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Dealing With Debt

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 We have discussed the budget and basic investing.  If this were a movie, we would now all be primed for success and wealth.  In the movies, action A plus action B equals result C and we all live happily ever after.  In real life things are more complicated.

Seventy Percent of college students graduate with student debt.  The average amount per student is $37,172.00.  This puts enormous stress on the financial situation from the start.  There is virtually no way to get away without paying this debt. Generally they cannot be excused by bankruptcy and left unpaid, can result in tax refund garnishment, wage garnishment, lawsuit judgments, and possible suspension of licenses in some cases.  Therefore, these loans must be paid, but how?

Remember our budget?  Twenty percent of our budget is left over for spending on items outside of basic requirements for living.  Using our budget example of $41000.00 average yearly income in the US,  we have $8,200/yr left to pay off debt and buy discretionary items (wants).  This is approximately

$683.00/mo.  

The average student leaves college with about $25,000 in student loan debt. The monthly payment on a $25,000 student loan is approximately $280 (assuming 6.8% interest and a 10-year repayment plan), which can cause financial strain if you’re not prepared for it. If you’ve borrowed more than $25,000, your payments will be even higher. There are also different repayment options that can change your monthly payment amount. If you don’t feel that you’ll be able to make the standard 10-year term payments, you can contact your lender to ask about other payment plans.

  Credit card debt can further complicate matters.  Avoid use of credit cards as much as possible. If you have credit card debt, pay it off as quickly as possible.  Contact your lender for payment options to fit your budget if necessary.

Above all, stuck to your budget.                                            K Ewing

https://www.cnbc.com/2018/02/15/heres-how-much-the-average-student-loan-borrower-owes-when-they-graduate.html

https://www.usnews.com/education/blogs/student-loan-ranger/2015/03/04/understand-the-consequences-of-student-loan-default

https://savespendthrive.com/save-spend-thrive/

http://www.cicmoney101.org/Articles/Budgeting-for-Student-Loan-Repayment.aspx

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