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College Students and Recent Grads

Reduce Money Stress: Learn How to Budget with 4 Easy Strategies

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Depressed man slumped on the desk with his hands holding credit card and currency

Creating a budget has the same thrill level as getting an impacted a wisdom tooth removed. For some, the wisdom tooth might even be preferable. But a budget will prevent that “where did all my money go?” feeling and subsequently help you build wealth.

Fortunately, there are multiple ways to budget so you can find one that suits your personality. But first, you need to learn the building blocks of a budget.

What you need

  1. Figure out how much money is coming in each month
  2. Tally up your monthly expenses including: rent (or mortgage), groceries, transportation expenses, debt repayment (credit cards and/or student loans), cell phone bill, utilities and your “fun fund.”
  3. Set a percentage of money you save each month.
  4. Subtract your monthly expenses and set savings from your monthly income to determine how much wiggle room you have each month

These steps are the foundation of budgeting. Next, you need to figure out which style of budgeting is right for you.

Types of budgeting

The penny tracker

A budget extraordinaire subscribes to the penny tracking lifestyle. Every item he or she buys is meticulously tracked, totaled and compared against an allotted budget.

The penny tracker will create itemized lines of how much can be spent per month on specific categories, ie: food, rent, bills, and entertainment.

All the money a penny tracker spends is carefully written down (or monitored through an online service).

For example, if Tammy has $300 allocated for food each month, she’ll write down all the money she spends on groceries, morning lattes and going out to eat. Each time she spends money on food, Tammy writes it down and then subtracts it from her budget to see how much is left for her to spend.

The beauty of this method is the ability to see where all of your money is going. There is never a surprise about the sudden drop in a bank account or a particularly high credit card bill. It keeps accountability high and also helps plug leaks in a budget.

By tracking each penny you spend, you’ll be able to see if you’re consistently throwing cash at a non-essential purchase that could be put elsewhere, like debt repayment or saving up for a large purchase.

If you don’t want to be a penny tracker for life, you should still take a month to track all of your spending. This exercise will help illuminate any trouble areas you may have and keep you from wondering, “where did all my money go?”

The “leftovers” spender

A slightly more practical style of budgeting, the “leftovers” spender subscribes to the mentality of paying him or herself first, taking care of all the bills and then using the remaining money at his or her own discretion.

Save it, spend it, do what have you because it’s the “leftovers” in your budget.

It looks something like this:

Sam earns $2,200 a month (after taxes and a 401(k) contribution).

Each month he owes:

  • $800 for rent
  • Approximately $120 for utilities
  • $65 for his phone bill
  • $250 for student loans
  • $250 for car insurance and gas
  • $300 towards savings
  • $200 to groceries

$215 is leftover each month. This means Sam can use that $215 towards entertainment or pad a different area of his budget, perhaps food, or throw money towards debt repayment or savings.

This style of budgeting keeps people from feeling the need to constantly track every penny and keep rigid tabs on their spending, but it still can prevent overspending by simply being aware of how much you have to spend.

The 50/30/20 Rule or the Envelope Method

It’s a common rule of personal finance, but the 50/30/20 rule is similar to the leftover spender mentality. You allocate 50% of your budget towards fixed expenses (all those delightful bills), 30% towards saving or other financial goals and the spare 20% towards flexible categories (which might include groceries because the cost fluctuate).  Some experts might say 30% for “fun/flexible” spending with 20% towards savings and debt repayments.

Regardless, it’s a method which distributes your income towards various categories and it’s up to you to monitor your spending to ensure your 20% flexible spending doesn’t really turn into 50% of your monthly pay.

The envelope method uses a similar strategy and is not meant to be taken literally.

Instead, it’s a mentality similar to the 50/30/20 rule in which you allocate a specific amount of your budget to certain expenses (or saving goals).

If you do take the envelop method literally, keep your cash in a locked safe box in your home and recognize you’ll be losing money on interest by not keeping your funds in the bank.

Online resources

Tracking your money doesn’t have to mean whipping out pen and paper to jot down a note to yourself, nor does it mean tallying up all the receipts you have stored in your wallet.

Instead, you can use apps or online tools to help monitor your budget. Popular tools like Mint.com, a free service which allows you to sync credit cards and bank accounts with your profile, help keep track of your spending automatically. Mint provides a weekly email update with an overview on your spending habits. If you spend cash, you’ll have to proactively add in what you spent.

You can also try your hand with apps like Level Money, Budget Ease or Prosper Daily. Plenty more exist, so if one doesn’t appeal to you then move on to try something else.

Or, just kick it old school and track your money with pen, paper and a spreadsheet.

Budgeting saves you money

Without any sort of budget, it’s easy to let yourself slip into debt, rack up a large credit card bill or stop saving for the future. Budgets may not be the most enjoyable task, but they’re an important part of financial health —consider them the broccoli of personal finance.

Got questions? Get in touch via TwitterFacebook or email (info@magnifymoney.com) 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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College Students and Recent Grads

6 Best Reasons to Refinance Student Loan Debt in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Like the beginning of a new year, student loan refinancing can offer you a fresh start.

And this time, you could enjoy a lower interest rate or reduced monthly payment, as well as choosing which lender or servicer helps you reach the finish line.

These are among the six reasons to refinance your student loan debt in 2019.

1. Reduce your rate

After staggering four rate hikes across 2018, upping its benchmark by a full percentage point, the Federal Reserve is expected to impose increases of roughly half a percentage point during 2019.

Although it’s difficult to pinpoint the perfect time to refinance your student loans, this year could be the right time for you, as banks, credit unions and online lenders are still offering relatively low rates.

Don’t simply rely on lenders’ advertising, however. To qualify for the bottom of their best rate ranges, you’ll need a strong credit score and a healthy debt-to-income ratio. A steady, well-paying job helps, too.

You might treat 2019 as the year to strengthen your refinancing application, even if you decide it’s not the year you’ll be able to snag that super low rate.

A lower rate equals greater savings. Say you refinance $30,000 on a 10-year term and manage to cut your original average rate of 8% down to 5%. You’d save $5,494 over the next decade — no small chunk of change.

Check out our student loan refinance calculator to see what your own numbers look like.

2. Stretch your paycheck

Some borrowers see refinancing as a way of lowering their interest rate, but others see it as a pathway to reduce monthly payments.

A smaller monthly due could stretch your paycheck, which could be helpful if debt repayment isn’t your only financial goal for the year ahead.

By refinancing your federal loans and their 10-year standard repayment plan, you could switch to a longer term with a private lender. Most lenders offer you the ability to choose a term anywhere between five and 20 years.

If temporarily lowering your payments via refinancing is your top priority, shop around. You might be surprised by what you find. LendKey, for example, offers interest-only payments for up to four years.

As you seek a lower monthly payment in 2019, keep a couple of caveats in mind. By choosing a longer repayment term, for example, your loan repayment becomes progressively more expensive. That’s because interest will accrue and capitalize onto the principal loan amount.

Say you refinanced that $30,000 loan to a longer, 20-year term. Despite lowering your rate from 8% to 5%, you’d pay an additional $3,839 in interest over the life of your loan.

Also, don’t forget about the federal government’s income-driven repayment plans. With a plan like income-based repayment, you could tie your dues to a percentage of your discretionary income — and hold on to government-exclusive protections, such as access to loan forgiveness programs. It’s a preferable alternative to refinancing for many borrowers.

3. Snag some perks

If you’re considering refinancing federal loans, you might be worried about what you’d be giving up. The list includes access to loan forgiveness, plus the ability to switch repayment plans or receive mandatory forbearance.

Although private lenders won’t offer the same protections, their benefits are getting better and better all the time.

Consider some of the recent innovations being offered by top-rated lenders:

  • SoFi’s Unemployment Protection program lets you pause your loan for up to 12 months, and it includes career coaching support to find your next gig.
  • Earnest allows you to choose your payment due date, select from a much wider assortment of repayment terms than at most lenders, and skip one payment annually.
  • CommonBond has pioneered hybrid loans for student refinancing, offering a loan that blends fixed and variable rates.
  • Laurel Road is among the group of lenders that give a parent the chance to refinance federal PLUS Loans in their child’s name.

If an atypical loan feature makes refinancing right for you, survey the landscape in 2019 to see if any reputable lender offers the benefits you seek.

4. Simplify your repayment

If you’re holding federal loans, you might be cautiously optimistic about NextGen, the Department of Education’s plan to reorganize how student loan servicing works. If it fulfills expectations when it arrives sometime in 2019, NextGen will allow you to make your monthly payments in one place at one time.

“Cautiously optimistic” are the operative words here. NextGen is a massive undertaking, and government projects can sometimes move more slowly then we’d like, so you might not want to count on the new platform simplifying your repayment.

On the other hand, refinancing offers you that simplicity now. By replacing your federal loans (and private loans, if you have them), you’re not just receiving a new interest rate and repayment term. You’re also simultaneously consolidating (or grouping) them by replacing them with a single refinanced loan.

5. Choose your lender

When you first borrowed federal loans, you weren’t given the option to select your loan servicer.

Refinancing, however, allows you to choose your lender based on whatever criteria matter most to you. For example, you might be seeking a lender that services its own loans or offers a unique perk (see point No. 3 above).

Regardless of what you want in a new lender, remember that this year, you’re in charge. Shop around and hold potential banks, credit unions and online companies accountable for what you want out of refinancing. If they’re unable to meet your needs, move on to a competitor.

6. Gain financial independence

Student loan refinancing is more accessible in 2019 than it has been at any point previously.

In mid-2018, for instance, CommonBond announced it would accept refinancing candidates who are visa holders who have graduated from a U.S. university. Citizens Bank has been refinancing debt for college dropouts. Plus, more and more lenders are removing employment and minimum income from their eligibility requirements.

If you’ve found refinancing to be out of your reach, you might now be in luck. As a creditworthy applicant, you could thank the cosigner on your original loans by removing their name from your refinance application.

If not — maybe your credit score still needs work — take the first months of 2019 to strengthen your application. A cosigner could help you do just that. Plus, through refinancing, you could release that cosigner within a relatively short period. Splash Financial and LendKey are among lenders that offer cosigner release after just one year of prompt payments.

That would give you greater financial independence by 2020 — and put you on a path to becoming debt-free on your own.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Andrew Pentis
Andrew Pentis |

Andrew Pentis is a writer at MagnifyMoney. You can email Andrew here

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College Students and Recent Grads, Pay Down My Debt

Student Loan Forgiveness Programs for Doctors

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

As a medical professional, you might have taken on a mountain of debt on your journey to becoming a doctor. The average indebted doctor left medical school in 2016 owing more than $189,000 in student loans, according to the Association of American Medical Colleges.

Even if you’re on your way to a six-figure income, your residency income will likely be far less — in 2017, residents earned an average of just over $57,000. During that time, the interest alone on all your student loans could be equal to your entire disposable income after room and board.

Fortunately, there are student loan forgiveness programs for doctors and other medical professionals that could pay off part or even all of your loans. If you’re looking to cure yourself of medical school debt, turn to these programs for assistance.

National Health Service Corps (NHSC)

The National Health Service Corps can provide up to $50,000 to repay your health profession student loan in exchange for a two-year commitment to work at an NHSC site in a high-need, underserved area. After completing your initial service commitment, you can apply to extend your service and receive additional loan repayment assistance.

In order to qualify, you’ll need to work at least half-time in a designated Health Professional Shortage Area (HPSA). Along with earning loan forgiveness, you could put your medical degree to good use by caring for an underserved community.

Indian Health Services Loan Repayment Program

This federal program offers up to $40,000 in exchange for two years of service in an American Indian or Alaskan Native community. You can also renew your contract and receive additional benefits that could pay off your entire student loan balance.

National Institutes of Health (NIH) Loan Repayment Program

If you work in medical research, you could qualify for $35,000 per year from the NIH Loan Repayment Program. To do so, you’ll need to conduct research at a non-profit organization in an eligible field, such as health disparities, contraception and infertility or pediatric medicine.

Students to Service Program

If you’re still in medical school, you can apply for a major award through the Students to Service Program. This program provides up to $120,000 to medical students who commit to providing primary health care at an approved site for three years after graduating.

Public Service Loan Forgiveness Program (PSLF)

The PSLF program is intended to encourage individuals to enter and continue to work full-time in public service jobs. You could receive forgiveness of the remaining balance of your federal direct loans after making 120 qualifying payments while employed by certain public service employers.

Since you’ll likely have to work for 10 years before you get loan forgiveness, you’ll have to move your student loans off the standard 10-year plan and onto an income-driven repayment or extended repayment plan — otherwise you’ll have already paid off your balance by the time you qualify for forgiveness.

You should also keep up to date with any developments around the PSLF program. While it was signed into law in 2007, the program is not guaranteed to be around forever, and it’s recently drawn controversy over the uncertainty around getting approved.

Military loan repayment programs

If you’re serving as a medical provider in the Army, Navy or Air Force, you could qualify for assistance toward your student loans. Here are some of the programs available for military personnel.

Financial Assistance Program (FAP)

The Army, Air Force and Navy all offer the FAP, a program that grants loan repayment assistance and a living stipend to medical residents.

If you’re a medical resident in the Army or Air Force, you could get at least $45,000 per year of service, plus a monthly stipend of at least $2,000. And although the Navy grant can change from year to year, Navy medical residents could also qualify for significant assistance from the Navy FAP.

Active Duty Health Professions Loan Repayment Program

This program offers up to $40,000 per year in student loan repayment over a set number of years. You must be a physician in the Army, Navy, or Air Force to qualify.

U.S. Navy Health Professions Loan Repayment Program (HPLRP)

The Health Professions Loan Repayment Program (HPLRP) provides medical personnel in the Navy with aid for their education loans. If you meet the program’s criteria, you could receive repayment assistance of up to $40,000 per year, minus about 25% in federal taxes.

State Loan Repayment Assistance Programs (LRAPs)

Many states also run programs that grant student loan repayment assistance in exchange for working in a high-need or underserved area. A good place to check the medical loan repayment and forgiveness programs available in your area is through the AAMC database.

Here are just two examples of the many state-specific programs:

  • The Arizona Loan Repayment Program offers up to $65,000 in exchange for a two-year commitment from physicians.
  • The Kansas State Loan Repayment Program offers up to $25,000 per year of contract toward your outstanding education debt. After completion of the initial two-year service obligation, you may be able to extend your contract in one-year increments.

Check with your state to find out if it has an LRAP for doctors, nurses or other medical professionals. Depending on where you live and work, you could qualify for significant assistance toward your student loans.

Do the math before committing to a loan forgiveness program

As you take a look at each loan forgiveness program, remember to weigh salary considerations against any amount you’d receive in student loan assistance. Opting for a job with a $75,000 salary to earn $25,000 in loan forgiveness wouldn’t be as lucrative as going after a job with a $200,000 salary and no loan forgiveness, for instance.

Unless you’re driven to work in a high-need area or with an underserved population, you might not benefit from sacrificing a high salary for the sake of qualifying for loan forgiveness. Consider your career goals and your wants and needs in a job.

Refinancing student loans can also help

Whether or not you’re working toward student loan forgiveness, you might also consider refinancing as a strategy for managing your debt. Through refinancing, you could reduce your interest rates and save money on your loans beyond whatever forgiveness you can get from these programs.

Because of their steady incomes, doctors tend to be especially strong candidates for student loan refinancing. Along with lowering your rate, you could choose new terms and adjust your monthly payments.

But refinancing with a private lender also means you’ll lose access to federal programs and repayment plans, so make sure you’re comfortable with this sacrifice before making any changes to your debt. If you decide refinancing is right for you — or simply want to learn more about the process — check out the best lenders to refinance student loans here.

Rebecca Safier contributed to this article.

Our Top Picks for Refinancing Student Loans

You can learn more about what these lenders have to offer by checking out the best options to refinance student loans here.

LenderTransparency ScoreMax TermFixed APRVariable APRMax Loan Amount 
SoFiA+

20


Years

3.90% - 7.95%


Fixed Rate*

2.47% - 7.17%


Variable Rate*

No Max


Undergrad/Grad
Max Loan
Learn more Secured

on SoFi’s secure website

EarnestA+

20


Years

3.89% - 7.89%


Fixed Rate

2.57% - 6.97%


Variable Rate

No Max


Undergrad/Grad
Max Loan
Learn more Secured

on Earnest’s secure website

CommonBondA+

20


Years

3.67% - 7.25%


Fixed Rate

2.61% - 7.35%


Variable Rate

No Max


Undergrad/Grad
Max Loan
Learn more Secured

on CommonBond’s secure website

LendKeyA+

20


Years

5.23% - 8.97%


Fixed Rate

2.68% - 8.77%


Variable Rate

$125k / $175k


Undergrad/Grad
Max Loan
Learn more Secured

on LendKey’s secure website

Laurel Road BankA+

20


Years

3.50% - 7.02%


Fixed Rate

3.24% - 6.66%


Variable Rate

No Max


Undergrad/Grad
Max Loan
Learn more Secured

on Laurel Road Bank’s secure website

Citizens BankA+

20


Years

3.90% - 9.99%


Fixed Rate

3.01% - 9.75%


Variable Rate

$90k / $350k


Undergraduate /
Graduate
Learn more Secured

on Citizens Bank (RI)’s secure website

Discover Student LoansA+

20


Years

5.74% - 8.49%


Fixed Rate

4.99% - 7.99%


Variable Rate

$150k


Undergraduate /
Graduate
Learn more Secured

on Discover Bank’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Steven D. |

Steven D. is a writer at MagnifyMoney. You can email Steven at steven@magnifymoney.com

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