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Fine-Tuned Finances

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How to Lower Your Student Loan Payment

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Student loans can be a huge financial burden on recent college grads. I took out federal student loans and got on a graduated repayment plan. My payments started out pretty low, but they increase by a little every two years.

I understand that not everyone has low monthly student loan payments and I’ve even heard from some people with a higher amount of loans that their minimum monthly payment was around $1,000 which is no chump change.

If you are going through a rough time financially or have a lower income for the time being you may want to consider some of these options to help lower your monthly student loan payment.

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Get on an Income-Driven Repayment Plan

If you have federal student loans, you have the opportunity to apply for an income-driven repayment plan (IBR) to lower your monthly student loan payment. There are quite a few programs to choose from depending on the specific type of loans you have, but the pay-as-you-earn plan (PAYE) and the income-contingent repayment plan (ICR) are the most popular.

With PAYE you can contribute as low as 10% of your discretionary income for your student loan payment and as low as 20% of your discretionary income with the ICR plan. In order to qualify for these plans, you can’t have any loans that have defaulted. It’s also important to note that these plans may also extend your repayment term to 20-25 years.

Graduated Payment Plan

This is another option that I currently have. If you have federal loans and are using the standard repayment plan, you may be able to lower your monthly payments with the graduated plan. With this plan, you make payments for 10 years and your monthly payment amounts increase over time in the hopes that your income is increasing as well year after year so you can afford it when your payments increase. This is a great repayment plan to have when you’ve just graduated from college if your income is lower or if you are trying to get into the habit of paying back your loans.

Consolidation and Refinancing

If you don’t have federal loans, you can still try to lower your monthly payment by refinancing your loans. When refinancing your loans, you get a whole new loan with a new lender. Most people refinance their loans to lower their interest rate but if your interest rate is lower, that means you’ll pay less on your loans over time. Thus, your monthly payment should decrease as well and you can pay off your loans faster.

Consolidation is similar to refinancing but it basically combines all your student loans into one loan and averages out your interest rate. You can consolidate with federal or private student loans and like with refinancing, the lower interest rate should help you lower your monthly payment and allow more of your payment to go toward the actual principle balance instead of just interest.

Deferment

Deferment is a last resort option for federal loan borrowers who are enduring an economic hardship and can’t afford to pay back their student loans for the time being. If you get laid off from your job or haven’t secured a job yet after college, you can apply for deferment, which will put your loans on hold for the time being.

Consider the Drawbacks from Lowering Your Student Loan Payment

While lowering your monthly student loan payment may seem like a good idea for the time being, you must also consider the drawbacks of this decision. If you are putting less money toward your student loans, you may be stuck paying them off over a longer period of time especially if you choose an income-driven repayment plan.

Even with deferment, your student loans will accrue interest and you will have to pay that back when you are required to start making payments again.
If you truly can’t afford to make student loan payments, consider alternatives like simplifying your lifestyle, cutting expenses, and increasing your income first. Even if you have to try one of these options, they are much better than letting your loans go into default.

Once you get back on your feet and you can always make extra payments on your student loans each month as well.

Have you ever tried any of these options to lower your student loan payments?

How to Save Money on College Textbooks

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College is already super expensive, and once students get admitted and receive financial aid and scholarships they think the worst is over. Wrong! You still need to buy textbooks for certain classes in order to understand the material and do well in the class so you can gain credits.

The cost of textbooks in the U.S. for two semesters averages out to be $1,100 for most students according to Scholarships.com. If you haven’t received a book voucher, taking out a loan for books and expenses can be costly in the long run when it’s time to repay the debt.

Here are a few ways to save money on college textbooks this upcoming semester.

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Avoid the Campus Book Store

College bookstores are well known for selling overpriced books. You can find a way better deal on your textbooks online or elsewhere. Sites like campusbooks.com, betterworldbooks.com, and
abebooks.com/textbooks are all great resources that cut the price of your books tremendously.

You can also go to sites like Amazon.com or Half.com to see comparison prices for books so you can ensure you are getting the best deal.

Rent Your Textbooks

Some students choose to rent their textbooks because they see no reason to have the book laying around after the semester is over. Sites like Chegg.com and BookRenter.com are great sites to rent books from.

I once rented a book from Book Renter for only $50 to use for 180 days. Once I knew I would be late sending it back to the company I only paid an additional $4 to get a 10-day extension on the book. Not bad at all.

Check Out Discount Book Stores for Used Books

If you’re not comfortable ordering a book online you can always look for a discount bookstore near your campus. Sometimes there are separate book stores located in the same town as your school that may specialize in discounted books.

You can also put out an ad in your school’s paper or bulletin board that you are in need of a specific book and are willing to pay another student to sell it to you. Utilize sites like Craigslist.org as well if you would like your ad to reach more people.

Another good resource is ValoreBooks.com which allows students to communicate online to buy and sell books from each other.

If you still can’t afford all your books, check with your school and see if they have a trading program that allows students to trade books with each other instead of buying them off.

Other Options

If you are planning to sell your textbook(s) after the semester, don’t buy an instructors edition no matter how great the price looks. Instructor’s editions are extremely hard to sell because they contain extra features and most bookstores and online stores won’t buy them from you. On the other hand, if you don’t care about selling your book after the class has ended and you are just interested in scoring a cheap price, you might want to look into instructor editions of your textbooks to save money.

Also, ask your teachers and other students you know that have already taken your class if you really need to use the book before you go out and spend money on it. Don’t let that be you. Instead, assess all your options and resources and don’t hesitate to reach out to your professors before the class starts.

Have you ever spent a lot of money on college textbook? Which one of these tips would you try?

5 Expenses I Lowered to Save Almost $7,000 Annually

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I love having low expenses and I hope to keep them low as long as I can. I don’t earn a ton of money, but I also don’t spend a lot of money either so it’s nice to feel more flexible about my finances as I work toward big goals like paying off my debt, saving for retirement, and saving for big ticket items.

It wasn’t always this way though. I used to live above my means and struggled a lot to keep up with the Joneses (whoever they were). Here are 5 ways I cut my expenses over the past two years and saved almost $7,000 annually. Try these strategies to lower your expenses as well!

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1. Ditched My Cable Subscription

Cable is becoming more and more obsolete given all the affordable and user-friendly television streaming websites and apps like Netflix, Hulu, Amazon Prime, oh and YouTube which is free. I used to pay about $80per month for cable and internet and sometimes I couldn’t even find anything I wanted to watch on T.V. which was horrible.

I kept internet but cut cable which saved me an average of $45 per month or $540 per year.

2. Lowered My Grocery Bill

Back in college, I actually used to spend more on groceries. My family of three spent about $350 per month or more. We hardly ever dined out so that’s why I often justified our grocery budget which wasn’t that bad compared to other people’s spending I’m sure.

On the other hand, I noticed how we were not getting the chance to eat all of the food we purchased before it went bad. That was a big sign that we could get by on less so I decided to attempt to cut our grocery bill by shopping for seasonal produce that’s on sale, avoid pricey processed foods, and spend less time in the store to avoid impulse purchases.

I was able to slash my grocery bill by $50 per month or $600 per year and now we only go shopping twice a month.

3. Found a Cheaper Phone Service

I was never one of those people to have an expensive phone bill nor an iPhone. I always had prepaid phones, but in recent years, those were getting pretty expensive too. I used to spend around $60 on my phone bill, but when I found out about Republic Wireless, I switched to their $10 per month phone bill which comes out to be $12 per month with taxes. I now enjoy a lower bill while still getting to keep my smartphone and use wifi to run all my apps. Switching my phone service saved me $48 per month of $576 per year.

4. Lowering My Insurance Premium

The younger you are, the higher your car insurance premiums are. My vehicle costs me a ton of money last year because I was paying off my car loan, putting gas in my car, taking care of repairs and maintenance, and paying for full coverage insurance.

As soon as I paid my car loan off, I dropped my insurance coverage down to liability to lower my premiums. I don’t recommend this option for everyone, but I consider myself a pretty safe driver and I was willing to take the slight risk. Lowering my insurance premium save me about $400 per year.

5. I Moved to a Cheaper Apartment

This is something everyone can’t do, but if you are paying too much rent, you should look into your options in other neighborhoods or even in your own. When my rent was going up tremendously in my trendy open-concept apartment with soft close cabinets in the kitchen and hardwood floors, I decided to move to a less lavish but still equally spacious 2-bedroom apartment just a few blocks away.

My son was still in daycare at the time so I didn’t have to worry about him changing schools. The apartment was very basic and didn’t have all the bells and whistles like my last one, but I made it home and enjoyed the $400 per month or $4,800 (annually) in savings the last minute move helped me generate.

Adopting a Frugal Lifestyle Was Key

I saved a total of $6,916 a year – almost $7,000 – by making these 5 simple changes and committing to a frugal lifestyle. I intentionally looked for ways to save money on expenses that I didn’t enjoy paying for and I became content with having less.

Have you taken a look at your expenses lately. If there is anything you think you can cut out or reduce? Let me know in the comments!

How My Husband and I Paid off $4,000 in Credit Card Debt in 90 Days

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Credit card debt is one of the most common forms of debt for Americans. It is often a result of getting caught up in the vicious cycle of overspending or not managing your money properly. It happens to a lot of us. Sometimes, credit card debt can be due to your spending issues or even your partner’s.

My husband and I recently cracked down and paid off $4,000 in credit card debt in less than 90 days and freed ourselves from that debilitating debt.

Before I discuss how we did it, here’s a little back story.

How a $4,000 Credit Card Debt Balance Crept Up On Us

I’ve personally never had any credit card debt. Even if I overspent on my credit cards each month, I paid the bill in full each time because I usually had money leftover thanks to living below my means. When my husband and I were dating, he had a few credit cards and didn’t pay much attention to his spending unfortunately.

We also split daycare expenses for our son which was charged on one of his credit cards each week which always made us feel like he was carrying a balance no matter how much we paid. Long story short, some expenses became difficult to keep track of, and while we didn’t take on any debt regarding our wedding we added up our joint debt total before getting married and realized my husband had about $4,000 in credit card debt.

We were shocked and a little scared to be blunt, but we knew we wanted to get rid of the debt asap and avoid paying as much interest as possible. We did a few key things to pay off $4,000 in credit card debt after less than 3 months of marriage.

We Used the Avalanche Method

Choosing a clear method or strategy to help you pay off your debt is key. To decide on the best method, consider your habits, goals, and your current cash flow situation. For us, we knew we didn’t want to pay much interest so the avalanche method seemed best.

There were 3 credit cards and one of them was still on a 0% interest promotion. We started by paying off the credit card that was costing us the most money first. It just happened to be the one with the highest balance and highest interest rate.

Then after that card was paid off, we rolled the money we had available for debt payments to the next most expensive balance until all the balances were zero.

We Used Gift Money Wisely and Prioritized

We received a generous amount of monetary gifts for our wedding. We used a little of the money for our honeymoon and a large portion of it went directly toward our credit card debt. It stung a little to put so much money toward debt when we could have done something else with it but we were committed to our priority and our end goal (debt freedom).

Aside from using our gift money, we prioritized paying off credit card debt whenever we got paid. It was practically the first bill we paid and we were happy to do it. All of our other expenses were paid for with money we had leftover and this was a fool proof way to make sure we eliminated our debt quickly.

We Lived on One Person’s Income

Maximizing how much extra money we could put toward our credit card debt was key. We decided to live off one person’s income and use the other income to make extra debt payments to speed up the process.

We created a new budget to stick to and kept our impulse purchases to a minimum in order to make it work.

Now That the Credit Card Debt is Out of the Way…

We still plan on living off one person’s income for as long as we can since we still have other debt to pay off, but it feels great to be credit card debt free again! My husband and I are thinking about closing some credit cards we no longer need anymore to avoid getting back into credit card debt and we’re committed to living well below our means.

We are hoping that we can continue to save more and work on knocking out my husband’s car loan next.

Do you have credit card debt? What is your strategy for getting rid of it?

3 Expenses You Should Always Prepare Early For

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papers-262731_1920Do you save up for certain expenses ahead of time? Or do you consider it an unnecessary hassle and resort paying for things as they come up? I’m very Type A meaning I thrive on organization, have several backup plans, and practically freak out a little too much about certain things.

When it comes to your finances, I think everyone can stand to be a little Type A and prepare for certain expenses that they know are coming up in the future. It makes things easier later on in case your situation changes and it also helps you feel more in control of your money.

Here are 3 expenses you should try to prepare early for each year.

1. Holiday Shopping

There are several holidays throughout the year, but we all know the most expensive one is Christmas. While I try not to do a ton of shopping anymore, I still like to buy gifts for a few people in my family and my son always has his eye on something. Therefore, it’s safe to say, November and December are pretty expensive months in my house. If you agree, you may want to start setting aside money for the holidays early on so you won’t have to stress when the time comes to spend it.

Set a rough Christmas budget based on your spending expectations and how much you can afford. Then, start saving a fixed amount several months ahead of time. You can even accelerate your savings as you get closer to the holidays. I started saving for Christmas in July last year and I started by setting $50 per month aside, then I increased it to $100 per month, and $200 after that.

It was nice to not have to stress during the holiday season which can be stressful enough. If you want, you can even get all your shopping done early to avoid the crowds. Having the money saved up opens the door for many possibilities.

2. Back-to-School Expenses

Back-to-school season can be a nightmare for parents who are unprepared or need to purchase several new items for their kids. Similar to when holiday season comes around, I’d rather not have to deal with the store traffic so I actually try to purchase as much as I can before August.

If you’re looking to save up for this expense though, estimate how much your child will need in terms of clothes, shoes, a backpack, and supplies and do a combination of purchasing items early and saving up in order to take advantage of sales. Even if the school supply list hasn’t been released yet, it’s easy to determine what types of basic supplies your child needs like paper, pens, pencils etc. See if your child can reuse his or her backpack for another year.

With shoes, try to take advantage of bogo deals when the time comes and for clothes, see if you can purchase them a season early. I actually scope out the sales right before spring because I know fall and winter clothing will be marked down so I buy a larger size that I can use for the following year. Saving up for back-to-school expenses right after the school year ends is a great way to keep your spending in check and obtain everything your child needs to attend school for another year.

3. Fixed Annual Expenses

If you have annual expenses like car insurance, car maintenance, life insurance premiums, membership fees, credit card fees, and even taxes, you can save up for them in advance so it doesn’t seem like your budget is taking a huge hit when they’re due.

You don’t want to deal with a financial emergency and a ton of annual expenses during the same month but it can very well happen. If the expense is over $75 per year, split it up into 12 months and set a portion of it into a savings account each month until it’s due. This strategy may not even add much more to your monthly budget.

You can label each savings contribution or use separate accounts to stay organized. I like using Capital One 360 because it allows you to open up to 25 different savings accounts and name them to keep organizes. Either way, paying for these annual expenses ahead of time will provide you with so much more peace-of-mind.

Do you save up for any annual expenses ahead of time or do you have another strategy you use for handling these expenses?

3 Things I Did When I Started Taking My Debt Seriously

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debt-1157824_1280I haven’t been in debt for that long now that I think about it (less than five years), but as soon I as graduated college, I began to detest my debt and even start resenting it. I wanted to travel, put more up for savings, and simply have fun with my money and feel like I was in control of it.

But with debt, all of these things were nearly impossible. I landed a decent-paying entry-level job a few months after graduation and even though I was earning the most money I’ve ever received from a job, I was still pinching pennies, living paycheck to paycheck and barely making ends meet due thanks to my student loans and other debt payments.

I got mad about this. I think getting mad about my situation was the best way to motivate me to make a change and develop a plan to eliminate my debt once and for all. You can be tired of something or unhappy with your situation, but unless you get really mad, you won’t have a fire underneath your butt to make a conscious change to improve your life.

When I got mad about my debt, I started taking debt seriously. Here are 3 key things I did to start making some aggressive progress toward repaying my debt.

1. I Kept Living Like a College Student

It was hard to not succumb to lifestyle inflation when I graduated and landed my first real entry-level job. Back in college, I earned about $500 per month while working part-time but now I was earning much more than that. Yet and still, I kept living like I was in college to keep expenses low.

I actually still stayed in my off-campus apartment that I rented in my college town for about a year after I graduated and commuted to work. Rent was around $600 for the two bedroom apartment I shared with my husband (boyfriend at the time) and son. I also kept my spending low and avoided buying new things for myself unless I absolutely needed to. I pretended like I was still on that low college budget and it freed up some of my income to through at my debt each month.

2. I Also Cut Expenses

Maintaining my ‘college student lifestyle’ was great, but I also made sure I cut my expenses overall to make sure I wasn’t overspending on anything. I lowered my phone bill by switching to a cheaper provider, stopped dining out a lot and learned how to cook new meals at home, cut my clothing budget down severely, got rid of cable, and negotiated lower rates with my insurance providers.

3. I Started Side Hustling

After I made sure my expenses were low and I was living a frugal lifestyle, I focused on earning more money. My job was nice, but I only received a 5-10% raise once a year if I was lucky. Like I said, my job was entry-level, so the pay was not amazing and I knew I needed to earn more if I wanted to take my life into my own hands and get rid of my debt.

I ended up starting a blog and marketing my freelance writing services a few months later in the hopes of landing some new gigs that could help me earn extra money. It was hard to put myself out there at first, and it was even more difficult to find the time and energy to complete all my assignments on the side of working full-time and being a mom.

However, I’ve always been a writer, and freelancing also became a creative outlet for me so I truly enjoyed the work which helped me keep going. As the extra money started trickling in, I started making extra payments on my debt each month. First I paid $300 extra each month, then $600, then, $800, and now $1,000+.

I paid off some high interest debt last year, got married this year, and made a huge dent in my student loans so far. I still have a long way to go, but I’m pretty sure I would still be in deeper debt and making minimum payments each month had I not gotten mad about my situation and serious about my debt.

Are you currently in any debt? Can you relate to the concept of getting ‘mad’ or serious about your debt and using it as a motivation to change your life?