Grads: My gift to you…4-Steps to creating a brighter future

I love this time of year! It’s a time to celebrate new beginnings with spring in full swing and graduation season upon us.

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Congratulations to you graduate and your family! It’s such an exciting time! I just so happen to have a gift for you. If I could wave my magic wand, my gift would be a life of financial security and good credit. Although I have no wand, I can gift you with some advice that I’ve learned the hard way and helped my clients navigate as well. So be smart, follow these steps and you’ll be on your way to building good credit and a stable financial future for yourself. Whether you are a recent grad, a parent of one, or know one, share this advice and you’ll be offering them a gift that they will enjoy throughout adulthood.

The actions you take now – as soon as you’re done with school – can set you up to have healthy credit and the ability to buy a home, perhaps upgrade your car, or afford to continue your education. Even though you may not be ready for these things today, you will want the financial freedom and healthy credit to do what you want, when you want. But first we have some adulting to do so follow these steps:

  1. Find all your loans. Often I talk to graduates that thought they were doing the right thing, making their monthly student loan payments only to discover they have late student loan payments on their credit report because there’s a student loan out there they didn’t know about. If you moved, or your parents moved, or you switched schools along the way, it’s easy to lose track. Visit the National Student Loan Data System ( to get a record of all your student loans. Make sure all your lenders have your latest address and graduation date.
  1. Consider loan forgiveness. Are you going into a teaching, medical, public service or military career? If so you may be able to benefit from a local, state, or federal student loan forgiveness program. Jay Popkey, Certified Financial Planner (CFP) with lender SoFi says “there are several loan forgiveness programs available, and researching them thoroughly for features, benefits, and eligibility criteria is a must.” You can start your research online by visiting:
  1. Set up your plan. Now that you’re organized, know all your loans and when payments begin, it’s time to set up a plan to pay off your student loans. Jay and I recommend consolidating all your student loans into one single loan, with one payment, and often at a lower interest rate with a more manageable payment amount. SoFi offers student loan consolidation and refinancing so explore your options with them. You can consolidate both private and federal loans.
  1. Put your financial house in order. Jay offers some great advice once you’ve got all your loans consolidated. He says grads often want to throw every spare dollar at their student loan debt but in doing so you can be putting un-needed stress on other areas of your financial life. He suggests:
    • Build an emergency reserve first, which is 3-6 months of living expenses saved in an account that is invested in nothing riskier than a high yield money market account.
    • Next, are you saving for other near-term goals? Start saving for longer-term goals such as buying a car or house. Start with small amounts and work from there. If your student loan has favorable terms and the interest rate you can take advantage of not having to pay back the loan in big chunks and achieve your other goals.
    • Are you saving for retirement? Yes, it’s a long way off and monthly loan overpayments may knock down that debt sooner, but the advantage of the time value of money related to saving for retirement cannot be replaced. Start a small retirement account and let that money work for you in ways that in the long-term may earn you more than the student loan interest you could have saved, by increasing your rate of contributions to your retirement savings and investment vehicles.

So, graduates, I wish you success and joy on your journey as you enter the next season of your life. Remember, with some common-sense approaches, getting through student loan debt repayment can be achieved, so keep up the good work and cheers to healthy credit.


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