17 Questions Every College Graduate Has (But Is Afraid to Ask)

If you're graduating from college, your work is only beginning. Here are some of life's questions for which you'll need answers.

May is a big month for college graduates. There’s all the last-minute details with finishing school – finals, papers, moving, selling stuff. There’s the family, the cap and gown, the parties, the sad farewells. Then after all that, there are the questions. What now? Where will I go? What will I do? We can’t answer all of them for you (you’ll have to decide to keep or dump that college sweetheart on your own). But here’s a good start at answering some of the questions you may have when it comes to money.

1. What Should I do With Graduation Money I Get From my Family?

Lucky you! Resist the urge to spend it all upgrading your hostels to hotels on that summer trip to Europe. Instead, use half of it to pay down debt or pay for your move to a new city, and the other half to invest for the future, preferably, retirement. Really. Read the parable of the Two Twins. In short, it shows that people who put away money for retirement in their twenties — and stop by age 30 — end up with more money than those who save nothing in their twenties but save from age 30-65. It seems impossible, but it’s true. Those who invest in their early twenties have an amazing advantage over everyone else.

2. When do I Have to Start Making Student Loan Payments?

Most student loans come with a six-month grace period, meaning the first payment is due seven months after graduation. For most of you, that means this November, unless you’re headed to graduate school.

3. Should I Go to Graduate School?

That depends. While it’s tempting to put off “real life” (and student loan payments) for a few more years, many people can benefit from working for a few years before returning to school. Studies can be more focused when students are sure they are studying a field they plan to pursue. A few years working as a paralegal in a law firm can disavow you of the notion you want to be a lawyer, which will save you a lot of money and strife through law school. Of course, in some fields, like medicine, graduate school is a prerequisite, so attending right away can make more sense. But it’s important to remember: The majority of folks who are drowning in excessive student loan debt incur that debt in graduate school, not during undergraduate studies, so poorly-planned grad school can become a real problem.

4. If I Must Start Repaying my Loans, Can I Lower my Payments?

Yes. There are many ways to do this, but all of them can have negative consequences. With federal loans, the simplest way is to select a “graduated repayment plan.” This allows borrowers to pay less now, and more later – payments usually go up every two years —  with the assumption that recent grads will earn more as time goes on. All borrowers are eligible, but it means borrowing more money for longer, which means more interest paid. Beyond that, the Department of Education has numerous plans available to borrowers. Consolidation loans can extend payment terms for up to 25 years – but of course the interest paid will soar. There are also various income-based repayment or loan forgiveness programs. These can be reviewed at the Department of Education websites. You can learn more about what happens if you do default on your student loans here.

5. What Should I Do to Prepare for a Job Interview?

Google yourself. Clean up your social media accounts. Erase, or at least make private, those keg stand pictures.  Then, prepare, prepare, prepare. Learn everything you can about the company you are about to interview with (and even the person if that information is available to you). Read the job description carefully and at least appear to be excited about the specific tasks that will be required of you. Know that while the ad may say “Join an exciting team and help build a life-changing product,” you could be spending nine hours a day composing social media posts. At least, at first. Embrace that. And, maybe get a new suit. You can find 50 more steps grads can take to find their first job here.

6. It’s my First Job, What Salary Should I Ask for?

The average starting salary for college grads this year is $49,785, according to advisory firm Korn Ferry. That’s not a bad starting reference point. And it’s up 3% from last year. Some professions get more, some less. Software developers earn 31% above average; customer service reps, 28% below. Check out more numbers from the Korn Ferry analysis.

7. How do I Make a Budget?

Budgets don’t have to be complicated. Type into a spreadsheet the costs you know (or guess) for rent, utilities, TV/video, Internet, car, phone, student loan repayments, food, entertainment and whatever else applies. Add it all up, then compare it to your take-home pay. If the first number is higher than the second, you’re going to have to make some cuts, so start figuring out what you can live without. At the end of the month, take out the credit card bill and see how realistic your projections were. Then add lines where you missed things – lines for travel, or savings, or emergencies (they happen, sometimes monthly). Then repeat, every month. You’ll get it. It might be painful, but keep at it.

8. Should I Put Money in a 401K or Pay Down Debt Instead?

Yes! You should do both —save and pay down debt at the same time. It’s a BIG mistake to pay extra to lower your student loan balance at the expense of contributing enough to your 401K to at least maximize your company match. That’s free money you should never leave on the table.

9. Should I Live With Roommates?

For most people, housing is the biggest monthly expense. Ideally, rent will cost no more than one-third of your income. Keep in mind, though, that it’s essentially impossible to afford an average-priced two-bedroom apartment one a single average income anywhere in the U.S. One bedrooms also can be are expensive, so while you may be tired of living with roommates, your best strategy is to live like you are in college for a few more years and save your money. Living with roommates can be the quickest route to owning a home in your thirties.

10. How Much Money Do I Need to Buy a House?

The median home price in the U.S. right now is $189,000. To make a traditional 20% down payment on that would be $37,800. A 5% down payment, accepted in many situations with higher fees, would be about $9,500. Of course, in many populous cities, prices are much, much higher. For example, the median home price in Washington, D.C., is $549,000 – a 20% down payment there is $109,000, and 5% down is $27,500. Some mortgage programs, like FHA loans, allow first-time home buyers to have even less money down, but those come with other fees, and of course, the monthly payment will be higher. Speaking of monthly payments, would-be buyers need to remember house payments also come with insurance and property taxes. Then, there’s maintenance and surprise repair costs. So, save while you can.

11. How Much Does a Wedding Cost?

From $100 to $100,000, or more. Seriously. You can Google the cost of an average wedding, and you’ll quickly find averages in the range of $25,000 to $30,000. But these numbers are based on online surveys, which are self-selecting. Averages are skewed by extremes, plus an “average” wedding in New York will cost more than one in St. Louis. You, you can spend as little or as much on your nuptials as you choose, but guess which one is financially smarter. You can go simple and put that cash toward a down payment instead.

12. How Much Money do I Need to Start a Family?

That’s not an easy question to answer, but here are a few data points. It costs $233,610 to raise a single child through age 17 (not including college), according to the U.S. Department of Agriculture. That’s just one child. Of course, you don’t need it all at once. A kid costs about $12,000-$14,000 annually. Costs will vary regionally, and on your taste in clothes and schools, and on your health insurance plan. Kids are expensive – the average cost of just having a baby in the U.S. is about $10,000, and that’s without any complications.

13. OK, Then. How do I Make More Money?

The easiest way is moonlighting in the gig economy. Drive an Uber one night per week (do it on a weekend night and you’ll save by not spending!) Rent out your place on AirBNB. Sell things on eBay or Etsy. Volunteer for overtime.  Most of all, hone a skill that’s desirable, like software coding. And don’t forget the most obvious: Ask for a raise at your current job …

14. How Do I Ask for a Raise?

Never forget that how much compensation you get from a company is a simple business negotiation. You don’t get to ask for more money because you need it. You have to ask for more money because you are worth it. Do your research. Go to places like Salary.com, Indeed, or Glassdoor and learn if you are paid commensurate with others in your profession. If you aren’t, that’s a good starting point. Chiefly, do a quiet job hunt and see what others in the market might pay you. The best way to get a raise is to get a counter-offer.

Also, note these two disturbing trends in many salary surveys: Workers often don’t get raises any more, they get bonuses, which help corporations keep down their long-term liabilities (it’s easier to kill a bonus than lower salaries when times get hard). And many workers today find the only way to get a real raise is to change jobs.

15. There Are no Jobs in my Major. What Should I Do?

Don’t give up your first love, but be realistic. Right now, the best-paid American workers and the most plentiful jobs are in software, engineering, and health care. Can you switch to one of those fields, and pursue your love of music or the arts on the side? Can you sell what you make on Etsy, but still have a day job? Could you write code during the day, and tutor children at night to fulfill your love of teaching? Creative thinking is your friend here.

16. What Do I Do if I Can’t Find a Job?

Start with part-time work. Research professions that offer piecework which might be similar to the field you wish to enter. FlexJobs maintains a list of jobs you can do from home. Consider joining the gig economy for a while.

17. I Don’t Know What I Want to Do. What Should I Do?

Read. Read a lot. Read books like What Color is Your Parachute. Talk to people. Talk a lot. Most important – DO SOMETHING. Anything. Work in fast food, or work at a Walmart. You can learn something at any job. Even if you hate it, that’s one thing you can cross off your list. And just maybe, you won’t hate it. But above all, don’t do nothing.  Wracking up credit card debt and student loan interest during your twentiess can haunt you for the rest of your adult life. Whatever you do, earn money and tread water. You’ll figure it out.

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13 Confusing Student Loan Terms You Need to Know

It's important you understand your student loans, and that starts with learning the meaning of the terms you're likely to encounter in the student-loan worl

There’s no need to sugarcoat it: Student loans are complicated, and everyone from new borrowers to those who’ve been paying them for more than a decade find them confusing. As much as you might want to not think about them, it’s important you understand your student loans, and that starts with knowing the meaning of the terms you’re likely to encounter in the student-loan world. Here are 13 confusing loan terms you need to know.

1. Servicer

Your student loan servicer is the company to whom you send your student loan payments. It may or may not be the place you got your student loans in the first place, and your servicer could change as you repay your loans. Federal loan borrowers can find out their student loan servicer by logging into the National Student Loan Data System. If you have private student loans, your student loan servicer is the institution from which you borrowed the money.

2. Repayment Options

Federal student loan borrowers can pay back their student loans in several ways, and they can change their plan at any time for free (though it can take some time). The options include plans that allow you to lower your payments based on your income and plans that allow you to spread out your payments over a longer term. You can read more about your student loan repayment options here.

3. Forbearance

Forbearance is a temporary suspension or reduction of your student loan payments when you are unable to make payments as a result of financial problems, medical expenses, unemployment or “other reasons acceptable to your loan servicer,” according to the Education Department. Your loan will continue to accrue interest during this time and will be added to the principal balance when you exit forbearance. You must apply for forbearance. There are several circumstances under which your servicer is required to grant forbearance (mandatory forbearance), including a medical or dental internship or residency, National Guard duty and many others. You can only receive forbearance for 12 months at a time. If you have a private student loan, check with your lender to see if they offer forbearance.

4. Deferment

Deferment is a temporary suspension or reduction of your student loan payments during certain situations like unemployment, economic hardship, enrollment in school or active military duty, among others. You are not responsible for paying the interest that accrues on some student loans during deferment, but you are for most. You must request deferment, and you can stay in deferment as long as you meet the requirements. If you have a private student loan, check with your lender to see if they offer deferment.

5. Student Loan Forgiveness

There are several programs that allow you to get rid of some or all of your federal student loans, and you can read about them here. Keep in mind you may have to pay taxes on the forgiven balance, as the IRS may see it as income.

6. Delinquency

You are delinquent on a student loan when you haven’t made a payment on your student loans for 30 or more days since your last payment’s due date. Your student loan servicer will most likely report the late payment to the major credit reporting agencies, which will hurt your credit. (You can see how your student loans affect your credit standing by viewing your free credit report summary on Credit.com.) Delinquency also tends to come with late fees.

7. Auto Debit

Many student loan servicers call automatic payments “auto debit,” meaning your payment is automatically taken from your bank account on the due date every month. You can often get an interest rate reduction by enrolling in auto debit. It’s usually at least 0.25 percentage points.

8. Default

Default means you have not made student loan payments in a long time, and as a result, your entire student loan balance is now due. Your loan will have likely been sent to a debt collector at this point. For federal student loans, you enter default after you’ve failed to make a payment for more than 270 days. That time period is generally shorter for private student loans. You can learn more about the (very) negative consequences of student loan default here, as well as how to recover from it.

9. Refinancing

Refinancing your student loans means taking out a new loan to pay off your existing loans, ideally to make your loans more affordable. For example, you can take out a student loan that has a lower interest rate than the average interest rate of all your existing student loans, which can save you money over the life of the loan. Student loan refinancing requires taking out a private student loan, as the federal government offers no refinancing option. You could also refinance a student loan by paying it off with a home equity line of credit.

10. Consolidation

A federal consolidation loan combines all your eligible federal student loans into a single loan with one payment. The interest rate on that loan is the weighted average of all the included loans’ interest rates, rounded up to the nearest one-eighth of one percent.

11. Subsidized

With a subsidized loan, the government pays the interest on your student loan while you are in school or in deferment.

12. Unsubsidized

With an unsubsidized loan, you are responsible for all the interest that accrues on your loan during school, deferment and forbearance. If you do not pay the interest during that time, it is added to your principal loan balance.

13. Capitalized Interest

Any interest you accrue while not in repayment can be added to your principal balance, meaning you will pay interest on top of that interest. That’s capitalized interest.

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6 Vital Things Parents Need to Know About Student Loans

Before helping your child take out loans — or taking out loans in your own name — make sure you understand the benefits and drawbacks.

About 3.5 million high school students are expected to graduate from high school this spring, and most will go to college. While this a proud moment for students and parents, many families are stressed about how to pay for school in the fall.

Before helping your child take out loans — or taking out loans in your own name — make sure you understand the benefits and drawbacks. Here are six things every parent should know about student loans.

1. There’s Still Time to Complete the FAFSA

For your children to get federal student aid such as loans, grants and work-study programs, they must complete the Free Application For Federal Student Aid (FAFSA) every year.

If your child hasn’t completed their FAFSA yet, there’s still time — but not much. Though the federal deadline is June 30, 2018, states and individual schools often have much earlier due dates.

Moreover, schools have limited funds when it comes to some loans and grants, so the earlier your child applies, the better. To make sure you get the necessary funds, submit the FAFSA as soon as possible. You can complete the application online in less than 30 minutes.

2. Take Advantage of Federal Loans First

You’ll find out what types of federal aid your child is eligible for after completing the FAFSA. If your children need to take out loans to pay for school, encourage them to start with federal student loans rather than private ones.

Federal loans typically have lower interest rates, more generous repayment terms and do not require a lengthy credit history or a co-signer. Plus, they come with benefits such as access to income-driven repayment plans and deferment or forbearance options if your child struggles to make payments after graduation.

Private student loans can have higher interest rates and typically require a co-signer. They also have fewer repayment options, which can make keeping up with payments more difficult on an entry-level salary. Private loans should be a last resort used to fill the gap if federal loans don’t cover the total cost of college attendance.

3. Learn How Parent PLUS Loans Work

If you want to help your child pay for school but don’t have enough money saved to pay outright, you may be eligible for a parent Direct PLUS Loan. This is a federal loan designed specifically for parents of dependent students.

To be eligible, you must be the biological or adoptive parent and your child must be enrolled at least half-time at a qualifying school. Both you and your child need to be U.S. citizens or eligible noncitizens. Unlike other forms of federal loans, parent PLUS Loans require a credit check.

To get a parent PLUS Loan, your child should complete the FAFSA. You will sign a PLUS Loan master promissory note. You can borrow as much as the cost of your child’s education, minus any other financial assistance you receive. The current interest rate for Parent PLUS Loans is 6.31%.

4. Think Twice Before Co-Signing

If your child needs a private loan to pay for school, the lender may require a co-signer before approving them. Before you agree to cosign, make sure you understand what it entails.

Becoming a co-signer means you’re the guarantor of the loan. If your child falls behind on the payments, you’re responsible for making them. If your child misses a payment and doesn’t tell you, your credit will be damaged. That consequence can make it more difficult for you to get approved for other forms of credit, such as a mortgage or car loan. (You can see how student and other loans impact your credit with a free credit snapshot on Credit.com.)

Co-signing is a huge responsibility, so make sure you’re comfortable with the potential fallout before putting your signature on a loan application.

5. Know Discharge Rules

While no one wants to think about themselves or their child dying or suffering a serious accident, it’s important to understand a loan’s rules about these events before taking on student debt.

If your child has federal loans and later dies, the government will discharge the debt. If you have a parent PLUS Loan and either you or your child passes away, the loans are also eliminated. If your child becomes permanently disabled and can no longer work, they can get their loans forgiven through Total and Permanent Disability Discharge.

Private loans are different. Some lenders discharge loans in the case of death or disability, but not every lender offers this. There have been horror stories about parents who have lost a child, yet are still responsible for the student loans. Make sure you understand the lender’s rules before taking out or co-signing a private loan.

6. Prioritize Yourself

Though supporting your children through school is a wonderful gift to offer, take a hard look at your finances first. If you have other forms of debt or your retirement savings are too small, prioritize your own finances.

Your children can get grants, scholarships and work part-time in school to pay for college. If they struggle to repay their federal student loans, there are a wealth of plans and programs to help them get back on track.

The same is not true when it comes to credit card debt, personal loans or retirement. If you fall behind on payments or don’t save enough before you stop working, there are few places you can turn for help. Ensure you are in a secure financial position before taking on more debt for your child.

Know Your Funding Options

Before signing loan paperwork, make sure you know exactly what you’re getting into. Student loans can be complicated, and if you’re not careful, you could be on the hook for thousands in debt. Work with your children to ensure you understand all your options and obligations as you prepare to send them off to college.

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Moving to One of These 9 States Could Save You Thousands

Should you move to one of the nine states with no income tax? Here's how to decide.

Each year, taxpayers pay trillions in income taxes. In fact, the government collected approximately $3 trillion last year. If you’re like most taxpayers, you owe both federal and state taxes, which means an even bigger chunk of your paycheck goes to the government.

When you’re carrying debt — whether it’s student loans or a credit card balance — it can be frustrating to see so much of your hard-earned money leave your hands. That’s why many people consider moving somewhere with no state income tax.

According to a new study by Student Loan Hero, taxpayers could save an average of $1,977 a year by moving to a state with no income tax. But before you pack your bags, find out what factors you should keep in mind.

States Without Income Taxes

States that collect income taxes use them to fund essential programs and services for residents. More than 50% of state tax revenues go toward education and healthcare initiatives, such as Medicaid. State agencies also use collected income taxes to pay for services, including transportation and law enforcement.

Residents in most of the country must pay federal and state income taxes. However, nine states don’t levy any state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Because you don’t have to pay state taxes, you can get a significant yearly savings.

How Much Could You Save?

How much you could save by moving to a state with no income tax depends on your income bracket and where you live now. For example, Oregon workers have a state income tax of 7.75%, the highest rate of any state in the country. Someone earning the median salary in the state — $49,710 — would pay $3,851 in addition to their federal taxes.

Moving to another state to save that kind of cash can be tempting. So tempting, in fact, that 30% of survey respondents would move to a state with no income tax to save money. Moreover, 38% of respondents said they’d use their tax savings to accelerate their student loan debt repayment. (To see how student loans are impacting your credit, check out your free credit report snapshot on Credit.com..)

Using Your Savings for Debt Repayment

The savings you get from not paying state taxes can save you even more money in the long run. Using that money to repay your loan helps you pay off the loans faster, cutting down on interest charges. It can also save you thousands over the life of your loan.

For example, say you had $35,000 in student loans with an interest rate of 6.31% (the current rate for Grad PLUS loans) and a minimum monthly payment of $400 a month. Now, take the average $1,977 you would save by moving to a state without income tax and divide it up over 12 months. That would give you an extra $165 in your pocket each month. If you put that additional amount toward your student loans, you could pay off your debt about three and a half years early and save more than $4,500 in interest.

Other Costs

Before packing up and moving to a new state, consider other costs that may eat into your savings. Between putting down a deposit on a new apartment, moving your belongings and registering your vehicle in a new state, you can spend thousands.

In addition, some states with no income tax make up their revenue through other means, such as sales tax. Florida has a 6% sales tax on goods and services, including essentials such as clothing or food. If you’re not used to paying taxes on groceries, the added sales tax can put a dent in your budget. That’s why it’s important to compare the cost of living when deciding if it’s worth it to move to a new state.

Moving to Save Money

Depending on your circumstances, moving to a state with no income tax can give you a substantial savings. You can use that money to pay off your student loans faster, boost your emergency fund or catch up on retirement savings. But before you make the leap, be sure you understand the added expenses of moving so your decision is financially sound.

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How to Make Moving Back Home Work for You

Moving back home doesn't have to be the end of the world. Here are tips for surviving and getting out.

I’ve moved back home with my parents twice: Once after college to work at a nearby internship and again after breaking up with the person I was living with.

My parents were, at least outwardly, cool about it both times. They never charged rent, which probably made me feel more guilty about mooching off them and spurred me to move out faster.

More than half of post-college millennials moved back in with their parents after college, according to a recent survey by TD Ameritrade. Not all of them have parents as cool as mine, and the mix of emotions involved with shacking up in your childhood bedroom can lead to tension. So if that’s where you find yourself, here are a few tips for making it work.

How to Prepare

Before you plan to move home, you should have a plan to leave, said Susan Newman, a psychologist and author of “Under One Roof Again: All Grown Up and (Re)learning to Live Together Happily.” Know how you will eventually move out and discuss a possible move-out date with your parents.

“It helps you focus a little more on your job hunt,” she said.

If you don’t have a job yet, don’t stress. Here are 50 things you can do to score your first job.

If the date passes, you can always reassess.

You should also talk about your schedule. When you were in high school, your parents might have expected you for dinner every night. Now that you’re an adult, if that’s not the case, you should have a conversation to reset those expectations so Mom doesn’t get offended when she makes your favorite dish and you’re at the bar.

How to Have a Social Life

While you may want to have friends or dates over whenever you want, you still need to respect your parents’ feelings, Newman said. After all, it’s still their house.

Kate Moore, a 26-year-old content creator with Precision Marketing Group, has lived at home for about two months. She said it’s best to establish boundaries on day one.

“You’re used to gallivanting around town at all hours of the night and returning when you felt like it,” Moore said. “Now that you’re back under your parents’ roof, you need to maintain a delicate balance between respecting their space and maintaining your freedom.”

If you expect to be able to come and go as you please, make that clear, but also promise to be considerate.

How to Avoid Clashes

If you had tension with your parents before you moved out, don’t expect that to go away this time around. Make sure to address it head-on once you move back in, Newman said.

For example, if talking about politics always leads to an argument at the dinner table, Newman suggests making clear that is an off-limits topic for both of you. If your parents have disagreed with you on certain issues your whole life, like your style, friends or politics, come to an agreement that you won’t let those issues come to a boil.

Some parents simply won’t listen. It can be hard for the people who taught you how use the toilet to treat you like a fellow adult.

“One thing that might help a lot of the time is to say to your parents, ‘Wait a minute, I’m not the little kid I was before and I really don’t like being treated like a teen who just got my driver’s license,'” Newman said.

However, that also means acting like an adult. Clean up after yourself and don’t expect your parents to do everything for you.

How to Avoid Feeling Like a Mooch

Moore said her parents charge her only as much rent as their utilities increased from her living with them. She said other people moving home should work out how they could contribute to the costs in bills and food they’re accumulating for their parents. Little gestures help, too.

“Sometimes I delight my parents by bringing home a case of paper towels or a gallon of 2% milk,” Moore said. “Small contributions to the greater household will go a long way.”

Don’t act like a guest, Newman said. If you don’t have a job, find other ways to help, like making dinner or mowing the lawn. Yard work for neighbors might also be a good way to earn some extra money.

How to Benefit

You’re not just getting free meals and discounted rent, Newman said, but a chance to spend time with your parents while you’re adult instead of a child they’re raising. Young people should take advantage of the opportunity to get to know their parents, in addition to paying off their student loans or building up their savings. (See how to lower your student loan payments here.)

“As a young adult, and as a parent who’s not racing off to the soccer field for the third game of the weekend, you have more time to talk,” Newman said.

How to Get Out

Whatever your reason for moving back home, whether it’s to chip away at student loan debt or to find a job, pay off credit card debt or simply to save money, it’s important to know what your monetary target is and make a plan for getting there.

Even if you don’t reach your goal by the the time you agree to move out, whether it’s six months or a year, your parents won’t necessarily kick you out if you’ve shown progress, Newman said.

Moore said a mix of rent prices in the area, student loan debt and credit card debt led her back home. Since moving, she’s paid off one of her credit cards. (Paying off a credit card means you’ll lower your credit utilization, and ultimately improve your credit scores. Having good credit scores can help you land better terms and conditions on things like an auto loan or mortgage. Want to see how your credit card debt is affecting you? Check out a free snapshot of your credit report on Credit.com.)

Young adults moving back home shouldn’t feel like they’ve failed, neither should parents whose kids haven’t quite left the nest, Newman said.

“You don’t have to feel guilty,” she said. A lot of young adults lean on their parents to some degree, even if they don’t move back home.

“My son still brings home his laundry,” she said.

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How to Build Wealth After Graduation

You've just graduated college and you'd like to be wealthy someday. Get started now.

You’ve just graduated college and you’d like to be wealthy someday. Problem is, you have no clue how to make it happen. First, you’re broke and may be drowning in student loans. Second, no matter what the experts might say, it feels like there are tons of fellow grads fighting over a handful of jobs. Third, though you don’t mind hard work, you don’t want wealth to come at the expense of a social life, a family and the chance to do some good in the world. Should you give up the dream and content yourself with an average life?

Not at all. It’s completely possible to become a multimillionaire before you retire. Right now you have an advantage you never will again: youth.

Many young people have no concept of how simple it is to build wealth. Not easy, because hard work and self-discipline are required, but simple. Any intelligent person with an ordinary career trajectory can do it. But now is the time to get started. With every year that passes, your window of opportunity closes a little more. Sounds good, right?

Understanding the Astonishing Power of Compound Interest

If you take a penny and double it every day for a month, how much would you end up with? A hundred dollars? A thousand dollars? How about a million dollars? Not even close. Starting with a single penny, if you double it every day for 31 days, you end up with $21,474,836.48. That’s compound interest. That’s how you get rich. And that’s why, when it comes to wealth building, your age gives you a major advantage.

Starting with your first job out of college, you can try investing 15% off the top. By the time you retire, you’ll be a multimillionaire. Yes, you’ve heard the “pay yourself first” principle before. But you probably don’t realize just how wealthy it can make you. Let’s say you start making an average graduate’s starting income (which, according to The National Association of Colleges and Employers, is $52,569 a year, as of 2016). Assuming you are good at your job and get consistent annual raises of 4%, you’d be making $77,815 a year 10 years from now, and $252,385 in 40 years. Not only will you be making more money, but you will also be able to save more money. If you consistently (and that means every year) deposit 15% of your income into investments, compound interest will begin to accumulate like you wouldn’t believe. Assuming a return of 10% a year, you’d be worth more than $5.4 million when you are ready to retire. (Assuming, of course, that you put this money aside and aren’t spending it on things you shouldn’t be.)

Where Should My Money Go?

First, pay the government because things can get troubling if you don’t. Second, pay yourself. Put the aforementioned 15% of your income in some sort of investment. Third, pay the interest on your debts, such as credit cards, student loans, car loan, etc. Keeping debt low is critical. (Your credit utilization level — the amount of debt you carry in relation to your overall credit — is a major influence on your credit scores. You can find out where yours stand by viewing two of your scores for free on Credit.com.) Fourth, pay for non-critical parts of your life like entertainment, travel and toys.

Don’t succumb to the temptation to pay for prestige. A big part of being able to save the requisite 15% involves not blowing your paycheck on expensive cars, high-dollar meals and trendy couture. But that needn’t mean depriving yourself. Beautiful, comfortable clothes are not cheap, but they don’t have to cost a fortune. You can buy a great pair of slacks for $150 or you can spend 10 times that amount. The difference will be the label on the waistband. The point is this: The best material things in life are affordable. They are not cheap (quality never is), but if you buy them selectively and use them with care, you can enjoy a life as materially rich as Mark Zuckerberg on an income that wouldn’t get him through lunch.

Landing That First Job

Of course, this advice hinges on your finding a decent-paying first job. (To start, you can read these 50 things recent grads can do to score their first job.) Depending on where you’re applying and your prospective industry, you may also want to consider the following ideas during the application process.

  • Forget the standard resume-cover letter program. Instead, write a direct marketing letter that lets your prospective employer know you understand what their problems are and that you have the solutions.
  • Call the office of your prospective future boss and ask for a short, informational interview. This is a great way to get in that locked door and find out a lot of personal and professional information about your prospect.
  • If you feel you might not get the job you are seeking, suggest that you can do a project for the company on a freelance basis, perhaps for free.

Right now, you may think becoming a millionaire is not a laudable goal. You might say money doesn’t matter. Well, it may not matter now, but it will when your kids are applying to colleges or when you’re approaching retirement. Financial independence frees you to live a rich, fulfilling, authentic life. And that’s the true definition of wealth.

This article originally appeared on The Dollar Stretcher.

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How Some States Are Fighting to Protect Student Loan Borrowers

Some states are looking to add Bill of Rights laws to help keep student loan borrowers from drowning in debt.

The student loan crisis is starting to feel a lot like the housing crisis of the last decade, warns Illinois State Attorney General Lisa Madigan — a swelling economic disaster with millions of fragile borrowers unable to get timely help or good advice. If that seems like an overstatement of the situation to you, consider this: A stunning 1-in-3 student loan borrowers are late on loan payments, and several studies show struggling borrowers often don’t know about programs designed to lower their monthly payments.

Unwilling to wait for reforms from Washington, D.C., Illinois and other states are taking matters into their own hands by passing new consumer protection laws called the Student Loan Borrower Bill of Rights.

“There’s been almost no oversight of the student loan industry,” says Madigan, adding that student borrower complaints to her office have skyrocketed right along with the total outstanding student loan burden, which now sits at $1.4 trillion, owed by 44 million Americans.

Madigan helped craft her state’s legislation, which was inspired in part by a recent lawsuit filed by Illinois against Navient, the nation’s largest servicer. The measure recently advanced out of a Senate committee there.

Another Looming Financial Crisis?

“This is work we really didn’t think would ever come our way. But it resembles the mortgage foreclosure crisis. There are many of the same problems, like poor customer service, lost paperwork,” she said. “It’s very clear there is a need for enhanced consumer protections and clear servicing standards.”

The Illinois lawsuit accuses Navient of steering struggling borrowers into forbearance rather than providing them with adequate information about cheaper repayment plans. (Navient says the allegations are “unfounded.”)  But other research shows borrowers clearly aren’t getting the message about available options. In 2015, a study by the GAO found that 51% of people making their student loan payments would have qualified for lower payments, but only 13% of the borrowers knew to ask for the lower payments.

Since good advice can be hard to get, borrowers are “increasingly turning elsewhere for help, including to scam artists who exploit desperate borrowers, much like they did during the mortgage crisis,” Madigan’s office said in announcing its legislative victory.

Need Help With Your Student Loans?

If you’re falling behind on your student loans and aren’t sure what options are available to you, you can check out whether you’re eligible for a student loan forgiveness program or repayment plan. You may also be considering deferment or forbearance of your student loans until you can get your finances in order. Just keep in mind as you sort through the potential options that your student loans have an impact on your credit scores, which can affect your financial goals in both the short and long term, so make sure you keep up with payments as best you can and communicate with your loan servicer to see what options might be available to you.

Enter the Student Loan Bill of Rights Laws

Were the Illinois law to pass, the state would join Connecticut and Washington, D.C., which recently enacted Student Loan Bill of Rights laws. Several other states are weighing similar legislation.

The new laws generally require loan servicers to obtain a license in each state, which gives state watchdogs additional oversight capabilities. The laws also create an ombudsman who can receive and act on complaints from residents, and critically, states set requirements that good advice be shared with borrowers.

States are jumping in because prospects for a national student loan bill of rights, introduced by Sens. Dick Durbin and Elizabeth Warren in the last Congress, are unlikely with the current leadership in Washington.

Obama-Era Protections Killed

Also adding urgency are criticisms that Betsy DeVos, the new head of the Department of Education, has rescinded Obama-era rules that opponents say would have helped protect borrowers. On May 8, 21 state attorneys general sent an open letter to DeVos criticizing her rollback of the new rules.

“DeVos has removed those protections and prioritized the profits of servicers over helping struggling student loan borrowers,” Madigan said. “The need for Illinois to put in place a Bill of Rights is because there won’t necessarily be protections at the federal level.”

The Department of Education didn’t immediately respond to a request for comment.

Should Illinois and other states succeed in passing such laws, they would all be in the odd position of trying to regulate federal student loans and firms working under contracts with the federal Department of Education.

It’s an open question, however, if states can really regulate federal loan programs. Supporters of the bills say states have the right to protect their residents from fraud and abuse, but it’s possible that loan servicers could ultimately challenge their authority in court.

Navient directed questions for this story to the Student Loan Servicing Alliance, which criticized what it said could become a patchwork of laws.

“Servicers help student loan borrowers repay their education loans, and avoid the negative consequences of serious delinquency and default,” said Winfield P Crigler, executive director. “This work is best achieved in a clear regulatory environment. The U.S. Department of Education, which is the lender for more than 90% of new student loans, already uses its regulatory and procurement powers to supervise federal student loan servicers. We believe state regulation of student loan servicing will conflict with federal policies and requirements, and will be a detriment to the very borrowers we intend to help.”

But supporters point out that state-level consumer protection laws can be more effective.

State-Level Consumer Protections Could Help

“Consumer protection at the state level fills critical gaps when the Feds are asleep at the switch. Many states are frustrated that the Education Department has been too cozy with the student loan industry, so they’re looking to protect borrowers in their state,” said Rohit Chopra, senior fellow at the Consumer Federation of America.

States are taking other steps, too. California is considering a law that would cap private student loan debt garnishment at 15% of wages, for example. Several other states have enacted programs making it easier for student loan holders to refinance.

Chris Lindstrom of the Public Interest Research Group welcomes the flurry of state-level activity. Federally, the job falls to the Consumer Financial Protection Bureau, which she fears may lose its authority or influence soon.

“It’s onerous (regulating) the student loan space, especially when looking at the scope of the problem. It’s good to have more eyeballs on what’s going on,” she said. “Then there’s also the whole hedging bets situation, since nobody knows what the next Congress will mean for the CFPB.”

Lindstrom said the state-level ombudsman would be the most tangible and helpful change for borrowers.

“Having a place where you can go to complain and having that complaint count,” she said.

State-level laws would apply only to state residents: An Ohio resident who studied at the University of Chicago would get no relief from the Illinois bill, for example. On the other hand, an Ohio State graduate living in Illinois would be protected.

Ultimately, however if a critical mass of states pass and enforce new rules, the impact could ultimately be nationwide.

“If a slew of large states enact similar legislation, this could be the medicine the industry needs to treat borrowers fairly nationwide,” Chopra said. “We saw a similar approach a decade ago with toxic mortgage lending, where states looked to protect homeowners through new state laws.”

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7 Money Tips Every College Graduate Needs

Yes, you need to find a job and a place to live, but don't let that throw a wrench in your budget.

While senior year of college is hectic, it’s crucial for new grads to stay on top of their finances. Sure, you need to find a job and a place to live, but you can’t wait until those things fall in line to start paying attention to your bills and your budget. Of course, that’s exactly what some people do, which can lead to debt, a lack of savings and credit problems.

To help you (or the new grad in your life) stay focused, we put together a list of money tips to keep in mind during the transition from college student to full-time adult. We asked Alex Sadler, managing editor of personal finance site Clark.com and the money-basics series “Common Cents,” to share her top tips for managing money after college.

1. Spend Less Than You Make

This one sounds obvious, but it’s easy to lose control when you have an apartment to furnish, want to live a vibrant social life or haven’t quite gotten the hang of grocery shopping. And to know whether or not you’re spending less than you make, you have to track your spending.

“It’s easier said than done, but it’s something you can live by for the rest of your life,” Sadler said. “If more is going out than coming in, find ways to pick up extra cash.”

Keep in mind a large component of spending less than you make is saving properly. Sadler suggested automating your savings by participating in an employer-sponsored retirement plan, especially if your employer offers a savings match. You may also be able to set up automatic transfers to a savings account, so you’re less able to money on things you don’t need.

2. Don’t Ignore Your Student Loans

A huge part of spending less than you make is knowing your exact expenses. If you’re like most college students, you have student loans to repay soon. Even if your first payment isn’t due for a few months, you need to know what you’re dealing with now.

“Most college graduates don’t know how much they owe until their first bill comes in the mail,” Sadler said. And because of accrued interest, you may owe more than you recall borrowing. “Figure out exactly how much you owe and what your options are: Do you qualify for loan forgiveness? Income-based repayment?” Your student loan repayment options vary depending on the kind of loans you have. Get a handle on them now, so you don’t miss a payment and damage your credit. Here’s a helpful guide to understanding student loan repayment.

3. Know You’re on Your Own

Being responsible with money doesn’t mean you can’t have any fun, but it is on you to understand how to balance your needs and wants.

“Nobody wants to say, ‘I’m on a budget, I can’t go out,’ or ‘I can’t do that, I’m on a budget,’ when you’re 22 and you’re super excited about being in the real world,” Sadler said. At the same time, you have to own your decisions. “At some point, there won’t be anyone there to help you. Once you figure that out, it gives you a sense of motivation to really have control of your money, and it motivates you to understand the fact that money is what gives you freedom in life.”

4. Pay Attention Now — Or Regret It Later

“How you handle your money in your early 20s is so much more important than you realize at the time,” Sadler said. “Those choices will impact your finances for the next 10 to 15 years.”

Sadler speaks from experience. In her early 20s, Sadler had a couple hundred dollars on a store credit card that she ignored. She let the late payments stack up, which is one of the worst things you can do to your credit. “When I realized it at like 26 or 27, I paid it off in full, but there’s nothing you can do about those late payments,” she said. “I’ve fixed it, but it took a lot.”

A lot of young people adopt the mindset that they’ll pay off debt or save more later when they have more money. “But later never comes,” Sadler said.

5. Plan for Everything

You’ll never have more time in front of you than now, so start planning. Incorporate long-term goals like buying a house or saving for retirement into your regular budget, as well as short-term goals like vacation or large purchases. Planning ahead is the only way you can make those goals happen.

“I was knocked upside the head in my 20s when I asked my dad for $1,000 to go to a bachelorette party in Mexico,” said Sadler. “He looked at me and said, ‘Have you lost your mind?’ And I said, ‘I can’t pay for it.’ And he said, ‘Then you can’t go.’ ”

Doing the things you want to do requires discipline and may involve more planning than you realize. “It’s not never going out or eating ramen noodles, but it’s paying attention,” Sadler said.

6. Manage Your Basic Expenses

Maybe you feel like there’s hardly any money left over for fun things after you’ve budgeted for bills and loan payments. Remember, you’re not necessarily stuck with those fixed expenses. Sadler recommended re-evaluating your cellphone plan, shopping around for competitive insurance rates and finding cheaper entertainment options, whether that means cutting a subscription or switching service providers. The research is worth the time if the savings can give you more flexibility.

7. Get a Credit Card & Use It Responsibly

Your credit standing plays more of a role in your day-to-day life than you may realize. It factors into your insurance premiums in most states, affects your ability to get an apartment and can even come into play when you’re getting a new job. If you haven’t started building credit, now’s the time to start. You can see where your credit stands and track your progress toward a better credit score with a free credit report snapshot from Credit.com

Sadler emphasized the importance of using a credit card wisely and cautiously: “You need to pay the balance in full every month to avoid interest, so just use it to charge things you know you can pay off,” she said. “Understand the implications of using a credit card irresponsibly — one missed payment can seriously damage your credit.”

Want more guidance on how to be financially responsible after college? Here are 50 smart money moves to make before (or right after) you graduate.

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What Employers Want From the Class of 2017

We found out what qualities and skills recruiters are looking for in new graduates during hiring season.

Summer is near, and for the class of 2017, that means it’s about time to get a grown-up job.

While we’re sure you’re all charming and talented, we wanted to help you by asking jobs experts what recruiters want to see from new graduates this summer. Hopefully these tips can help you polish your resume or change your approach to interviews and land that post-graduation job.

What Skills Are Most in Demand?

Monster, the employment website, recently released data on entry-level job postings that showed the top “hard skills” employers want are computer-related, including quality assurance, structural query language and Java. Other skills in high demand are pediatric specialization and knowing another language.

If those skills aren’t already in your toolbox, don’t fret. Monster also compiled the most sought-after “soft skills.” They include oral and written communication, marketing, Microsoft Office, being detail-oriented and problem solving (pro tip: these key words should be in your resume if you have these skills).

Applicants can demonstrate good communication skills through impeccable cover letters and resumes, said Vicki Salemi, career expert for Monster. Also, prepare well for interviews and speak clearly.

Keep your cover letter succinct to ensure it “pops” for recruiters who might spend only seconds reading it, she said.

“Think of your resume as a sheet of paper and you have a yellow highlighter,” Salemi said. “What two or three things would you highlight to show a recruiter that you’re an incredible candidate?” Once you know that, you know what your cover letter should focus on, she said.

If they’re not proficient in Microsoft Office, Salemi recommended taking online tutorials. Don’t take this lightly: Some recruiters test candidates to make sure they’re proficient in Word, Excel and PowerPoint.

Where Are Employers Hiring?

Monster’s data also included the cities that had most entry-level job postings. Salemi said new graduates should certainly consider applying where the jobs are, but also make sure to have a plan to get to far-flung cities quickly if they need to attend an interview or, even better, get hired.

“Hiring can actually happen quickly as many times as it may feel like it’s dragging,” she said.

While cities like New York and Washington have plenty of jobs, there is also plenty of competition, Salemi said. Depending on the industry, some graduates should also be sure not to ignore suburbs where employers might have more trouble attracting young applicants.

What Recruiters Like

Be likable, Salemi said. Yes, it sounds obvious, but as when she worked as a recruiter, and two candidates left were identical on paper, it came down to who seemed like they would fit better in the company interview.

That means be respectful, but be yourself. When it comes time for small talk, make sure your personality shines through.

“The top thing they’re looking for is someone we can see fitting in there,” Salemi said. That means someone who won’t stress out while dealing with a tight deadline, someone they wouldn’t mind working late hours with and someone who has more to chat about at the water cooler than work.

And if the job search doesn’t pan out right away, recruiters want to see that applicants haven’t wasted their summer. Employers are looking for resilience and an openness to change, according to Marc Cenedella, CEO of Ladders, a career site. There’s no better time to demonstrate that than during a dryer-than-expected job search.

“They want to see that you’ve done something with your time,” Salemi said.

Salemi recommends volunteering or taking local classes to keep your skills sharp and build your network. Getting part-time work during the job search might also help those who need to start paying back student loans. (You can see how student loan debt affects your credit with a free credit report snapshot from Credit.com.)

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9 Questions to Ask About Student Loans Before You Graduate

Graduation's around the corner, so don't put off asking the hard questions about how to handle your student loan debt.

It may not be your first priority, but preparing to repay your student loans should be on your pre-graduation to-do list. How you manage your student loan payments will shape your finances for decades to come, so know what you’re dealing with before you get swept up in the day-to-day demands of post-graduate life.

Before you leave school, also make sure you know the answers to the following questions. Good news: We’re giving you them (or at least telling how to find them on your own).

1. What Kind of Loans Do I Have?

You either have private student loans or federal loans. You can look up your federal loans using the National Student Loan Data System (NLDS). You should have the paperwork from your lender or student loan servicer (private and federal) from when you took out the loan. Private loans generally come from traditional banking institutions, while federal loans are issued by the government. Common federal loans include Direct subsidized loans, Direct unsubsidized loans and Perkins loans.

2. Whom Do I Owe?

You can find this information in the resources referenced above. Your financial aid office should have information on file as well, since they receive the money. If you haven’t gone through student loan exit counseling at school, you need to before you graduate. They’ll explain whom to pay, and it’s the perfect time to ask any questions. Once you know who’s managing your loans, set up an online account to access all your information.

3. What Are My Repayment Options?

This depends on the type of loans you have. Private student loan repayment tends to follow a typical installment loan repayment structure, in which you make monthly payments for a fixed loan term. Federal student loans offer more options. The default play is called standard repayment: fixed monthly payments for 10 years. If you want a lower monthly payment when you start out, you can change your repayment plan at any time for free, though the change may not take effect immediately. If you want to enroll in an income-driven repayment plan, graduated repayment or extended repayment, be sure to request a new plan through your student loan servicer as soon as you can. You can learn more about student loan repayment options here.

4. How Much Are My Monthly Payments?

For loans with a set repayment term, the payment will be the same every month if you have a fixed-interest rate (as all federal loans do), or your monthly payment amount will change if you have a variable-interest rate (as some private loans do). Monthly payments through income-driven plans will depend on how much money you make. You should be able to get this information from your lender or servicer.

5. When’s My First Payment Due?

Federal student loans generally have a grace period of six months, meaning your first payment comes due six months after you graduate, leave school or drop below half-time enrollment. Some grace periods are nine months. If you have a private lender, you may not have a grace period — find out as soon as possible.

6. How Do I Pay?

You’ll start hearing from your lender or servicer soon if you haven’t already. Like most bills, you can go the old-school route of sending a check, or you can pay online. Keep in mind you don’t have to wait till your grace period ends to make a payment, and you can also enroll in automatic payments to make sure you don’t miss any. On that note: You don’t want to miss any student loan payments, because it will damage your credit, and your credit score plays a role in how much you pay for other credit products, as well as renting a home or buying a cellphone. You can keep tabs on how your student loans are affecting your credit by getting two free credit scores every month on Credit.com. If you’re thinking about getting a credit card after college, here are a few good options for new grads.

7. What’s My Interest Rate?

This should be in your loan paperwork and in your online account. Make sure you know if it’s a fixed- or variable-interest rate.

8. How Can I Make Repaying My Loans Easier?

If you have multiple federal student loans, which most borrowers do, you can consider consolidating them. With a federal Direct consolidation loan, you can qualify for certain loan forgiveness and loan repayment options (though you may not have to consolidate to qualify), and you’ll only have to make one monthly payment, rather than several to multiple servicers.

You could also consider refinancing multiple loans with a private lender, but know that you’ll be giving up many of the benefits that come with federal loans if you do this. There is no federal refinancing option. You can also enroll in automatic payments to make your life a little easier — just be sure to check that it goes through every month and that your bank account has enough money to cover the bill.

9. How Can I Make My Loans More Affordable?

Among the benefits previously noted, enrolling in automatic payments usually gets you a 0.25% discount on your interest rate. Private loan refinancing could also help you save money if you have good credit and can qualify for a lower interest rate. Additionally, changing your repayment plan to a longer term or an income-driven plan can lower your monthly payments.

There’s another way to look at loan affordability: long-term savings. For example, all the interest your loan accrued while you were in school will be added to the principal once your grace period expires, meaning you’ll have to pay interest on interest. You can avoid this by paying off the interest before your first loan payment comes due. You can also pay more than your minimum payment each month, which can help you pay off your loans early.

Student loans can be complicated, so reach out to your student loan servicer if you have questions. Conversely, if you’re having issues with your student loan servicer, you can file a complaint with the Consumer Financial Protection Bureau.

Credit.com can offer help with your student loans, too. If you have questions about them or other money stuff, leave your questions in the comments. 

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