environment leads to a better quality of life for you. As life events unfold, you may find that a significant other’s job prospects and career opportunities may begin to factor into your location of residence. Other life changes (divorce, changes to a family member’s health, etc.) can also impact who lives with you and where you decide to live – and this will impact your bottom line.

4. Managing Student Loan Debt

The average student graduates with more than $29,000 in student loan debt. While you may be able to defer your payments while in school or residency, eventually you will have to start tackling those payments. After housing, this is often one of a graduate’s most significant monthly expenses.

  • Your post-graduate student loan bill shouldn’t be a surprise. Know how much you’ll owe – and have an idea of how you’ll pay for it – before you even start college.
  • Learn more about the federal loan repayment plans for which you are eligible and what your private loan payments and interest rates are at this time. Check your private loan statements or your lender’s website for this information.
  • Explore student loan refinancing. For most people, student loan repayment stays around for a while – but it doesn’t have to keep the same form. Once you’ve been out working and living in the “real world” for a while, your situation may change, and refinancing your student loans can help you take advantage of some positive changes to your situation. If you’re making the smart financial decisions we at U-fi know you can, your credit worthiness, credit score, and income have all been taking an upward turn. Consider whether refinancing your federal and private student loans can make your interest rate and monthly payments lower. With U‑fi, there are no application or origination fees and you could end up saving yourself thousands of dollars over the life of your loan – or ridding yourself of student loan debt sooner than expected.

5. Planning for the Future

While at times it may be difficult to imagine life beyond your next paycheck, it’s critical to think about your future financial independence.

  • Family planning – Do you have plans to get married, start or expand your family? It’s a good idea to start saving for those milestones early on. If you haven’t found the right person, but you know it’s a priority for you to buy a home, find a partner, or start a family, there’s no reason to wait to prepare financially. Why not make it easier on yourself later by planning now for the future you know you want?
  • Retirement savings – Speaking of planning now for the future you want: for millennials, the age of 65 may seem like it’s a long way off but it’s getting closer every day. Starting as soon as you have the option to save toward your retirement has a huge positive impact on your ability to save enough for retirement. But what do you do each time you get a raise or bonus? Do you increase your contribution toward retirement and diversify the types of accounts you invest in – or do you find new ways to spend the additional money? You can guess what we recommend.
  • Insurance – You’ve enjoyed the benefits of your parents’ insurance policy for most of your life, but being an adult means buying your own health, car, and home or renters insurance. When you first start out, you won’t own as much of value to insure, but as you continue to work, you’ll acquire a nicer car, a bigger home, better furnishings, and simply more stuff. Plus, the larger income you’re making will be harder to replace should something happen that prevents you working to pay your bills. Insurance is something that you’ll need to continue to evaluate as your assets, income, and dependents change.

Complete financial independence after college may seem intimidating at first, but it’s also exciting. Embrace the challenges, but reach out for help when you need it. As you may have noticed, financial literacy is an ever-changing learning process because life is full of constant change. It’s always good to reevaluate your goals, your situation, and your budget on a regular basis to make sure you’re on the right track.

One thing you can count on? U-fi is always here with resources to help you be a smart financial consumer. Explore smart student loan refinance options with U-fi and get started today.

At the end of each year, I review my personal finances to see how I’m progressing towards my goals. I also take stock to see if I need to make any course corrections. I refer to this annual ritual as getting my financial house in order. It has proven to be a worthwhile exercise over the years. It’s helped me navigate the inevitable peaks and valleys, and also review my financial goals annually. It especially helped when it came to handling student loan debt.

Student Loan Debt

While I am no longer handling student loan debt, there was a time when I did. While studying for my bachelor’s degree, I borrowed money to help pay for tuition, fees, and housing expenses. Fortunately, I was able to work part-time in school, and full-time during the summers. When I graduated, I had what I considered a modest level of debt.

The Realization of Repayment

After graduating, I remember receiving my student loan statement and payment slips in the mail. It had been several months since graduation. I hadn’t thought much about handling my student loan debt. Because I deferred my principal and interest payments while in school, I didn’t know exactly how much I owed. I didn’t even know when my payments were due. I can still remember looking at my loan statement and seeing how much I owed and the monthly amount due. Then, I counted the number of payment slips. I realized it was going to be quite some time before I could pay my loans off in full.

Reality set in. Having taken some finance classes while in school, I knew the high interest rates on my loans would cause interest to accrue rapidly on the remaining principal balance. The longer it took me to pay off my loans, the more it would cost. So, I sat down and developed a plan. I set up a monthly budget to manage my finances and pay off my student loans as soon as possible. This was the start of getting my financial house in order.

Discovering Repayment Options

Since that time, student loans, both federal and private, have greatly evolved. There are now many more repayment options available to students and parents to help them handle student loan debt. These include various income-driven repayment plans, federal loan consolidation, and private student loan refinancing. Each of these options has distinctive features and eligibility requirements, so it makes sense to compare them to one another to see if any meet your needs. You can learn more about federal student loan repayment plan options by visiting the Department of Education’s Federal Student Aid website. Learn more about student loan refinancing and loan consolidation, and which one may be right for you.

Making a Repayment Plan

Creating a solid financial plan and sticking to it is an important part of any person’s financial well-being. If you haven’t already done so, I highly encourage you to review your financial situation, create a plan, and set a monthly budget. If you need help getting started, U-fi offers several tools including budgeting strategies, worksheets, and financial wellness tips.

Once you’ve created your plan, be sure to review it at least once per year, as your goals and/or financial situation may change. This way you can make any needed adjustments to ensure you stay on track. By keeping your financial house in order you can increase the likelihood of achieving financial success.

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.

Recent surveys and studies suggest that many young adults lack basic money management skills. Too often, students enter college at a loss for managing their personal finances. College may be the first opportunity you have to experience some independence, and may be the first time you are faced with budgeting and making financial decisions on your own.

One of the simplest, yet most important steps to controlling your finances is budgeting. To start the process, determine your take home income and total expenses. Then break it down to a simple formula:

Income – Expenses = Positive or Negative Outcome

As you can probably guess, you want to end up with a positive outcome. To accomplish this, you need to spend less than you earn. It may sound easy, but it can be difficult. In order to calculate this number, you’ll want to sit down with a list of your monthly expenses. Worksheets like this one can help ensure that you’re accounting for everything – even that daily latte.

Here are some steps to get you on track to creating a budget and taking control of your financial future.

Know your income sources.

This is usually pretty straight forward. It’s typically money you earn from a job, but if you’re a student it can also be money you’re receiving from financial aid sources (grants, scholarships, or loans), money from your parents or other family members. To ensure your funds last the entire semester, you may need to average out your financial aid to a monthly amount.

Identify your expenses by using a daily spending diary.

Fixed monthly expenses like rent, car payments, insurance, and any other expenses you pay every month are easy to identify. The daily spending diary can help you track your variable expenses like food, entertainment, and clothing. After tracking of all of your expenses for a month, you may be surprised at where your money is going.

Figure out needs vs. wants.

When looking at your expenses or potential purchases, it’s important to make a distinction between “needs” and “wants.” There are some things you absolutely need – like housing and food. However, some things may fall into the “wants” category, like frequently eating out.

Find room for improvement.

After you’ve identified all of your expenses, find areas that can be reduced or even eliminated. Remember, you want to spend less than you earn. That goes for credit cards, too. It’s easy to spend what feels like “free money” but that debt can catch up with you quickly with interest.

Stick to it.

The last step, and possibly the most difficult, is to stick to your budget and resist the temptation of unnecessary spending.

After you’ve crafted your budget, stick to it each month, then evaluate how you’re doing. Are you staying within your budget? Are there problem areas you need to address with some of your expenses? You can find more money saving tips here to keep your expenses under control.

After you’ve created your budget, you’ll start to experience the benefits.

  • Ensure you don’t spend money you don’t have
    • Far too many of us spend money we don’t have using credit cards or student loans. A good tip is to only use credit cards when you can pay the balance each month and only use student loans for what you need (not want).
  • Shed light on bad spending habits
    • Building a budget forces you to look at your spending habits. You may find areas where you are spending money on things you don’t really need.
  • Leads to a brighter future
    • Budgeting allows you to position yourself for a more successful future. It’s far easier to “live like a student” when you’re actually a college student as opposed to trying to climb out from under a mountain of debt later.

Budgeting doesn’t mean spending as little money as possible or feeling guilty about every purchase. It’s about knowing your limits and making sure you have control of your finances.