3 Car Buying Tips For Recent College Graduates

By Brian Wilkins

A report by The Institute for College Access & Success (TICAS) found that nearly 70 percent of 2013 college graduates had student loan debt averaging $28,400, up 2 percent from the 2012 average. Student loan payments are just one of the realities for college graduates entering the real world and trying to figure out the whole budgeting-your-life thing. Leader in the business of all-things personal finance, Intuit shares that transportation should account for no more than 10 percent of your net income, which might not seem like much (especially if you’re just out of college and making a not-so impressive salary), but you can still have a nice and reliable car if you exercise due diligence in the decision-making process.

The following tips will help guide you.

college students and cars

Buy vs. Lease

We all know car commercials; the best ones are those that advertise brand new sports cars with reasonable monthly payments you can actually afford. But after reading (or hearing) the fine print, you learn that the low payments are to lease the vehicle, not buy it. Well then, should you just lease?

Monthly payments are typically lower when leasing and the advantages don’t stop there if you’re the type of person who likes the idea of a new car every three years. This sounds great, especially since new vehicles depreciate in value as soon as you leave the lot (by 9 percent according to Edmunds). Then after one year of owning the vehicle, its market value drops to 81 percent. Thus buying a new car is a bad investment on the surface, right? Well, not in the long-run.

Owning a vehicle means no monthly payments and lower insurance premiums if you decide to switch from full coverage to liability. Modern cars, particularly Honda and Toyota models, are known to last well into the 250k mile range and even higher with proper maintenance. Leased vehicles also have mileage limits and, upon the end of the lease, you are responsible for any damage deemed excessive to normal wear-and-tear by the dealer.

New vs. Used

The 2015 Auto Financing Report by personal finance social network WalletHub found that interest rates on both new and used cars are lower than they’ve been in several years. But not all loans and interest rates are created equal.

New cars provide peace of mind: you are the only owner, so no secrets as to where it’s been and, should something happen, you have a warranty to cover most major mechanical issues. Auto loans underwritten by the manufacturers had interest rates 35 percent below the average and financing via credit unions had rates 25 percent below the average. National and regional banks offered rates at or well-above average in most cases.

Used cars are, of course, less expensive and have already endured the bulk of value depreciation, which happens in the first few years on the road. Financing a used car is also much easier in most cases and much like student loans have income-based repayment plans, there are financing companies like DriveTime that offer customizable payment plans for all budgets. Used cars typically have lower insurance premiums and you may even be able to negotiate a used car warranty if you know your options.

If possible, purchase a certified preowned car that has been thoroughly inspected by the manufacturer. Some used cars companies offer third-party extended warranties, but make certain you thoroughly understand the terms before paying extra for it.

Credit Fixes

A subprime auto loan, those underwritten for customers with FICO scores of 650 or lower, is something to avoid altogether. To put it in perspective, a $20,000 four-year auto loan with a 3 percent prime rate will cost you only $1,248 in total interest. That same loan at an 18 percent (subprime) rate will cost you $8,200 in interest .

Obtain a copy of your credit reports from the three major bureaus. Your payment history and amounts owed on open accounts make up 65 percent of the aggregate FICO score. Pay down credit cards that are at or near the limit to quickly improve your score. It’s best to pay down/off the oldest accounts first, as length of credit is also factored into your score. A minimum credit score of 700 should be the goal before considering an auto loan at all.

The test drives and haggling with salesmen are the fun parts of buying or leasing a vehicle. Just heed all the aforementioned to get the best deal and make the right decision for what you need and what you can afford.

Brian Wilkins is an Arizona State University journalism grad who has worked as a radio broadcaster and banking industry professional. He is an independent journalist, blogger and small business owner who loves life. He lives off-the-grid and has not owned a TV in more than six years


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Valentine’s Day for Students: When to Splurge & When to Save

By Alison Stanton

Valentine’s Day is the most expensive holiday after Christmas, the National Retail Federation reports. Love birds across the country will spend a collective—are you ready?—$18.6 billion on gifts for their special someones. That averages out to about $130 per person.

For high school and college students on a tight budget, spending $130 on their sweetie is simply not possible. Although there are no hard-and-fast rules to how much you should spend, the following tips can help you decide when you should splurge and when you should cut back.

college couple

Take an Honest Look at Your Relationship

So how’s it going? If you two argue more than you get along or are spending less time together, this might not be the time to present some huge and spendy gift. Have an honest talk with your boyfriend or girlfriend and discuss how you’ll celebrate it, if at all. Maybe in the interest of saving money, you’ll just treat it like a regular day. You could also decide to exchange nice cards and maybe a small fun gift like his favorite candy bar or her favorite blended coffee drink.

Think About How Long You’ve Been Together

If you’ve been dating for a few short weeks, treat Valentine’s Day a bit more casually than if you have been going out for a few years. Again, an open and honest approach is the way to go with someone you haven’t known that long—simply say you aren’t sure how to deal with a day that expects you both to act like crazed lovey-doveys.

On the other hand, if you have been together a while and are in love, it’s appropriate to spend a bit more on Valentine’s Day. You don’t need to take out a loan or rack up a huge credit card bill, however. Ask some of your closest friends who are in similar relationships what they expect to spend and see if it correlates with your budget and gift ideas. If your girlfriend of two years has been dropping hints about how much she would love to receive flowers at work, you could certainly splurge a little on that. For example, FTD sells a variety of beautiful Valentine’s Day arrangements that are in the $40-$50 range. Other gift suggestions for couples who are in solid and loving relationships include dinner out at a favorite restaurant and then watching a movie together all snuggled up on the couch, a nice wallet or purse that your sweetie has had his or her eye on, or a pair of designer sunglasses.

Decide Where and When to Celebrate

Between classes, jobs and other responsibilities, it might be challenging to celebrate Valentine’s Day on Feb. 14. If you do decide to celebrate with your sweetie, figure out ahead of time when and where you’ll get together. Above all, try not to feel like you have to spend a certain amount just to get through the day—just be honest with yourself, your sweetheart and your wallet, and the day will go a lot smoother.

Alison Stanton has been a freelance writer for the past 14 years. Based in the Phoenix, Arizona area, Alison enjoys writing about a wide variety of topics, but especially loves meeting interesting people and telling their stories. 

Top Ways Being a Student Can Save You Money

By Roxy Barnes

It’s been said before and it’s true. College will leave you with a lifetime of memories. But if you’re not careful it will leave you with nearly a lifetime of debt. That is why students should take advantage of the discounts available simply for being students.

And they are everywhere. Many of these discounts are often listed on your school’s site. But don’t limit your search to just that. By putting your Internet skills to work, you can find discounts on nearly everything you’ll need, and some you wouldn’t expect, like this student carpet cleaning discount.

But that’s not all.  Let’s start with a big way to save money in school – scholarships.

Saving-MoneyScholarships

Paying for college is the top concern for the vast majority of college students. Many students may not realize this, but universities often have long lists of private scholarships from businesses and organizations listed somewhere on the financial aid section of their website.

Private scholarships come from every corner of the marketplace and often vary widely in their requirements for entering the scholarship contest. For example, this Halloween costume site offers a cash scholarship for designing a Facebook Cover image for their home page. If you’re more expressive in words, many businesses only require a 500 word essay (or less).

Most of these scholarships aren’t particular about what school you attend. So if your school doesn’t offer very many outside scholarships, check out the pages of some larger universities.

Books and Supplies

Way back in the day students had to buy all of their books from the university bookstore. You paid whatever price they charged and sold them back to the same store when you were done for next to nothing. Talk about buying from the company store – ouch! (Sometimes the good ole days were not so good.)

Now you have choices aplenty for buying your books and supplies. Online sites like Bookbyte.com open up the marketplace so you can shop around for the best deal. Don’t forget to check if your book is available as an eTextbook and save even more.

You probably already realize the savings you can get on software purchases with a student discount, but do some searching for student discounts on computers, tablets and other electronic devices.

Everything else

If there is a product or service that a student can use, you can bet some company is offering a discount on it. Businesses aren’t just doing this out of the goodness of their hearts, they are hoping to win your loyalty now and keep using them for years to come. So even if you don’t see a student discount advertised, don’t hesitate to ask if they have one. What’s the worst they can say?

Even storage companies are getting in on the game, offering student discounts on storage units over summer break. The list goes on, including companies like AmTrak, hotels, clothing stores, even credit cards offering discounted student rates.

If you think searching for student discounts on everything could turn into a time consuming obsession, there are a number of sites that are doing the searching for you. One of the more popular sites is Student Universe. They not only help you find deals on travel and lodging, but have categories of discounts ranging from clothing to food and health.

College is expensive. If you can use your student status to save a few dollars here and there, over the course of a college career the savings adds up. Don’t let that money go to waste. That way, when you look back on your college years, hopefully all you’ll have are great memories, not ones tempered by the specter of debt.


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How to Make a Fashion Statement on a College Budget

By Alison Stanton

As a college student, you probably feel like you figuratively wear many different hats on any given day. There’s your “in class” hat, your “trying to impress the professor during my oral presentation” hat, the “hanging out in the dorms” hat, and, the ever-popular “heading to my first-ever real job interview” hat.

The trick is to create a stylish wardrobe versatile enough that you’re ready for all of these different situations, without spending a zillion dollars or needing a closet that rivals Ivana Trump’s. Fortunately, it’s more than possible to assemble a fashionable fall wardrobe that won’t require you to take out a massive loan. Here’s where to start.

fashionable girl Continue reading

Should You Choose a Vocational School Over College? 4 Things to Consider

By Ray Holder

The popularity of vocational schools is on the rise. In the past, once you were done with high school, you had two options.

1 – Get into college
2 – Get a job

In most cases the ones who went to college were the lucky ones who could afford to do so either by means of scholarships or their own financial reserves. The few who weren’t so fortunate were forced to get minimum wage jobs as a way of earning a small income. Today, things are much different.

Over the past decade there has been a significant rise in vocational training institutes. People are slowly realizing that they have a lot to offer. In fact, students are now leaning more towards vocational schools than colleges even though they seem to have the money to be able to pay for a college education. And here’s why:

Time to be Safe

1. Vocational schools save time

If you decide to take the traditional route and get a college degree, you would have to spend 4 years on learning the basics of your area of interest. After 4 years, you are free to study further if you wish to specialize. Depending on what you choose to study, you will end up spending 6 odd years on just getting educated.

On the other hand, should you choose to go with a vocational school you would have quite the opposite experience. Vocational courses last for anywhere between 4 and 18 months, depending on what you wish to study. By the end of the course you are more than ready to land a job. There is never any need for further specialization because vocational courses by design are specialized courses.

2. Vocational schools save money

Since vocational schools don’t go on and on for 4 years they don’t cost as much as college. On an average a vocational course from an accredited vocational training institute would probably cost between $14,000 and $20,000. Don’t be daunted by this figure. This is an estimate of total educational costs taking into account all additional costs. Besides, if you enroll in an online vocational school, you will not have to worry about additional costs like cost of living and accommodation.

College tuitions are through the roof nowadays. In addition to tuition you have to consider living costs and accommodation as well. So all in all, it is cheaper and a lot more convenient to attend a vocational school.

Saving-Money

3. Get hands-on experience and be job-ready

Vocational courses are highly specialized courses. They are designed to do one thing and one thing only—prepare you for your vocation. There are no additional irrelevant classes that you are mandated to take. The entire duration of a vocational course is spent in training and preparing students to ensure that they are job ready by the time the course is complete.

You are given a whole lot of training along with practice time and plenty of opportunities for hands-on experience. You needn’t worry about gaining experience in order to land a decent paying job. Vocational courses will give you all the experience you need.
GetHired

4. Land a job easily

Because vocational courses are so specialized and produce highly skilled and well trained individuals, there is a high demand for vocational school graduates in the job market. Also, a lot of vocational schools have placement programs that set their students up with interviews which always result in employment. Some schools also have ties with companies so a certain percentage of students are hired by those companies after every course. Porter and Chester Institute, a vocational training school that is accredited by the Accrediting Commission of Career Schools and Colleges (ACCSC) is one such institute that has a placement program for all students who are interested.

With college, there is never a guarantee that you will land a well paying job or any job at all for that matter. Students struggle to gain experience and this puts them at a disadvantage when it comes to finding employment.

So there you have it, the 4 reasons why you should pick a vocational school over a college education. If you are interested in saving time and money and landing a job in as little as 18 months, you know just what to do!

Resources:

http://lifehacker.com/trade-school-might-be-a-better-choice-than-college-her-1484086007

http://www.porterchester.com/

http://www.educationcompass.com/advice-central/top-5-reasons-to-choose-a-vocational-education/

http://www.school-directory.net/career-options/trade-school-vs-traditional-college.html

 

5 Budgeting Tips For High School Seniors Getting Ready For College (Guest Post)

Dave Landry Jr. is a financial consultant and economist dedicated to blogging and the creation of infographics in his down time. He has two young daughters who will be graduating from high school before he knows it, and will be sharing these budgeting tips with them as well. He hopes you find these tips useful for your own pre-college budgeting, or if you’re a parent, will give some of this advice to your children.

Congratulations, you’ve made it through high school! As you get ready for the next big step, it’s important to learn real world skills that will help you transition not only from high school to college life, but also from college life to the world beyond.

Budgeting skills are important in everyday life; learning how to manage your money before you’re on your own in college will keep you from overspending and finding yourself deep in debt. Below are some budgeting tips that will help you get started on to that path to financial security.

1. Learn to track your spending. The first step to creating a budget is to document everything you spend money on or buy. Whether you stick with an old-fashioned notebook and handwritten lists or choose to download spending tracker apps for your smartphone, track everything you spend for at least a month. It doesn’t matter if it’s as small as a pack of gum or a soda from the vending machine at school. While not strictly necessary, it would be good to include notes on your spending behavior, like how you paid for it, where you bought it, and why you bought it.

After a month’s documentation, you’ll have a better sense of where your money is going. If you use apps or a spreadsheet, you can quickly see how much you’ve spent on entertainment, car expenses, clothing, food, and school-related purchases. This will form the base categories of your budget.

2. Learn to develop a budget. Once you’ve established where you spend most of your money, start to set up a budget. The budget will consist of the major categories established during your spending, and will include a space for savings, emergencies, and income.

Ideally, you’ll create this budget on a spreadsheet, or using one of the free online budgeting tools or apps. Once you graduate from high school and enter college or the workforce, your budget categories will change and shift; using a malleable system allows you to customize and adjust as needed.

Establish spending maximums so that your spending doesn’t exceed your income.

3. Pay yourself (start saving). One of the important categories in your budget should be a savings account. Even though interest rates on savings accounts are low right now, putting money in the account is more about the practice and the act of creating an emergency fund, than it is about making your money work for you (even though it is a good idea to start thinking about investments and interest rates).

Whether you’re saving for a rainy day, or towards a particular big purchase like a post-graduation trip or a new car or college, getting into the habit of “paying yourself” and including it on your budget will serve you well in your adult life, when you won’t necessarily have alternative sources of financial assistance.

Learn to prioritize within your budget by putting money in your savings account before you spend any of your income or allowance on entertainment.

4. Figure out financial aid, student loans, and other means of paying for college. Most families will need to rely on financial aid and student loans to pay for school. As you, the student, will need to start paying back the loan as soon as you graduate (up to a six month grace period, or possible deferment if you are going to graduate school), it’s important that you learn as much about your options before taking out the loan. Don’t borrow any more than absolutely necessary for tuition, room and board, and other essentials.

5. Get a summer job. Now that you have a sense of your expenditures, and can project how much you need in order to fulfill all your bills and other costs, you need to start bringing in income. If you’re not already working a part-time job of some sort, consider getting one in the summer between high school and college. Previous work experience can help you get a coveted college job, which will help with bills that the student loan doesn’t cover.

Keeping to a budget isn’t as boring or challenging as it may seem. These are necessary skills that can translate into an opportunity to study abroad, buy that dream car, or have money on hand for an emergency, which greatly reduces stress in the long run. Learning to manage your money is a skill you’ll use for the rest of your life. You can also consider obtaining your education online through affordable programs that offer equivalents of in-classroom learning and degrees. Online degree programs also allow students to pursue their education at their own convenience, allowing them to work full-time to support themselves or a family if need be.


Now that you’ve got your budget under control, it’s time to focus on your grades.  Order your copy of The Secrets of Top Students today!