finance education en-US 8 Ways to Eliminate Debt While in Grad School <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-to-eliminate-debt-while-in-grad-school" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Grad with money" title="Grad with money" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>While we were in graduate school, my then-girlfriend and I both became debt-free, and you can too. Graduate school doesn&rsquo;t have to wreak such havoc on your finances that it takes decades to recover. Here are eight tips for how to eliminate debt while in school.</p> <h3>1. Do No More Damage</h3> <p>The Hippocratic Oath is an oath taken by doctors to practice medicine ethically. Part of the Hippocratic Oath is to <em>do no harm</em>. Of course, it makes sense that patient health interests should be at the forefront of providers&rsquo; minds. I think this is also applicable to eliminating debt. A key objective during debt elimination is to do no additional damage to your finances by adding more debt. Trying to borrow your way out of a financial mess is essentially adding more financial stress and risk to your life. For example, moving your credit card debt to your house via a home equity line of credit (HELOC) may decrease your interest rates but also puts your house at risk should you default. Such activities are typically counter-productive and unwise.</p> <p>Don&rsquo;t look for a gimmick, because there is typically no substitute for applying tough discipline and hard work for a finite period. Remember, you&rsquo;re executing a plan that can lead you toward financial independence. Don&rsquo;t take my word for it; according to the <em>Forbes</em> 400, 75% of the 400 richest Americans say the best way to build wealth is to become and stay debt-free.</p> <p>Even with this knowledge, it is still sometimes hard to avoid using debt. Preparation for emergencies is one of the best ways to decrease the likelihood of going into further debt. While eliminating consumer debt (e.g., car loans, credit cards, and student loans), maintaining a starter emergency fund is often enough to catch most problems. For most people, this means keeping around $1,000 saved exclusively for emergencies (this is done before you start paying off debt). The biggest caveat is that you must have both the ability and the motivation to reasonably pay off the debt within a short period. If you know it&rsquo;s going to take you four years, that&rsquo;s a completely different story.</p> <h3>2. Develop a Side Hustle<b> </b></h3> <p>You should seriously consider a side hustle, especially if you are a salaried employee or overtime is unavailable. A side hustle is some income-producing part-time endeavor. For most people, this means getting a part-time job. By bringing in some extra income, you can accelerate your debt-freedom tremendously. If your school imposes limitations on work, you still have some options. For example, if you are more entrepreneurial, consider working for yourself via your own business. You could sell stuff on eBay or Amazon, <a href="">market your expertise</a> as a consultant, or become a virtual assistant, among other things. Remember, there are only two sides to the equation: input and output. Most people can only cut back on their budgets by only so much, so increasing your income is another viable option that should not be ignored.</p> <h3>3. Think Big With Your Side Hustle</h3> <p>Don&rsquo;t be afraid to be unconventional with your side hustle. It certainly doesn&rsquo;t have to just be for a supplemental income per se, it <a href="">could be your primary income</a>. It takes the same effort to think small as it does to think big, so why limit yourself and your income? For example, instead of being a part-time baby-sitter, you may decide to earn a few thousand a month by flipping cars or teaching executive seminars. Additionally, if you choose to go into business for yourself, you may decide that you enjoy being an entrepreneur more so than having a job in your primary major. Also, feel free to integrate your interests and your school major into your side hustle. For example, you may decide to tutor or teach a subject related to your field of interest. One way I leveraged my income as a tutor was by doing private group sessions. Remember that not everyone has your expertise, so don&rsquo;t disqualify yourself to work or consult in your field of interest just because you feel like a novice. Think about a win-win solution: Not only can you help the people you are serving by sharing your expertise, but you are building your reputation while earning extra money.</p> <h3>4. Live Like the Student You Are</h3> <p>Sure, you have worked hard to achieve your position, but that doesn&rsquo;t sanction you to be financially irresponsible. So many people work so hard to achieve academic and professional success that it is easy to forgo discipline and yield to a sense of entitlement after finishing a bachelor's degree. With all that hard work put into your education, you might be tempted to say &ldquo;I have earned this.&rdquo; Unfortunately, entitlement can be the death kiss to your finances. The problem with ignoring debt in graduate school is that the financial implications can be great. Debt can restrict your choices &mdash; where you live, the jobs you take, when you start your family, etc. Additionally, some people add to their debt while in graduate school despite stipends and tuition reimbursement. These people end up in an even bigger financial hole than before they began. This isn&rsquo;t necessarily financial prudent despite earning a degree that has the potential (and likelihood) to increase your lifetime earnings.</p> <p>It is important to resist this tendency and commit yourself to eliminating your debt even while in school.&nbsp;</p> <h3>5. Plan on Becoming Debt Free</h3> <p>If you aim at nothing, you will hit it every time. Write out a clear picture of what being debt-free looks like on paper. What will you do when you don&rsquo;t owe a payment to anyone? What charitable organizations will you patronize? How will your family budget be impacted? Dr. Steven Covey wrote &ldquo;to begin with the end in mind&rdquo; in <em>The 7 Habits of Highly Effective People,</em> because if you can see where you going, you can:</p> <ol> <li>Map out a plan to achieve your goal</li> <li>Better anticipate the challenges you will encounter</li> <li>Strengthen your effort through the power of focusing on a goal</li> <li>Stay motivated because you can clearly measure your progress</li> </ol> <p>Personally, I put my planned repayment schedule on the refrigerator, so I could stay motivated, chart my progress, and count down to my freedom! Remember, <a href="">the dream is the fuel</a>.</p> <h3>6. Apply For Fellowships</h3> <p>Don&rsquo;t hesitate to apply for fellowships even if your tuition and stipend are covered. There are still additional monies to pursue that can have a tremendous impact on your quality of life and your bank account. One of my friends was able to double his stipend by successfully obtaining a competitive fellowship. This required no additional work on his part other than writing the grant and providing annual updates to the funding agency. Additionally, some fellowships cover fees and costs associated with traveling to conferences, both of which can be significant. For example, student fees at some universities can exceed $1,000/semester.</p> <h3>7. Choose Your Major Carefully</h3> <p>Don&rsquo;t be blind to the true financial implications of choosing particular majors. I know some would like to treat the costs of attending school, employability, and the actual education obtained as if they are mutually exclusive, but life does not work out that way. Think long and hard about your employability after you graduate. Correlations have been found between majors with the most funding for stipends, tuition, and research and the ease of finding employment afterwards. This doesn&rsquo;t preclude pursuing other majors, but make sure that you have an economic model in place to support your efforts. This may mean having a working spouse or a side hustle (see tips two and three above). Just because you love philosophy is not enough reason to pay the price for that degree for the next 40 years! Also, keep in mind that subtle distinctions in degrees can also affect your employability in certain fields. For example, having a Masters or Ph.D. in Public Health is considered more marketable for some positions than having a Ph.D. in Health Policy despite the overlapping coursework and expertise. In short, <a href="">costs and benefits (future employability) must be factors in your higher education decisions</a>.</p> <h3>8. Think Carefully About Family Planning</h3> <p>This is not to say don't have kids while in graduate school, but if you do, consider the ramifications. For example, it would be practical for most families desiring to have kids to halt their debt elimination plan and pile up cash until after the child is born. One reason for this is to make sure you are not stuck with only a starter emergency fund ($1,000) with a child on the way. Also, depending on your income, saving may allow you to have the baby without incurring medical debt. Remember, this halt is just temporary, and you can resume debt-elimination efforts upon your child&rsquo;s birth. Any extra money saved during the pregnancy can be applied to the remaining debt. Having a child is such a joyous occasion, so taking a little bit longer to reach your financial goals is small sacrifice in the big scheme of things. Just be realistic about your budget, and you will be amazed by what you can accomplish.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>This is a guest post by Roshawn Watson. Roshawn writes at <a href="">Watson Inc</a> on eliminating debt, investing money, and building wealth. Get his free ebook <em>Your Foundation to Wealth</em> by <a href="">signing up for his email updates</a>. Read more by Roshawn:</p> <ul> <li><a href="">Why Do We Save Anyway?</a></li> <li><a href="">The Problem With Being Budget Minded Is Other People!</a></li> <li><a href="">7 Surprising Facts About Millionaires</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Roshawn Watson</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">How to Stop Student Loans From Ruining Your Life</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">12 Easy Ways to Avoid Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">Student Loans: How to Make Post-College Decisions</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Share Your Thoughts: Consolidating Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training college finance education graduate school Wed, 17 Nov 2010 12:01:09 +0000 Roshawn Watson 302023 at How to Financially Educate Your Children <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-financially-educate-your-children" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="kids and money" title="kids and money" class="imagecache imagecache-250w" width="250" height="155" /></a> </div> </div> </div> <p>You have the power to create and mold your child&rsquo;s financial imprint. It is through your own actions, discussions, and attitudes towards money that your children will develop habits &mdash; both good and bad &mdash; that will carry them through and last a lifetime. They won&rsquo;t learn it from anybody else; finances are not taught (at least not thoroughly enough if at all) in schools, and nobody else is going to show them how to succeed in life and avoid the huge <a href="" title="10 Financial Frights to Avoid">financial pitfalls</a> that lurk around every corner.</p> <p>So do your child a favor and give them a huge helping hand! Here are a few ways you can help them create a healthy relationship with money:</p> <h3>1. Don&rsquo;t Bribe Them With Money</h3> <p>By offering money as a reward for good behavior, your kids will learn that money is an end, instead of a <em>means to an end</em>. <strong>Try rewarding them with tangible life-enhancing experiences</strong> which the money would buy, like taking them to the movies, or out for a family lunch. Better yet, you can reward good behavior with things that don&rsquo;t require money like having a sleepover with friends.</p> <h3>2. Go With the Flow</h3> <p>If your child wants to count the coins in your purse, let them. Use the opportunity to <strong>help them understand what each coin is worth</strong> and their relative value. You may even help them identify what each coin can buy (if anything). If they receive birthday money, then talk about the benefits of opening a <strong>bank account</strong>. As money works its way into your child&rsquo;s life (and it will), use the opportunity to talk to them about it.</p> <h3>3. Allowances: Stick to the Plan</h3> <p>If you give your child an allowance, <strong>be exact and consistent with the amount and timing of each payment</strong>. This will get them used to timing and managing their income stream, as they will need to do when they later have jobs and careers.</p> <h3>4. Allowances and Pocket Money: Pay Yourself First</h3> <p>The best way to get your kids into the habit of paying themselves first is by doing it right from the beginning. Discuss long-term and short-term savings, and <strong>encourage them to put at least 10% of their allowance either in a bank account or even a piggy bank</strong>. The piggy bank option will require additional discipline (on their part) not to delve into it for candy, and could go two ways. On one hand, irresponsibly accessing their long term savings (maybe they are saving up for a video game) may affect their ability to reach their goals; a great lesson to learn &mdash; the hard way &mdash; early on in life. Then again, using a bank account instead may take just enough of the <a href="" title="Impulse Shopping: A Controllable Handicap">impulse urges</a> out of their hands to help them achieve their goals and feel the satisfaction of getting that video game after saving up for it.</p> <h3>5. Put a Positive Spin on It</h3> <p>Even if you don&rsquo;t have a positive attitude towards your own money matters, don&rsquo;t allow your children to inherit this unhealthy disposition. <strong>Don&rsquo;t let them associate money with anxiety or stress</strong>. Instead, teach them practically how money can help achieve their goals and get the most out of life through avenues like creating financial independence, creating a better world with charitable contributions, and even giving it to loved ones. Again try to stay away from the idea that money is an end or is happiness in and of itself; instead show how <em>money can be a conduit to positive things</em>.</p> <h3>6. Talk About It, Lots!</h3> <p><strong>Money is not a taboo subject</strong>, even though we may have been raised to believe it is. If you aren&rsquo;t comfortable telling them how much money you personally have in the bank (either because you believe you are not a shining example or because you simply don&rsquo;t want to), then that&rsquo;s okay. But when your child asks why you can&rsquo;t go to Disney World, this is an opportunity to discuss the household&rsquo;s budget, the cost of living, vacations, and entertainment. <strong>Involve them in the family finances</strong>, and they will learn to take ownership naturally &mdash; a skill that will take them through life.</p> <h2>Money Milestones</h2> <p>Involving your kids in the family budget when they are only three years old may be a bit of a stretch. Instead, consider these money milestones as a way of incorporating finance education seamlessly into their lives.</p> <h3>Coins</h3> <p>When your kids start to become curious about pretty coins and money in general, educate them as to the value of coins and what they can buy. <strong>It also makes a great lesson in math</strong>: start with pennies as building blocks, then introduce higher value coins as their numerical repertoire increases.</p> <h3>Bank Account</h3> <p>As soon as pocket money and birthday gifts start adding up, take them into the bank to open an account. There are lots of child-friendly accounts out there, so make sure you <strong>actively involve them in the process</strong>. They will derive great pride from having their own account. This is when you start to discuss the concept of <em>earning interest on savings</em>.</p> <h3>Budgeting</h3> <p>Now that they have a bank account and the ability to save up for things, it is time to start budgeting. If they receive an allowance, hopefully they are already paying themselves first and putting away at least 10%, as with money received as gifts.</p> <p>They are also probably talking about toys they want (like video games). So help them budget for it! <strong>With pen and paper in hand, help them construct a budget by determining how much their toy costs, figuring out how much they currently have, and calculating how long it will take them to save up for it.</strong> Seeing the plan on paper may encourage them to save more than just 10% towards their goals, depending on how motivated they are. Again, this is a great exercise in applicable math.</p> <h3>Extra Income</h3> <p>Let&rsquo;s say your child is now motivated by their budgeting goals, and eager to reach them sooner. You could consider paying them extra pocket money for additional chores performed (they call this &ldquo;overtime&rdquo; in the working world, and it is <a href="" title="Outsourcing Your Life">outsourcing</a> for you!), or help them if they want to earn money entrepreneurially. <strong>Teach them good business principles if they come to you wanting to open a lemonade stand</strong>, and help them to launch their enterprise successfully, starting with a <a href="" title="6 Small Business Pitfalls">solid business plan</a>.</p> <h3>Investing</h3> <p>As your child continues to understand and appreciate the delayed gratification of saving and budgeting, and has a good handle on the interest their bank account earns, they may be ready for something more. Talking about various investments is the next step. A small lesson in big business and stock investments could turn into a game, as they <strong>follow the share price of companies they are familiar with, like Coca-Cola, or Disney</strong>.</p> <p>Although having them invest their hard-earned pennies in the stock market is not recommended just yet, you could set up a mock investment account, and get them to follow the value of their money along with the stock (again, a great lesson in applicable math). Even if they forget about it for a while, a reminder a year or so down the road that they had &ldquo;money&rdquo; invested and what it is now worth may lead to a pleasant surprise about market growth; or conversely a rude awakening about market downturns.</p> <h3>Family Finance</h3> <p>As your child gets a good grasp on the above financial matters (they will likely be in their teenage years by now), it is time to <strong>involve them actively in the family budgeting and finances</strong>. Help them to understand what their own <a href="" title="Vision Boards: Dream Big">short term and long term goals</a> are, such as the cost of higher education (even if you plan to pay for it), and eventually getting a car (or conversely what their <a href="" title="10 Ways to Be Nicer to the Environment">alternative transportation options and costs</a> would be), housing, and the cost of getting set up comfortably to live on their own (and hopefully, before the age of 35)!</p> <p><strong>When it comes to family vacations, involve them actively in the process</strong>, by working out with them the cost of various vacation options and funds available, and then decide together what the family would most enjoy doing. Budget together for excursions and <a href="" title="The Easiest Way to Save Money on Vacation">souvenirs</a>, and your kids will take ownership of the trip and learn to appreciate the experience so much more. Not only that, but they will be much less likely to try to guilt you into unreasonable expenditures since they already know what the budget is; they may even help other family members to stay on track!</p> <p>You may not see yourself as the world&rsquo;s best financial example. But this is no reason to sit back on your haunches and do nothing; in fact this will only increase the chances exponentially that your kids will follow suit! Instead, be prepared to come clean with your own mistakes, and celebrate your victories, in order to help your kids learn from you and start their own financial lives on the right foot.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Nora Dunn</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">7 Money Lessons We Can Learn From Beyoncé</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">9 Ways Getting Married Is Good for Your Finances</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Why the Time Value of Money Matters, and 10 Ways It Affects You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Life Hacks children and finance children and money finance education finance schooling financial education financial schooling Thu, 09 Oct 2008 01:42:49 +0000 Nora Dunn 2505 at