Higher education expenses are rising drastically and many students are being forced to finance their educations through student loans. Accordingly, the total amount of outstanding studen loan debt recently surpassed credit card debt for the first time ever. D.R.E.A.M. is committed to providing useful information to our readers to help you avoid falling knee debt. It's with great excitement that we introduce our newest guest blogger, Cecillia V. Barr of www.debt.org. "Debt.org is America’s Debt Help Organization, serving the public with thorough and accessible information on financial well-being. We strive to help people in all stages of life, from college, through buying or selling a home, and into retirement. Whether an individual wants to plan for the future, get out of debt or stay out of debt, we can help".
College isn’t cheap; everyone knows that. Don’t let that discourage you from going to your dream school. There are plenty of options available for students with different financial needs. Simply fill out a Free Application for Federal Student Aid (FAFSA) to find out what type(s) of aid and how much aid you qualify for. Once you have an idea of how much money you might be granted or loaned, you can start to create your budget for all your expenses. Of course there are a few things to avoid when beginning to plan for your college career:
1. Paying Full Price: Be smart with your money. This goes for everything: notebooks, pens, groceries, things for your dorm or apartment. Shop around for the best deals. Don’t pay full price; look online or in discount stores. If you can buy your supplies and books for cheap, do it. There are even places online that allow students to rent textbooks for the semester and schools are starting to adopt this concept as well. All in all, just avoid overspending.
2. Unnecessary Expenses: There might be a little bit of a grey area on this one. Sometimes it’s hard to decipher between what you need and what you want, especially when you aren’t under the total control of your parents anymore. Do you really need the 60” plasma screen when you can get a 42” for 300 dollars cheaper? Are the 200 dollar Tory Burch flats really worth it when you can buy similar shoes for about 30 dollars? You have to think with your wallet not your heart.
3. Excessive Credit Debt: When you are first introduced to credit, it’s like going to a theme park for the first time. You want to run around and do everything all at once. Credit cards are that thing where you can finally buy all the things you’ve never needed but always wanted. Expensive basketball shoes, pretty dresses, expensive computer games, even more expensive perfume. All that is available for you when you open up the credit chest. So maybe when you get that first credit card offer in the mail during your senior year of high school, you want to table that. Keep living off of your mom’s home cooked meals and her cautious clothing allowance. Worrying about credit card debt while trying to focus on your studies in school can be very difficult.
4. Overdraft Loans: Another thing you really want to avoid while you are in school is overdraft loans. Overdraft loans attached to your checking account often have very high interest rates, even if you do have something of a “teaser rate” to get going with. Overdraft loans also leave you always in debt so every time you look to your checking account you are staring from behind the 8-ball by several hundred or thousand dollars. That’s no way to view your bank account balance and that is one of those situations you would like to avoid if you could.
5. Long Term Debt: While all student loan debt is generally “long term debt” you want to try and avoid any other long term debt if you can help it. New car loans and home loans are going to take a toll on your finances. So, before you jump to the idea of having your own place and your own car, make sure you can handle it financially. When you’re in school, you shouldn’t be thinking about a mortgage or heavy car payments; you should be focusing on your education. Try to keep your debt down to a minimum before you get in too deep and have to look into settlement options.
It’s important to get ahead before falling behind. Be smart about your money, limit your splurging, don’t buy things you don’t need, and make sure you look around for the best deals. Avoid excess debt and focus on school and you’ll be good shape!
Cecillia Barr researches and writes about debt-related issues for Debt.org, America’s Debt Help Organization. One of her focuses is students and their financial aid options.
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