The cost of a college education has never been higher. Consider this sobering statistic. The average in-state tuition for Utah college students was $12,434 for the 2016-17 academic year. Unless you are wealthy or had a full scholarship, there is a very good chance you needed a student loan to pay for your education. Unfortunately, there are countless people throughout Utah drowning in debt due to their student loans. It may seem to go against conventional logic. But one of the biggest mistakes many people make is using their extra cash each month to pay off their student loans early. One solution is to pay off your student loans according to your current payment schedule.
Not All Types of Debt Are The Same
It is easy to lump debt into one big category. But the truth is not all types of debt are the same. Some require different solutions to resolve. For example, student loans usually carry lower interest rates than other types of debt, such as car loans and credit cards… The first step is to closely examine all of your sources of debt and place a higher priority on paying off those with higher interest rates.
How Much Money Should I Save?
Many people hope to pay off their student loans once they enter the workforce. But to get yourself on good financial footing, it is recommended to have a three to six-month emergency fund. It is important to understand life can sometimes be unpredictable. You may need those saving to pay for an unexpected expense, such as a medical emergency or the loss of a job. Those who have not properly saved money or have no savings plan typically fall into the trap of using credit cards or taking out loans with high interests rates. As a result, they fall further into debt.
In most cases, it best to pay off debt as soon as possible. However, if you have multiple sources of debt, you may want to hold off until later. If you have some extra cash left over from each month, put in into your personal emergency fund. Once you have enough of a cash cushion, then address your student loans.
Discover the Power of Investing
Not many people fresh out of college have the luxury of having enough money left over to invest. But if you are one of the lucky ones, you may want to start investing before paying off your student loans. The decision to be patient can actually help pay off your student loans in a shorter amount of time. The common belief is that people in debt have to make sacrifices by delaying their financial goals to pay off their debt.
Are You Drowning in Debt? A Salt Lake City Bankruptcy Attorney Can Help
Far too many people throughout Utah are drowning helplessly in debt. One of the best solutions to get a fresh start financially is to file for bankruptcy. The first step is to talk with an experienced and knowledgeable legal professional. Salt Lake City bankruptcy attorney Justin M. Myers has helped provide countless people with debt relief solutions. He and his legal team utilize a personable and comprehensive approach to help people regain their financial freedom. To learn, contact his law office today and schedule a consultation to discuss your case.