Financial Friday Archive
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Financial Friday Archive
::Spending::
Holidays, Vacations and Other Life Events
::Saving / Investing::
Q. I just moved to Oklahoma and honestly, the thought of severe weather freaks me out. Is there any way to prepare my family?
Retirement
Q. I completed my college education last year and have since gotten an entry-level position with a great company. With the repayment of my student loans and everyday living expenses, I find myself with limited discretionary income. Is it truly necessary to start saving for retirement at this early stage of my career?
Lifestyle
::Budgeting::
::Credit::
Credit Cards
Q. My husband and I want to get our daughter a debit card of her own so we can start teaching her about money management. There are so many options that we’re a little overwhelmed. How do I pick the best one?
::Debt Management::
::Consumer Issues::
Q. In a meeting last week, my boss reminded us that open enrollment is around the corner. What does that mean, and what steps do I need to take to ensure that I don't miss anything important?
::Taxes::
Spending
Holidays, Vacations and Other Life Events
Last month I got a little carried away in the spirit of the holiday season. I spent way too much, and got myself into debt. How do I fix it and make sure I don't repeat this? (posted January 5, 2024)
The festive season has come and gone, and you might be left with more than just memories — perhaps a lingering holiday debt hangover. If overspending has left you in financial distress, don't fear; there are steps you can take to fix the situation and ensure it doesn't happen again.
Step 1: Face the Numbers. Start by understanding the extent of your debt. Take a close look at what you owe and the associated interest rates. Quick repayment is key to minimizing interest charges. Be cautious of debt consolidation offers, as they often come with fees and high interest rates.
Step 2: Budget and Prioritize Payments. Debt won't disappear. Incorporate monthly debt payments into your spending plan. Aim to pay more than the amount of interest accrued each month to make meaningful progress. If handling multiple debts, consider the debt snowball method. Identify a fixed amount to contribute to debt reduction monthly, directing this extra amount towards the smallest debt. Once cleared, add the freed-up amount to the next smallest debt. Utilize tools like the budget calculator at OklahomaMoneyMatters.org for a realistic spending plan.
Step 3: Reflect and Learn. To prevent future financial pitfalls, reflect on your spending habits. Borrowing to navigate the holidays may offer short-term convenience, but can lead to long-term debt. Learn your limits and plan. Consider strategies for the next holiday season:
- Purchase gifts or save money throughout the year to avoid sudden financial strain.
- Leverage your talents to craft meaningful gifts in advance.
- Re-evaluate your gift-giving approach; sending thoughtful cards may be a more budget-friendly alternative.
Learn from past mistakes, enter the new year wiser, and proactively prepare for the coming holiday season. By adopting these strategies, you can overcome holiday debt and build a more secure financial future.
Every year, I end up spending more than I planned for the holidays and then I struggle financially for the first few months of the new year. How can I stop overspending? (posted November 2, 2023)
As the holiday season approaches, many of us eagerly compile our gift lists and prepare to shop for our loved ones. However, the excitement of giving should be balanced with the responsibility of managing our finances effectively. Overspending this time of year is a common pitfall, but there are strategies to ensure that you stay within your budget and enjoy a financially stress-free holiday season. Here are some valuable tips to help you keep your spending in check.
- Make a list and check it twice: Start by listing all the individuals you intend to buy gifts for during the holidays. Next to each name establish a specific budget, determining the maximum amount you’re willing to spend on them. Afterward, brainstorm gift ideas that align with the set budget limits. Having a well-organized list will guide your shopping decisions and prevent impulsive spending.
- Leave the cards at home: Instead of relying on credit cards, opt for cash. Paying with cash provides a tangible reminder of your available funds and makes it more challenging to overspend. Consider implementing the envelope system: label envelopes with the names of each recipient and allocate the predetermined amount of cash for their gifts in these envelopes. Once the cash is exhausted, your shopping for that individual is complete. If carrying cash is a concern, explore the option of using pre-paid Visa gift cards, which can help you stay on track without handling large sums of cash.
- Leverage Technology: Take advantage of smartphone applications that can assist you in managing your holiday shopping budget. For instance, if you have a smartphone consider downloading apps such as Christmas Gift List which has apps for Apple and Android. It allows you to monitor your purchases, keep track of what's left on your shopping list, and calculate the remaining budget for each person. It even generates a convenient shopping list to streamline your shopping visits and save time.
- Avoid the Even Gift Trap: It's important to resist the temptation of striving for gift equality among recipients. The idea that everyone should receive an equal number of presents or gifts of equal cost can lead to unnecessary overspending. Instead, focus on selecting meaningful and thoughtful gifts that cater to each person's preferences and needs. This approach ensures that your gifts carry genuine sentiment without straining your budget.
The holiday season should be a time of joy and generosity, not financial stress and overspending. By diligently following these tips, you can maintain control over your holiday shopping and make the most of your budget while ensuring your loved ones receive heartfelt and meaningful gifts.
Saving / Investing
I just moved to Oklahoma and honestly, the thought of severe weather freaks me out. Is there any way to prepare my family? (posted March 2, 2023)
Whether you’re talking about blizzards, tornadoes or hurricanes, severe weather happens everywhere. Residents who have lived in Oklahoma for a while know how quickly a normal rain storm can turn into something severe. The difference is, they have learned, you can’t control nature but you can be prepared. Consider taking these steps to prepare for severe weather season today:
Make a plan. The worst thing you can do in the middle of a disaster is panic. So, prepare for it while there isn’t one. Create a safety plan and practice it with your whole family so everyone knows what to do. To start creating your plan, being sure to discuss these five questions:
- How will we receive emergency alerts and warnings? Remember, electronics may not work.
- Where will we go to find shelter?
- What is our evacuation route?
- Where should we meet if we’re not all together before the disaster occurs?
- What is our communication plan?
Designate an out-of-state check-in contact. Many times, during a natural disaster, cell towers can go down and lines may ring busy. If your family is separated during an emergency, you may be more successful calling family or friends long-distance than trying to reach someone within a disaster area when cell phone coverage may be spotty. Visit Ready.gov to download the Family Emergency Communication Plan.
Prepare a Disaster Supply Kit. The supplies you’ll need will often be the hardest to find in the aftermath of a storm or other disaster. It’s a good idea to include at least 3 days’ worth of supplies in your kit. To relieve some of the strain on your bank account, plan to assemble your kit by purchasing/collecting your items over a few weeks’ time. Check out these lists from the Oklahoma Department of Emergency Management and Ready.gov.
Consider the needs of everyone in the household. If disaster strikes, you may have to leave at a moment’s notice and you may not return for a while. Account for the needs of infants, the elderly or disabled members of your household. Round up a ready supply of items necessary for their care, preferably an all in one box or suitcase. Keep medications and first aid equipment in a designated place that can be accessed quickly by an adult in the household. Discuss and practice each person’s responsibilities for assisting others, including pets.
Have an emergency fund. Create an emergency fund—if you don’t already have one—and always consider keeping a small amount of cash on hand. During a disaster, your debit and credit cards may not work when you need to purchase supplies, fuel or food.
Check your insurance coverage. The worst thing to find out after a disaster is that you didn’t have the coverage on your belongings you thought you did. While things are just that—things—rebuilding after a disaster can cause severe financial strain if you aren’t prepared.
When you have a plan, the unknown of a severe weather disaster is a little less scary. So, don’t wait. Start preparing today.
Retirement
I completed my college education last year and have since gotten an entry-level position with a great company. With the repayment of my student loans and everyday living expenses, I find myself with limited discretionary income. Is it truly necessary to start saving for retirement at this early stage of my career? (posted October 6, 2023)
When it comes to the matter of saving for retirement, the adage "there's no time like the present" holds true. It is never too early to begin contemplating how you will finance your post-retirement lifestyle. The key lies in starting early and harnessing the power of compound interest, which entails earning interest not only on your initial savings, but also on the interest those savings accrue over time. By doing so, you significantly enhance your prospects of attaining the financial security required during your golden years.
If you are grappling with the challenge of allocating funds for a better future, consider implementing these straightforward strategies:
1. Trim Expenses: While it's essential to enjoy life's little pleasures occasionally, be cautious if indulgent habits are turning into daily rituals. Analyze the long-term impact of such spending patterns on your ability to save. Perhaps opt for brewing your coffee at home instead of frequenting expensive cafes, redirecting the money saved towards your retirement fund. Reassess your weekly spending habits to identify any other costs that have evolved from occasional splurges into regular expenses.
2. Use Credit Carefully:. Treat credit as a tool, not as an additional income source. Using credit to sustain a lifestyle beyond your means will incur more costs than what meets the eye. Unless you can consistently clear your balance each month to evade interest charges, exercise restraint in your credit card usage. Purchase only within your financial means, steer clear of late fees, and avoid costly cash advances. By doing so, you can allocate the money you would otherwise spend on monthly credit card payments to your retirement savings.
3. Limit Dining Out: Reserve dining out for special occasions, as preparing meals at home is typically more cost-effective for most households. By bringing your lunch and cooking dinner more frequently, you can free up funds from each paycheck to contribute to your retirement savings.
4. Preserve Windfall Income: Windfall income, such as tax refunds and gifts, may feel like found money. The temptation to splurge can be strong, but a wiser approach is to channel such windfalls into fortifying your savings. If desired, indulge yourself modestly, but invest the majority of the windfall into your retirement fund.
5. Pay Yourself First: Prioritize savings by allocating money before addressing other financial obligations. One of the most effective methods to achieve this is by establishing automatic savings deposits. Through your financial institution, set up automated deposits to resist the impulse to spend instead of save. Additionally, consider contributing to your employer-sponsored retirement plan, particularly if your employer matches a portion of your contribution. This retirement account deducts funds directly from your gross pay, ensuring you’re not missing the money and delaying taxation until withdrawal during retirement.
With prudent planning and thoughtful decision-making, saving for retirement is feasible even on a limited income. For more insights on money-saving strategies and retirement planning, explore our Retirement Planning tips and tools.
Lifestyle
I feel like I'm always forgetting financial deadlines and misplacing important monetary documents. Can you give me some suggestions on how to get my finances organized and keep them on track? (posted August 2, 2023)
It's never a good feeling when you realize you've missed a financial deadline or lost an important document. However, with a little bit of effort and organization, you can avoid these situations. Consider these tips to help you get your finances organized and keep them that way:
Create a Budget: First and foremost, it's essential to create a budget. This will help you keep track of your income and expenses, and ensure that you have enough money for everything you need. Start by listing all your income sources and your regular expenses, such as rent, utilities and groceries. Then, factor in any irregular expenses you might have, such as car repairs or medical bills. With a budget in place, you'll be better equipped to plan for the future financial obligations. You'll also be able to identify any areas where you might be overspending and adjust accordingly. For more tips on setting up a budget, check out our resources on OklahomaMoneyMatters.org.
Establish a Filing System: One of the best ways ot keep track of important documents is to create a filing system. Start by getting a box or a filing cabinet, and separate your documents by category. These categories might include things like bank statements, credit card bills, tax documents, and warranties. Once you have determined your categories, label each folder or envelope so you can easily find what you're looing for.
Digitize it: If you're not a paper person and clutter stresses you out, you might want to consider adding a digital component to your filing system by scanning your documents and saving them to an online storage account.
Set Reminders or Automate: It's easy to forget financial deadlines if you don't have them written down somewhere. To avoid this, create a list of important dates, such as tax deadlines and payment dates for insurance premiums and credit card payments. Then, set reminders for yourself using a calendar app or a reminder program. You can also set up automatic payments for bills to ensure they're paid on time. Just be sure to keep track of your bank balance so you know you have enough money in your account to cover these expenses..
Review Your Finances Regularly: Make it a habit to review your finances regularly. This will help you stay on top of any changes in your income or expenses and adjust your budget as needed. You might also want to review your credit report periodically to ensure there are no errors or fraudulent accounts listed. AnnualCreditReport.com makes this easy by allowing you to have a free credit report from each of the three credit bureaus once every 12 months. Regularly reviewing your finances will also give you a better understanding of where your money is going and where you might be able to cut back.
Consider a Financial Advisor: If you're feeling overwhelmed or unsure about how to get your finances in order, consider working with a financial advisor. They can provide guidance and advice on budgeting, investing and saving for retirement. When choosing a financial advisor, make sure they're licensed and have experience working with clients in situations similar to yours. Consider an organization like the National Association of Personal Financial Advisors to help narrow your search.
Getting your finances organized can seem like an overwhelming task, but it's essential for staying on top of your financial obligations. By taking the time to set up a few simple steps, you can take control of your finances and stay ahead of deadlines. With a little bit of effort and organization, you can avoid the stress and anxiety that comes with forgetting important financial deadlines or losing important documents.
Every year, I'm determined to fix my finances but then in December, I realize I haven't gotten any closer to reaching my goals. It all seems so overwhelming, and I don't know where to start. Help! (posted January 5, 2023)
A new year offers an opportunity to reflect on where you've been and to make plans for your future goals — whatever those may be. By identifying that you don't know where to start and seeking help, you've already made progress in fixing the situation. Consider these steps to get you closer to those financial goals this year.
Assess where you are: You can't know where you're going until you know where you've been. That said, the first and most important step is to evaluate where you are right now — at this moment. How much debt do you have? Do you have any money saved for an emergency?
Decide where you want to be: Take a moment to visualize where you want to be at the end of this year. What does that look like? Are you completely debt free? Do you have a healthy emergency fund? Are you working toward building wealth?
Be SMART with your goals: Once you have a realistic picture of what success looks like, it's time to be SMART about your goals. SMART goals are:
- Specific – Know exactly what you're aiming for.
- Measurable – Decide how you'll track your progress.
- Achievable – Is your goal realistic? Do you have the skills you need to achieve it? If not, how can you acquire them?
- Relevant – Why is this goal important to you? How will you or others benefit in the long run?
- Time-bound – A final deadline helps to keep you on track to reach your destination, and incremental deadlines make your goal seem more attainable.
Create a spending plan, and review it regularly: Budgeting the money you have is the most important key to financial success. The amount of money doesn’t matter if you don’t have a plan in place to manage what you have. To learn how to create a budget, check out our budgeting resources at OklahomaMoneyMatters.org.
Establish an emergency fund: The unexpected happens — a car accident, a sick child, an unplanned home repair — and it can derail your financial goals FAST. If possible, it’s best to save three to six months of necessary living expenses in your emergency fund, but in the meantime aim to save at least $1,000 to cover minor bills and repairs. Put your money somewhere easily accessible, like an interest-bearing savings account or money market account.
Pay off debt: Your money can't work for you if it's earning interest for someone else. That's why it's important to pay off debts as quickly as possible. Tricks like the debt snowball method can help you prioritize and speed up your debt payoff journey. Before you know it, you'll have more money to put toward those big goals. If you're overwhelmed and don't know where to start, visit nfcc.org to find a local nonprofit credit counselor who can help you figure out a plan.
Prioritize financial wellness: When creating new financial habits that bring you closer to your goals, your money mindset is as important as your goals and plans. Give yourself some grace for any mistakes you've made in the past and work toward actively changing the bad habits and beliefs that were keeping you stuck.
Save and invest for the future: The key to long-term financial success is to make your money work for you. Consider talking to a certified financial planner to help you access your future needs and create a plan to help you succeed. Visit plannersearch.org to find local certified financial planners who specialize in the areas you feel need improvement. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.
For more information to help you reach your financial goals, check out the resources on OklahomaMoneyMatters.org.
Budgeting
A friend suggested that creating a personal finance calendar with monthly and yearly tasks would help me stay on top of my finances. Can you explain how they work and how I can create one? (posted Sept. 1, 2023)
Creating a personal finance calendar can be an excellent tool to help you stay in control of your money and improve your financial well-being. Having a plan can assist you in staying on top of your finances by tracking monthly and yearly monetary tasks. This can include paying bills, reviewing your credit report and saving for retirement. Additionally, a personal finance calendar can help you avoid late payments and other - sometimes costly - financial mistakes. By staying organized and keeping track of your financial deadlines, you can avoid late fees and other penalties that may harm your credit score. Regularly reviewing services like insurance or your retirement plan will ensure you're getting the best deals. Creating your own personal finance calendar is simple. Consider these step-by-step guidelines to get started:
Determine your financial tasks: The first step in creating a personal finance calendar is determining the tasks to be incorporated. This can include paying bills, saving for retirement, reviewing your credit report, and tracking spending.
Group your tasks by frequency: Once you've determined your financial tasks, group them by frequency. For example, you might have monthly functions like paying bills and reviewing your budget, as well as a few yearly duties like evaluating your insurance policies and contributing to your retirement account.
Choose a calendar system: Next, choose a plan that works for you. This can include using a physical planner, a digital calendar, or a combination of both. Consider your preferences and lifestyle when choosing a system.
Add your financial tasks to the calendar: Once you've determined your tasks and chosen a system, add your information to the calendar. Remember to include due dates and deadlines to monitor your tasks.
Schedule reminders: Finally, schedule reminders for your financial obligations. This might include setting up alerts on your phone, sending yourself email reminders, or using other types of prompts.
Credit
Credit Cards
My husband and I want to get our daughter a debit card of her own so we can start teaching her about money management. There are so many options that we're a little overwhelmed. How do I pick the best one? (posted May 4, 2023)
In the age of digital cashless payments, it’s become more and more important to have a debit card. Starting early with a debit card can also help you teach your child how to make their own financial decisions, learn how to budget for current and future expenses, how to prioritize savings, and even learn how to fix money mistakes while still having the parental supervision to keep them from real money issues.
If you’re considering getting your child a debit card, here are some things to keep in mind when comparing the options:
Age Restrictions: While there are numerous kid-focused options for learning money management, many cards require that the child is at least 13 years of age. Be sure to read the fine print before signing up.
Parental Controls: Many children’s debit cards have spending controls, and some may offer more than others. When comparing options, consider if they have things like spending alerts, merchant blocking or the ability to lock or unlock the card remotely.
Fees: Some debit cards for children are free, but most have a monthly fee attached for additional features. Be aware of any extra fees that may come with the card — such as overdraft fees, and reload or ATM costs. Just because it’s free, doesn’t mean it’s actually free. Depending on your needs, the useful features may outweigh the monthly costs.
Limits: Be aware of spending and transaction limits on debit cards. Some offer lower limits than others, so make sure to understand the type of spending you expect your teen to do before signing up.
Minimum and Maximum Balances: Since children usually don’t have significant sources of income, accounts that allow kids to maintain a small balance can be a useful thing to consider.
Mobile App: Look for debit cards that have a mobile app associated with them. These will allow your child to monitor their own spending and — depending on the card — may have features to help them budget and save.
Educational Features: Consider if the debit card you’re using has extra educational resources tailored to children. If so, they may assist you as you guide your child on their journey to learning money management.
Extra Features: Many apps offer additional features that provide things like allowance transfers and chore tracking, as well as the ability to split money into separate categories such as spending, savings and charitable giving.
Whichever card you choose in the end, it’s important that you talk to your child about their spending. For more resources on how to teach your kids about money, check out Oklahoma Money Matters’ resources for parents at OklahomaMoneyMatters.org.
Debt Management
I was laid off last year and my credit suffered because of several missed payments and the increasing debt during that time. I've been seeing ads about credit repair companies. Can they actually help fix my credit, or is it a scam? (posted Dec. 1, 2023)
If you're trying to pay off debt and improve your credit score, working with a credit repair service for assistance may be tempting. These companies specialize in enhancing your credit standing by challenging outdated or inaccurate information on your credit reports and, often negotiating with your creditors on your behalf. Credit repair services typically come at a cost, however, and it usually takes several months to see much progress. Reputable credit repair services scrutinize your credit reports for inaccurate information and initiate disputes on your behalf.
Credit repair services can address various errors, including:
• Accounts that do not belong to you.
• Bankruptcy or legal actions that are not associated with you.
• Misspellings that might mix in negative entries for someone with a similar name or prevent positive entries from being reported accurately.
• Negative marks that are too old to be included.
• Debts that cannot be validated or verified.
While reputable credit repair companies offer legitimate services, the industry also has some bad apples. Therefore, it's essential to carefully vet any company you're considering. So, if you choose to hire one, it's necessary to investigate the companies you may want to work with. Consider these tips when deciding if a company is right for you:
What do they provide? Under the Credit Repair Organizations Act, companies offering credit repair services must provide you with a clear breakdown of costs and an estimate of the time it will take to achieve results. Additionally, they must allow you three business days to cancel their services without incurring charges. A reputable company should also guide you in managing your existing credit accounts to prevent further damage. Importantly, trustworthy firms will not make any guarantees or encourage dishonest practices.
What does it cost? Credit repair services usually charge a monthly fee, varying significantly on the service they’re providing. There may also be an initial setup fee to get started. Some companies offer tiered packages with additional services like credit monitoring or access to credit scores at higher pricing levels.
Can I do it myself? Most services a credit repair company offers to do for you, you can do yourself if you know where to begin. It's easy to get started by obtaining your credit reports from the three major credit reporting bureaus — Experian, Equifax, and TransUnion — using AnnualCreditReport.com. You’re entitled to a free report once every 12 months from all three bureaus.
Then, follow these steps:
Dispute any errors on your credit reports with the credit bureaus. Each bureau offers an online dispute process, often the quickest way to address issues.
Identify information that is accurate, but unverifiable. Unsubstantiated information must be removed, though it may be reinstated if verified later. For instance, a debt to a retailer, now out of business, could only be considered verifiable if a collection agency can prove ownership.
Work on improving your payment history. Your payment history is the most influential factor affecting your credit score. Timely payments are essential for a higher score.
Reduce your credit utilization ratio. The credit utilization ratio is the percentage of a borrower’s available credit limit that is currently being used. A lower ratio is better for your credit score.
Whether you opt for self-guided credit repair or hire a company to assist you, it is wise to have a long-term plan for managing and maintaining your credit going forward. Visit the National Federation of Credit Counselors at https://www.nfcc.org/ to find a not-for-profit agency in your area.
I've been trying to pay off debt and get my finances in order, but I feel like I keep going in circles. How do I stop the cycle? (posted June 2, 2023)
Many people assume that to get out of debt, build wealth, or stop living paycheck to paycheck, you simply need to change your financial habits. While that’s true, to be successful you also need to change your mindset around money.
Our money mindset is largely influenced by our past experiences — whether good or bad. If they were bad, the good news is, with some intentional work you can change those existing money attitudes and habits to help you reach your financial goals. Consider these steps to shift your mindset toward financial success:
Determine your values: First, it’s important that you share any changes in your name, email, address or phone number with the Department of Education, so you don’t miss vital information that could impact your finances. You can update your personal data, as well as find out who will be servicing your loans, by visiting StudentAid.gov.
Take control: The first step to success is to start. You have the ability to change your financial future. Remind yourself that you’re in control and figure out where you are. It can seem scary at first, especially if you have anxiety about your money. Once you know what steps you have to take, the rest is easier. No matter how bad it seems today, it can only get better from here.
Get comfortable with discomfort: Getting your finances in order is going to take some work. It isn’t always going to be fun and you won’t always like it. Just keep doing your best every day and learn from your mistakes.
Don't dwell on your past mistakes: No one’s financial journey has been perfect. Have compassion for yourself and others. Move forward with the knowledge that you learned from those missteps.
Stop keeping up with the Joneses: Let go of comparisons to everyone else. Do what’s right for you. When it comes to fixing your finances and building wealth, it’s your personal journey. No one else’s standards or timeline will work. They will just rob you of the joy you’ll get from making progress.
Let go of limiting beliefs: Internal beliefs like, “This is too hard,” “I can’t do this” or “I’m just not good with money” are some examples of limiting beliefs. They do just that — limit you. You will continue to go in circles if you don’t dig deep to find out where these beliefs came from and take them on. You may even continue to make the same mistakes. Consider journaling or seeking the help of a mental health professional if you’re struggling.
Track your progress: The easiest way to keep your head in the game when things get tough is to see how far you’ve come. Look back on where you were financially when you started this journey and celebrate the steps you’ve made, even if you aren’t to the end goal yet. Utilizing visuals can help keep you motivated and help you combat those negative beliefs when they come up.
Keep moving forward: Everyone will have good and bad days on this journey. Life happens and you may encounter some setbacks from time to time. That’s normal and totally okay. Just remind yourself how far you’ve come and most importantly remember, this is a long-term game — a marathon, not a sprint. You’ll get there eventually.
Get help: No one knows everything about personal finance when they’re first starting out. Use all the resources at your disposal. Need some tips on how to get started? Check out our free resources at OklahomaMoneyMatters.org.
Trying to get out of debt and don’t know where to start? Consider a nonprofit credit counseling service — like GreenPath Financial Wellness or one of the many similar organizations found at the National Foundation for Credit Counseling — to sit down and help you create a game plan.
Looking to build wealth and save for retirement? Consider speaking with a financial planner. You can find some in your area on PlannerSearch.org .
I graduated from college in 2021. Because of the CARES Act forcing a pause on payments, I haven't had to pay back my student loans yet. What is the best way to get ready for repayment to start? (posted July 7, 2023)
Anyone who currently holds federal student loans should be preparing for payments to restart in October — especially those who graduated between December 2019 and May 2023. There will be no additional extensions. It’s important to be prepared so you aren’t surprised in October when your bill arrives.
Generally, federal student loans provide borrowers a six-month grace period after graduation, leaving school, or dropping below halftime enrollment status before repayment begins. The grace period gives you time to get ready for the repayment process by taking the following steps. Graduates who should have entered repayment during the COVID-19 payment pause will not receive an extended grace period once repayment begins, so consider taking these steps now:
Update your contact information: First, it’s important that you share any changes in your name, email, address or phone number with the Department of Education, so you don’t miss vital information that could impact your finances. You can update your personal data, as well as find out who will be servicing your loans, by visiting StudentAid.gov.
Estimate the payment: Estimate your loan payment and select a payment plan that works for you. Use the loan simulator tool at StudentAid.gov to review your loan balance and choose from several different repayment plans to find the one that best fits your long-term goals. Getting your application in for a new plan now is a smart way to ensure you’re ready with a payment you can afford when the time comes.
Build it into your budget: Now that you’ve estimated your monthly payment and applied for a repayment plan, create a budget that includes your loan payment so you’ll be ready when it actually comes due. If you’re not sure how to set up a spending plan, check out the interactive budget calculator and other helpful resources at OklahomaMoneyMatters.org.
Stash those dollars: Once your budget is updated to reflect your estimated monthly loan payment, consider using your grace period to build an emergency fund. Until it’s actually time to start the repayment process, consider putting that payment amount in savings every month to cover emergencies like a flat tire or medical bill.
Get familiar with your servicer: There have been several changes in companies who are servicing federal student loans since the pause began. It’s important to verify that your servicer hasn’t changed, but if it has, you should get familiar with your new company. Remember, if you won’t be able to make your payment when the pause ends, talk to your servicer now BEFORE it becomes due. They have options to help you stay on track when repayment is difficult.
Confirm your autopay: Last but certainly not least, if you were repaying your loans on autopay before the payment pause began, confirm that your autopay is still in place with your accurate bank account information.
For more resources to help you in your student loan repayment journey, visit our friends at ReadySetRepay.org
I've been hearing a lot about Public Service Loan Forgiveness. I'm a doctor at a for-profit hospital and was told my employer doesn't qualify. Are there any programs for people in the medical field besides PSLF? (posted April 6, 2023)
That’s a great question. The name "Public Service Loan Forgiveness" can sound a little misleading since it is more dependent on who you work for (a government entity or 501c3 nonprofit) than having a career serving the public in a field like medicine. However, medical professionals who don’t work for one of these entities may not be completely out of luck. There are many other forgiveness programs that may allow them to get some of their debt forgiven. Consider if any of these might benefit your situation:
Dental Loan Repayment Revolving Fund: A revolving fund has been established by the State Department of Health to be designated as the Dental Loan Repayment Revolving Fund for the purpose of repaying dental student loans. Contact the State Department of Health, Dental Health Services at 405.271.5502 for details.
Faculty Loan Repayment Program: The Faculty Loan Repayment Program (FLRP) pays up to $40,000 for a two-year service obligation to eligible health professions faculty members from disadvantaged backgrounds. Participants should also receive matching funds from their employing educational institution. Visit the FLRP website for applications, deadlines and additional information.
Indian Health Service Loan Repayment Program: The Indian Health Service Loan Repayment Program (IHSLRP) pays up to $24,000 per year for two-years of continuous, full-time service at Commissioned Corps, Civil Service and Direct Tribal Hire facilities or in an approved Indian health program. Visit the IHSLRP website for applications, deadlines and additional information.
National Health Service Corps: The National Health Service Corps (NHSC) Loan Repayment Program pays up to $50,000 tax-free, to primary care medical, dental and mental health clinicians in exchange for two years of service at an approved site in a Health Professional Shortage Area. Visit the NHSC website for applications, deadlines and additional information.
Navy Health Professions Loan Repayment Program: The U.S. Navy's Health Professions Loan Repayment Program (HPLRP) provides a maximum yearly loan repayment of $40,000 (minus about 25% federal income taxes). Payment is sent directly to the lending institution. More information is available on the HPLRP website.
Nursing Education Loan Repayment Program: The Nursing Education Loan Repayment Program (NELRP) aims to alleviate the critical shortage of registered nurses in non-profit health care facilities. The program pays 60% of an eligible participant's qualifying education loan balance for two years of service. For an optional third year, participants receive an additional 25% of their original qualifying education loan balance. Visit the NELRP website for applications, deadlines and additional information.
Oklahoma Medical Loan Repayment Program: A loan repayment program for primary care physicians (family medicine, geriatrics, general internal medicine, general pediatrics, obstetrics/gynecology and emergency medicine) that provides financial assistance to physicians in repaying legitimate, documented educational loans. Visit the Physician Manpower Training Commission website to see if you qualify and to learn about other loan assistance programs available.
To learn more about student loan management — including forgiveness programs — check out ReadySetRepay.org. Ready Set Repay, the student loan management initiative of the Oklahoma College Assistance Program, works with student loan borrowers and Oklahoma higher education institutions to help students make smart borrowing decisions, and successfully repay their student loans.
Consumer Issues
In a meeting last week, my boss reminded us that open enrollment is around the corner. What does that mean, and what steps do I need to take to ensure that I don't miss anything important? (Posted September 5, 2024)
Open enrollment is the designated period each year when you can enroll in or change your health insurance plan. Typically occurring in the fall, this window allows you to adjust your coverage based on your changing needs. Consider these steps when considering your options.
Review your current benefits: Start by evaluating your existing health insurance plan. Consider what worked well over the past year, and what didn't. Did you have adequate coverage for your medical needs? Were your out-of-office costs manageable?
Assess your and your family's needs: Consider any changes affecting your health coverage needs. Have you or your family members developed new medical conditions? Are you planning on having a baby? Such life-changing events can significantly influence the type of coverager you should opt for.
Compare options: Many employers offer a couple of different health insurance options. Compare each plan's benefits, premiums, deductibles, and out-of-pocket maximums. Remember to check the network of doctors and hospitals to ensure your preferred providers are covered.
Check out your other options: Health insurance isn't the only benefit to review. Look at dental and vision insurance, life insurance, disability coverage and any wellness programs your employer offers. These can provide significant support and should be factored into your decision-making process.
Utilize tools like FSAs or HSAs: Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are tax-advantaged accounts that can help you save money on medical expenses. FSAs must be used wtihin the plan year, while HSAs can roll over year to year and even be invested for growth. Determine how much you need for the upcoming year and allocate funds accordingly.
Be sure to attend informational sessions: Many employers offer informational sessions during open enrollment. Take advantage of these resources to get detailed information about your options and the perks of one plan versus another. Ask any questions you may have.
Watch for deadlines: You must complete your open enrollment by the deadline to avoid a coverage lapse or possibly getting stuck with a plan that doesn't meet your needs. Mark the dates on your calendar and give yourself plenty of time to review your options and make informed decisions.
Watch for deadlines: You must complete your open enrollment by the deadline to avoid a coverage lapse or possibly getting stuck with a plan that doesn't meet your needs. Mark the dates on your calendar and give yourself plenty of time to review your options and make informed decisions.
Tax time is approaching, and I can't wait to get my refund. Recently, a freind told me that getting a large refund isn't a good thing. Can you tell me why? (posted February 2, 2023) For many people, tax refunds are something to look forward to. Why wouldn’t they be? It’s exciting to imagine all the things you’ll be able to do with that money. As much fun as it is, your friend is right – getting a tax refund isn’t ideal. If you receive a refund, it means you’ve had too much withheld from your paycheck. That means you’ve essentially given Uncle Sam an interest-free loan on money you could be using every month to pay bills, buy groceries or get closer to your financial goals! Instead of aiming for a refund, a better strategy is to try to break even – ideally, you don’t have to pay the IRS and they don’t have to pay you. First, figure out how much you should actually be withholding. Grab your last pay stub and explore the IRS withholding calculator to help you determine how much tax should be withheld from your paycheck. Next, talk to your employer’s HR department as soon as you can to adjust your withholdings by completing a new W-4 form. This one step could mean more money in your pocket every month; that’s like giving yourself a raise. If you’re like many people who use their annual tax refund to kick-start their savings or pay down debt, it’s important to know there’s a better way to maximize your money. Instead of waiting for the IRS to write you a check at tax time, take full control of your finances by cutting out the middleman. Once you’ve adjusted your withholdings, continue living off the monthly amount you were previously bringing home and put the “extra” to work for you. If paying down debt is your goal, commit this money to debt reduction by implementing the debt snowball. If padding your emergency fund ranks high on your priority list, consider having this “extra” income automatically deposited into an interest-bearing savings account at a bank or credit union and watch your money grow. This time next year, you’ll have a nice amount saved, plus the interest it’s earned. For more information about income taxes, tax forms and withholding, visit IRS.gov.
Taxes
