The Power of Your Dollar

The Power of Your Dollar

Recapturing YOUR Time & YOUR Interest

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Putting Yourself at the Center of Your Repayment Strategy

What does it mean to put yourself at the center of your college loan & debt repayment strategy? Traditional mindsets regarding your debt repayment strategies puts your lenders first. To put it simply, your dollars are working for them before they are working for you.

When you make a payment on a debt, either your minimum payment or any additional payments on a monthly basis, you’ve lost any further opportunity to benefit from that dollar.

Traditional strategies tell you to cut back on your lifestyle and save up cash to spend in bulk to avoid debt. Or, they tell you to take out loans to build your credit and make large payments on those loans to avoid interest accrual. Both strategies work if we assume that life doesn’t happen and that anything unexpected or un-planned doesn’t derail your influx of cash flow.

Traditional Thinking...

Upon graduation, there are generally 3 parts that alumni focus on financially: Debt Repayment, Savings, & Emergency Fund. You are in charge of selecting the debt repayment plan that best fits your current situation (but if you push it off close to or at the end of your 6-month grace period after graduation, you will be automatically enrolled in the 10 Year plan). Each plan has specific caveats that, depending on what your current situation is and what your priorities & goals are, have different short-term & long-term effects.

Most graduates know to fund their savings, but fewer realize that their savings and an emergency fund are two separate accounts with two different purposes.

Building Your Foundation - with your goals at the center.

Building your savings should focus on future/goal expenses such as buying a car, taking a vacation, or purchasing that expensive saxophone you’ve been eyeing since the 8th grade. Whereas, the financial planning industry standard for an emergency fund is that you have 6 months’ worth of basic living expenses on hand.

Eliminating your debt following traditional thinking is what led us to approximately $1.6 trillion in college debt as a country (21 years on average to pay off a bachelor’s degree), 30% of graduates moving back home, and an average total savings of approximately $8,500 for singles under 34.

Without your dollars working for you, being able to accomplish multiple jobs at the same time, the disruption of your cash flow can set you back further than anticipated when life happens.

So, how can you make your dollars work as hard as you are? You put them in a triple threat position.

The Triple Threat Position

For the non-basketball fans out there, when the basketball is passed to you, your body needs to be in the physical position to accomplish three things:

  1. Pass the ball
  2. Shoot the ball
  3. Drive (or dribble) to the basket

That is being able to accomplish all three of your offensive objectives at once, a triple threat. When your dollars are positioned offensively, you’ll be able to efficiently accomplish your 3 points of financial growth at the same time:

  1. Repay Your Debts Faster & Minimize Interest Paid
  2. Build your Savings
  3. Build and Keep an Emergency Fund
Triple Threat - In Action

How can you put yourself in a position to accomplish your goals when it comes to your dollar? The concept of a Supercharged Savings Strategy. You rely on your own personal economy, with your goals and priorities front and center. This tool is fundamental in eliminating your debt faster and more efficiently while building your savings and emergency fund. There are high interest-bearing savings tools that out-perform your non-interest or low-interest savings account, without any market risk.

Some seek market returns, but the unpredictability of the stock market makes investment options a non-viable option for stable, guaranteed growth. Understanding the differentiation between stable growth and the risk/reward system in the market is vital to launching your life.

Safe Growth vs. Market Based

Author of The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb, broke discretionary investing down to a simple guideline. Of your discretionary monies (cash distribution outside of necessary living expenses: i.e. rent/mortgage, food, water, electricity, lifestyle, etc.), 80% should be dedicated to a stable growth environment with little to no volatility, which allows the remaining 20% to be the “designated hitter”, aiming purely for big returns. Balancing your growth vehicles in this fashion provides breathing room and stability moving forward.

Using a Supercharged Savings Strategy gives you the freedom and the power to know what’s ahead and be prepared for when ‘life happens’. Flexibility to work with your current situation but grow alongside you as future life events happen (Buying a New Car, Buying a Home, Getting Married, Moving Out of Town, Changing Jobs/Careers, Annual Vacations, etc.). It also gives you ample opportunity to develop in the market following the 80/20 rule.

Make sure your dollars are working just as hard as you are and put yourself at the center of your college loan & debt repayment strategy.

Certified College Debt Specialists at Responsible College Advocates have the tools, knowledge, and technology to keep you on track, your goals at the forefront, and your dollars working for you and not your lenders.

Responsible College Advocates is a Free Community Resource. We believe that since you had to pay for your education, you do not have to pay for the solution to further your after-college goals. We may not be able to give you free college or forgive the college debt you have already accrued, but we can give you your personalized free solution.

The #1 Way to Reduce College Debt

The #1 Way

to Reduce College Debt

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With college debt being such a hot topic these days, I thought I would shed some light on the best solution to help control the epidemic.  We constantly see Free College and College Debt Forgiveness being the political solution, few believe it will happen, which is why we need a real answer. 

I have been working in the college world for over a decade and have helped families save millions of dollars off the cost of college.  I really believe the best way to reduce college debt is by having a plan on the front end to reduce the cost before you enter college.  If we spend a few minutes and think about this logically, when the cost is reduced on the front end, before your child even enters first semester of their freshman year, you owe less when they graduate.  This can be accomplished organically, with a clear understanding of how the college game is played, who the players are and what opportunities each family has.  I am not a big proponent of families spending thousands of dollars to get a plan to teach you how to “game” the system.  I have helped families from low income to over $400,000 of AGI reduce their cost of college without spending a dime for the information.  If you have a few thousand to spend on a plan, you are probably better off using it to pay for college.  About 10-15% of the families need to spend a few bucks to have someone help them get into college, and the right one. 

Making Sure Everyone is on the Same Page

In my experience, if a family is on the same page during the junior and senior year of high school then the student will choose a better “fit” for the college they attend, which has many benefits.  First, if a student is getting into a college or university that wants them, you can expect more financial benefit and better awards, maybe an additional $20,000 over four years.  That can come in the form of merit money or scholarships.  Another benefit the student has is a higher chance of getting out in four years, not five or six.  That is another $40,000- $60,000 savings.  Finally, when everyone knows the boundaries that are in place they can work towards a common goal.  It should be getting the student into a career that is viable and will pay for the student loans they must take to complete the process.  Mom and dad are not expected to pay for the whole education, at least not the families I speak with.  When the student has some skin in the game, they feel like they own it and will work harder. 

There Are NEW Resources

There are many other resources that were not available when I went to college that will help reduce the cost for families today, even how they get scholarships is different.  They now have micro-scholarships which are a game changer.  Most high schools can help guide that ship, but we always make sure mom and dad are following up to acquire those dollars that are floating out there waiting to get grabbed and used.

Certified & Credentialed

Certified College Debt Specialists at Responsible College Advocates have the tools, knowledge, and technology to keep you on track, your goals at the forefront, and your dollars working for you and not your lenders.

Responsible College Advocates is a Free Community Resource. We believe that since you had to pay for your education, you do not have to pay for the solution to further your after-college goals. We may not be able to give you free college or forgive the college debt you have already accrued, but we can give you your personalized free solution.

Virtual Learning for Parents & Students

Virtual Learning

for Parents & Students

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Mom and Dad, Virtual Learning is not just for the Student!

In light of all of the current changes we are facing as a country, virtual learning is taking main stage.  Your children are getting more acclimated to learning online and using web-based tools to help get their education up to speed. Schools are getting more and more classes and information online to make learning available to everyone, and we are seeing that technology helps keep families growing their knowledge in non-traditional ways.  You might even see it happening at work, being allowed to work from home and do virtual webinars and meetings.  Progress still has to happen considering challenges.

We know that your student is learning online and that the education system is adapting to this way of teaching.  It allows for students to be more efficient and forces the system to get organized in a different way.

Similarities in the Chaos

What has not changed is the desire to do something after high school- college is still the next step for most students and an admirable goal for most families.  How are mom and dad gathering the data and putting the plan in place to make sure that they can afford the next step. One thing has not changed, the cost of education has not dropped with the online environment.  You might be able to do more from home, but the cost of the education will still be the largest obstacle for most families.

Times Have Changed

We have been seeing more and more parents want to have home study classes and resources that meet their needs for seeing how to pay for this next step.  The worry is not transferred to web-based platform, it stays with you.  The impact on your retirement and future is not transferred away or changing either.  We need to make sure that as we are shifting our style in this country that we do not set ourselves up for additional unintended consequences.   When they invented the 529, we thought we could save our way to pay for college, but that has led to a $1.6 trillion parent and student loan epidemic.  There are more people receiving social security still paying on student loans today than ever before.  That wasn’t even a thought in the 80-90’s when the advisors were promoting these college solutions. 

There are Resources Available

As we make this transition to more web based and online learning, let’s not leave mom and dad behind.  Here are some great resources to help make sure that as your child is getting ready for college, your budget and personal economy are up to speed as well.

I hope that you find some great resources and help other parents reduce their cost of college and take control in this trying times.