College is expensive. A large portion of students borrow loans to assist with their tuition bill and their living expenses. How will these loans impact your long-term financial plans? Do you have a long-term financial plan?
We recommend not only educating yourself on your current financial responsibilities, but avoid situations that could cause issues in your future. Like credit cards and excessive loans--did you know that one in nine people ages 18-24 uses more than 40% of his or her income to pay off debt? If your monthly income is $2,000, that means $800 each month is leaving your hands to pay down debt. Yikes!
It often feels like credit cards are "free money," because you're not handing over cash for your purchases. But when the bill comes, students quickly find out credit cards with high interest rates and fees come with high monthly payments. To maintain good credit, you must make your monthly payments on time. If you make only the minimum payment, you'll be paying far more for your iced mocha macchiato than you expected. Just $1,000 can take more than seven years to pay off if you only make the minimum monthly payments! Late payments and other fees can prolong debts exponentially.
So, what can you do? Well, you should first create a budget (and stick with it)! If you find yourself exceeding your budget, you will either need to change your spending habits or generate some income. Did you know that ISU employs over 6,000 students? Next, avoid scams and companies that are after your money. Finally, contact the Financial Aid office if you find yourself with leftover refund money. You can lower next semester's loan to reduce your overall loan debt by watching your spending.