Monthly Archives: February 2015

Millennials’ Guide to Paying off Student Loan Debt

Paying Off Student Loan Debt - Millennials’ Guide


College graduates of recent years have three things in common: a degree, alumni status, and student loan debt (and we’re not talking about the tab you were running at the local pizza place). In fact, American student loan debt now exceeds the GDP of Australia, New Zealand, and Ireland combined. We hope your pizza bill isn’t that high.

All statistics aside, it’s time to have a frank discussion about millennials’ best approach for paying off that student loan debt. Let’s begin by looking at the overall financial situation, or what we call “the debt picture.”

Your Debt Picture

Do you know about all of the debts that you have, including student loans, private loans, credit cards, etc.?

Some student loans are financed through the federal government or your state while others are backed by banks and commercial lenders. Check your records to be sure you know what you are responsible for paying back.

Do you know how much time you have to repay the debt?

Speaking of paying back, you should know how much time you have to do so for each lender. In general, you won’t start paying student loans until six months after graduation, and then you have 10 years to finish your payments. Of course, some loan programs have different terms, so you’ll want to understand what kind of timeline you’re working with here. The same goes for credit cards: if you have a zero percent interest, see how long it lasts.

Do you know the interest rates?

Typically, student loans have very low interest rates, but they vary. If you have more than one loan, check to see which ones have the highest interest rates. While you’re at it, take a look at the interest rates for your credit cards, too. Again, if you have a zero percent card, check to see what the interest rate will be after the zero percent period ends.

Now that you know about all of your debts, their repayment periods, and interest rates, you can move on to the next step: your payoff strategy.

The Big Payoff

Given the enormous balance of some student loans, it’s no wonder millennials are focusing on paying those off first. However, there are a few circumstances where this many not be the best strategy. Consider the following:

High Interest Credit Cards

Students who are new to credit are likely to pay an average APR of 21.4 percent, according to a recent study. If you were paying the minimum balance each month, that APR likely has not changed. Credit cards usually carry the highest interest rates of any other loan types, except for payday loans (which we highly discourage!). For this reason, if you have any credit cards, then you may want to consider paying these off first.

Higher Interest Student or Private Loans

Once you pay off your credit cards, then it’s time to focus on other loans. If you have private loans that were used for anything other than education, they may carry a higher interest rate. If you don’t have any private, non-education loans, then you’ll want to consider paying off the student loans with the highest interest rates first.

Student Loans with the Lowest Interest Rates

This is your last stop on the payoff train. Along with the lowest interest rates, these loans probably afford you the most time to complete the repayment. This is good news, because although these loans may take longer to repay, you may not accumulate as much in interest fees as you would with a higher interest loan or credit card. Consider this: if a student charges $1,000 on a credit card and only pays the minimum due at the average rate of 21.4%, it will take 7.6 years to pay back the debt and the total amount repaid would be $1,941.


If you’re feeling the pressure to pay back your student loans, then you’re in good company. On average, 68 percent of 2013 college graduates took out loans to pay for college. The difference between you and the rest of the bunch is going to be in your approach to paying down debts in a way that works best for you.

As for your junk food habits, that one’s on you.

4 Signs That You Need a Financial Advisor

Couple invest their savings

Figuring out the future of your finances begins with an advisor.

For some of us, it isn’t easy to give others a glimpse into our financial status. It might be messy, it might be complicated, or maybe it lacks direction. Whichever category calls to you, just know that a financial advisor is going to be one of your most trusted allies in helping you get where you want to go – during many times in your life. In other words, you’ll want to keep them around.

Of course, there are some life events that could benefit from a financial advisor the most, and we’ve listed them here for you to keep in mind as you – and friends and family members – progress through the years.

New Career

Whether it’s your first job out of college or a mid-career transition, a new job can have a big influence on your financial future. You will need to consider the effect of income and benefits, and retirement accounts (both from your previous employer and from the new one). And not to rush things here, but you may even want to think about career growth in your current role and the organization. This is a good time to reevaluate your financial plans and see how this change impacts your approach to reaching certain goals (ahem – see the next few).

Starting a Business

Yes, you may be a veteran entrepreneur, but do you really know what’s going on in the way of saving enough for retirement and achieving all of those dreams for later in life? Even if you’re just thinking of opening your own business, these times are ripe for a conversation with your financial advisor. By either vetting the business plan or the current activities, the advisor can help you see the entire picture in a way that may be difficult for a business owner in the middle of – well – running the business.


First comes love, then comes marriage, then comes the rest of your life. This includes all of the financial matters that become a little more complicated with someone else in the mix. A few things you might need to think and talk about: joint bank accounts, combining debts, saving together, spending together, and taxes. The list really can go on, so to keep it all in order and on track it’s best to discuss a financial plan with an advisor who will have your most personal interests at heart.

Starting a Family

If children are part of your life plan, then a conversation with your financial advisor should be, too. While additional expenses like groceries and health care costs may seem like a given, there may be other considerations like planning for what happens if something should happen to you while the child is still a minor. If you’re planning on helping your children pay for college, then you should discuss how that impacts what you spend now and save for later.

These aren’t the only situations that can benefit from the guiding hand and wisdom of a financial advisor; in fact, a good rule of thumb is to review your plan annually to talk about recent changes, decisions, and dreams that could modify your strategy. But if a new career, starting a business, getting married or starting a family are in the picture, be sure to make time in your ever-busier schedule for a little advising.


The Picture of Retirement in the U.S.

What does retirement look like for people who are currently living and working in the United States? We rounded up some interesting statistics about savings, expectations, and social security as they relate to the later years.


Social Security Benefits

According to the Federal Reserve, almost 75 percent of retirees are using social security benefits to pay for living expenses. Considering that the yearly average benefits paid out to women 65 and older is just greater than $12,000 and $16,000 for men, it seems like there may not be much wiggle room in the budget.

Of course, retirement is different for everyone, so what may be enough for one person is not nearly enough for another. Which brings us to the next point – what kind of plans do people have for retirement? Or, in other words, what do they expect to be doing upon retiring?

Expectations for Retirement

According to the Federal Reserve, the majority of people (25.5 percent) surveyed plan to work full time until retirement, and then stop working altogether. However, almost as many people (21.3 percent) plan to work as long as possible, and 15.8 percent of people plan to retire from a current career but then find a part-time job. A much smaller percentage of people (6.2 percent) do not plan to retire. Are these statistics surprising?

Retirement Savings

What is the average dollar amount that people save for retirement? It varies by age, and changes as careers are established and people make more money (LearnVest and Chase BluePrint, 2013). From mid-20s to early 30s, the average retirement savings is $12,000. But from the mid-30s to mid-40s, this number grows five-fold. From middle age to early retirement age, the average savings for retirement is just above $100,000. These aren’t bad numbers, but they may not be able to fully support all of the plans and obligations we have later in life.

What can we do with this information?

If you’re like the average person, you might fall somewhere within these numbers. And if you’re already saving and you have an expectation for retirement, then you’re off to a great start. To find out if what you have is going to be enough to achieve your plans during retirement, talk to a financial advisor who can match your financial progress to your retirement objectives.