3 Crucial Financial Decisions To Make During And Soon After College
BY SCOTT BAY
When you envision your future, it’s unlikely you imagine yourself living paycheck to paycheck and struggling to build up your savings account. Rather, you may picture yourself working in the field you’re truly passionate about, making a sizeable income, and saving a considerable amount of money in your retirement fund. It’s a dream to become both financially stable and independent while pursuing your career.
However, without continuous preparation and planning, your future ambitions may be at risk. At times, it may feel difficult to plan for the future, while striving for immediate success. Nonetheless, there are a few simple things you can do now to anticipate the exact future you want
- Reduce Your Insurance Rates
With tuition, textbook, and housing rates on the rise, you may feel that insurance is a luxury you can’t afford. However, many insurance carriers (including State Farm, Allstate, and Farmers) offer insurance discounts to full-time students who maintain high grade point averages. Many of these discounts can save you up to $300 a year.
Utilizing insurance discounts protects your income and assets against unexpected events, losses, or damages. For example, during the 2015-2016 school year, 79 percent of public schools reported one or more incidents of violence, theft, or other crimes. Students who were uninsured had to cover costs for medical treatment or property replacement themselves. Enrolling in an insurance plan may save you from going hundreds or thousands of dollars further into debt. Significant debt from unexpected events can damage your credit, which can affect your ability to qualify for housing or get an auto or home loan.
Taking advantage of reduced interest rates can benefit you even after you’ve graduated college as you may qualify for a great life insurance policy. Once you marry and begin a family, enrolling in a life insurance plan is vital as it ensures your loved ones are not left to settle your debts themselves should something happen to you.
- Get Out of Debt
Endless amounts of interest payments and an inability to improve your income level are only a few ways debt weighs you down. You may feel as though you’re trapped in an endless cycle of financial woes and have little-to-no control over your life. Getting out of debt allows you to regain control and become financially stable.
Getting out of debt leads to better job prospects and overall job satisfaction. The ability to freely spend your money instead of paying interest payments can motivate you to work harder and increase your efficiency level. Furthermore, regardless of your income level, there are many ways you can start paying off your debt now. Creating and sticking to a budget enables you to save more money each month, some of which you can use to get out of debt.
Becoming debt-free improves your credit score and enables you to build up your savings account. It also allows you to make major purchases with less stress (such as buying your first home). In fact, having little-to-no debt may qualify you for a lower monthly mortgage payment. Bottom line: a strong credit score and a balanced savings account are crucial for a successful future.
- File for Student Tax Credits
Despite the substantial financial burden of obtaining a secondary education, tax season can bring some monetary relief. Student tax credits and deductions can help increase your tax return and reduce the amount deducted from your paychecks.
Tax credits like American Opportunity or Lifetime Learning cover up to $2,500 of education expenses. Tuition, student loan interest, and fee deductions can all reduce the amount of taxes you owe and maximize your return.
Utilizing tax credits and deductions enables you to lower your bill and build up your savings account with a higher tax return. Additionally, lowering the amount of taxes taken from your paychecks increases your income level. Each of these tactics may enable you to get out debt faster.The Takeaways
As you perceive your plausible future, it’s crucial to start preparing for it now. Continuous preparation enables you to minimize uncertainty and better anticipate your needs. Whether you are just beginning your college experience or have recently graduated, it is never too late to start strategically thinking about the future.
Regardless of your age or life experience, you should carefully consider each of these three tips when planning for the years after graduation. You’ll never know how much stress (both monetary and otherwise) you’ll save yourself.
Scott Bay is a digital journalist who covers technology, travel, and wellness — catch his latest
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