Should You Take On Student Loans? How Much is Too Much?

We have been told by our parents, grandparents, aunts, uncles, and friends that college is a necessary part of life if you want to succeed.

Whether you agree with that or not, chances are that you are attending college just in case. The second dilemma you should be contemplating is your future debt load.

should i take out student loans

I have heard countless stories (and I’m sure you have too) about students that graduate from college with a worthless degree and have amassed tens of thousands of dollars in student loan debt in order to get it! Now that they’ve graduated, they have no job, no money, and absolutely no way to pay back those loans. So should you even take on student loans? How much is too much?

To Beg For Loans or Not to Beg For Loans? That is the Question.

There are many students that don’t think twice about taking out student loans. They were told that if they get a college degree they will be successful, so why stop to think about student loan debt? Hopefully this is not your mentality. Debt can be a tool for gaining wealth, but is more often than not a disease that will keep you poor. Be very careful with debt, even student loan debt.

So when are student loans ok? Here is how I measure the validity of your student loan usage:

• What is the average yearly salary for your desired position?
• What are the odds of you landing this job?
• Take the average salary and multiply it by the percentage of you landing the job, and then multiply by 50%.

So, if you are going to college to become a teacher, do some research and find out what the average teacher salary is in the first couple years. Let’s say it’s $35,000. Then, what are the odds of you finding a teaching job? With your internships and good grades, you figure that you have a 95% chance of landing a teaching job.

$35,000*0.95*0.50 = $16,625 of student loans

In your four (or five) years that you are in college, you should not exceed a total of $16,625 in student loan debt. By keeping your student loans this low, this will provide you the opportunity to pay off your entire debt within the first five years of work. If you acquire more debt than this, you will no doubt be strapped for cash for many years.

In reality, if you can find a way to get through college with absolutely no debt, this is the best option. Work extra jobs, eat cheap food, live at home – do whatever you can to keep your expenses low and your income high (you know, high for a college student).

If you succeed at earning your degree without any debt whatsoever, you could become a very wealthy individual. While your friends are making house payments, car payments, and student loan payments, you will be smiling at your full bank account. Instead of getting yourself into debt, invest in assets that will produce money for you in the future. This is how you become financially successful in life.

Do you have student loan debt? Do you wish that you would have worked harder to avoid it?

This guest article has been written by Derek Sall from LifeAndMyFinances.com. Derek has a great passion for helping people get out of debt, save up money, and become wealthy!

Look for Love, but Commit on Money

This title just sounds absolutely terrible doesn’t it? First of all, should “love” and “money” even be in the same sentence? It just doesn’t seem right, and certainly isn’t romantic, but it is, in fact, realistic. Love is powerful, but many marriages end because of money, so it is important to yes, fall in love, but be certain that you are on the same page when it comes to money, and then commit to a lifestyle that you will both be happy with.

college girlfriend and money

It’s Honestly Hard to Tell at First

When you’re in college, it really is hard to tell who is a spender and who is a saver because virtually everyone is broke! If you had $100 in your account and I had $5 in my account, would you automatically say that I must be a spender because I have less money than you? Of course not. The difference just isn’t large enough to make that determination.

This is the same problem students come across when they find their “soul mate” in college. The expectations are quite little because the girl knows that the guy has hardly any money, and the guy knows the same thing about the girl, so they are just content to have picnics in the park or go for a walk downtown. Their time together is exciting and magical – they just can’t wait to graduate and find some jobs so that they can get married.

The Spending Patterns Change

Now that you both have jobs and are pulling in nearly $100,000 a year, the spending patterns are really starting to change. You might be a saver by nature and you would like to take the extra money and put it away in savings for an emergency or a future opportunity. However, there is a strange thing going on. Even though you both are earning more money than ever before, there are no savings. All that money that comes in each month is just vanishing by the time the month is over. It turns out that your spouse is a spender.

Learn About Yourselves Before Making That Big Commitment

Again, it is not romantic to talk about money, but boy is it ever important! Ask your special someone what they would do if they had $20,000 dumped into their account today. If they immediately start rattling off something about fancy cars and expensive restaurants, then you are no doubt in a relationship with a spender. If, however, they sit there quietly for a moment and ponder the situation, and then begin to speak of a savings and investments for the future, then you have your hands on a saver and long-term thinker.

If you believe that it is important to save money and invest for your future retirement, then you had better be with someone that has the same money values (and then commit to those). If your money values do not align with your future spouse, then there will be some rocky terrain ahead – be ready.

Feel free to talk about money with your significant other and agree on your future plans together. If you have a love for one another and can agree on the major values of life, then your relationship will likely grow stronger and stronger, and that is a beautiful thing.

Are you ready to discuss money with your significant other?

How to Save and Make Money While a Student

During your time at college or university, you’ll be living on a tight budget and trying to save money whenever possible. But getting a part-time job may be out of the question, as it could hamper your education schedule. Here are a few top tips on how to save and make yourself some money while studying:

Sell Your Old Belongings

By using sites like Ebay or Craigslist, you can advertise items of clothing, furniture or electronic equipment that you no longer need. Although you might think it is worthless and consider throwing it out, one man’s junk is another man’s jewels, so definitely consider using these online auction stores to make a few extra bucks.

Start Your Own Blog

If you are a confident writer who has lots to talk about, then starting your own blog is a great way to get some extra cash. By creating a popular blog, you can earn money through advertorials from big brands, as well as doing work for magazines or publications.

Trying Online Gaming

Online gaming sites are rapidly increasing in popularity, with more and more people playing not only socially, but as a means of making some extra money. With the likes of Facebook using social games, other online sites have profited from this from Canadian casinos to online casinos in New Zealand. Games such as roulette and poker have become two of the most played games online and are a great source of earning an extra few dollars when played responsibly and sensibly.

Vouchers, Vouchers, Vouchers!

One of the best ways for saving money on nearly anything is by checking to see if there are any vouchers available first. Sites such as Groupon are great for finding deals on anything ranging from meals out to trips to the cinema, so it definitely worth having this app on your phone. You’ll also be successful on your bargain hunt by looking in the local newspapers and publications to see if there are any coupons printed.

College Students Should Start Planning For Their Retirement Now!

Are you currently taking college courses? Do you ever wonder what your future will be like when you graduate?

Most college students don’t even think far enough ahead to picture what their lives will be like when they start working.

Still fewer yet even think far enough ahead to consider where they will be in their 30’s and 40’s. And, virtually no students are saving for retirement while they are still in college. Yet, if they did, they might be able to retire far before any of their peers. And I’m not talking four or five years before, I’m talking about 30 or 40 years before! It is all possible, but only if you start planning now.

when should i start saving for retirement?

Living Simply

Living as if you have no money in college is really easy….because you literally don’t have any money. However, when you graduate and begin your careers, you begin making major purchases like a nicer car, fancy furniture, and a large glorious house. Typically, these purchases come in the first couple years of your career, but they can stymie your retirement for more than 30 years. However, nobody thinks this is a big deal because people don’t retire until they are 65 years old anyway….right? Wrong.

Believe it or not, there are people in this world that retire at the age of 30. They come out of college living simply, save up their cash, and then peace out incredibly early because they don’t mind living simply and can easily live off their pile of cash for the rest of their lives.

So what does this mean, living simply? Let’s say a couple gets married right out of college. They have worked hard while in college and were both able to get their degrees without taking on any debt. Between the two of them, they land jobs that are earning a total of $100,000 a year ($70,000 after taxes). They rent a small apartment that is close to both of their jobs so that they only need one car, and they both ride bicycles whenever they can. Instead of paying $200 a month for cell phones with an unlimited data plan, they each have a dumb phone and only pay $30 a month in total. By living simply, they are able to get through each year on only $20,000 and therefore save $50,000 every year.

By continuing to have no debt and by investing their money, they are able to amass $600,000 after only 8 years of work. Since they only need $20,000 a year to live, this $600k is more than enough to live off of for the next 50 years if they want to (and they can of course earn additional money on their own if they want – they do not have to sit inside and just stare at each other every day).

Retirement Has Nothing to Do With Age

Does the plan above sound good to you? If it does then go for it, and realize that retirement has nothing to do with age. You just need an adequate amount of money in the bank and the mental preparedness to handle not working a traditional job.

Once you can wrap your head around the fact that such extreme saving is possible, and that you can still have a ton of fun on $20,000 a year! You can travel, enjoy your hobbies, spend time with family, and most importantly, you can slow life down and enjoy every minute! You do not have to earn $100,000 a year to make the most out of life. No sir, the quest for a large salary can actually decrease your quality of life. Check yourself and question what you would like out of your life.

Are you ready to start planning for retirement? If you are not a student anymore, when did you start saving?