Getting That Pig Skin To Pay Off
Congratulations and condolences to you, if you’re one of the 2009 college graduates to be entering the job market this year. You got the pig skin, that valuable diploma that tells everyone you’re worth something in today’s job market. How to capitalize on that in one of the worst job markets and make the most of your situation is the question facing many of today’s graduates. Unfortunately, they are competing with a glut of highly qualified, professional, people who recently lost their jobs and have years of experience under their belts.
Take Stock of Your Finances
The gut instinct might be to throw up your hands and quickly move back in with your parents. However, that may not be necessary. At some point in your adult life, you have to learn to budget and this recession can be the gift that gets you started. First, estimate your living expenses and the minimum you need to support yourself. Include rent, food, utilities, gas, car, and insurance. Find out exactly how much money you need to take in just to survive. Now, add the amount you are scheduled to repay once your student loan repayment kicks in. These are your basic expenses and getting a job that satisfy that with a safety cushion for discretionary and emergency expenses while it is in your chosen field, is a stepping stone to getting a better job later too. You don’t want to be too picky.
Negotiate Your Expenses
Student loans can be negotiated with the government and there is new legislation that allows you to lower the monthly payments based on your discretionary income. Ask your lender about the income-based repayment plan and whether you qualify. It is open to students who have federal Stafford Loans, Graduate Plus loans, and consolidated federal loans. The limit for repayment is only 15% of what you make above $10,830 if you are single. The criteria is based on the national poverty line and your income.
If you have credit card debt, you will also want to negotiate that debt with your lender. Due to the recession, many creditors are willing to negotiate a new payment plan, a lower interest rate, but it may come with the requirement to close the account. If you’re really squeezed and have other income, you can always close it, pay it off slowly, and then re-open a different line of credit when you get your job. If you can negotiate a way to pay it off without closing the account, it is better for your credit score.
Look For Ways To Create Income
A job isn’t the only way to bring in income. Many of today’s graduates are going straight into business. It’s not a bad decision as this is one time in your life when your personal responsibilities are low and your potential is high. Even if you do become employed, having a side business can help to create confidence and opportunities to create income that doesn’t rely on an employer. If you’re smart enough to get a college degree, odds are you’re smart enough to run a business.
This entry was posted on Tuesday, October 6th, 2009 at 10:42 am and is filed under Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
