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Don’t speak personal finance? Not to worry! Mint is celebrating World Dictionary Day with a list of must-know money terms to bring some savvy to your saving.
Quiz yourself to see how many terms you know! Have a definition of a term that’s not on our list? Need help with an tough acronym? Ask us on Twitter with the hashtag #MyMintTips.
Must-Know Money Terms
401(K)
A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.
IRA
An investing tool used by individuals to earn and earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs.
Traditional and Roth IRAs are established by individual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for sole proprietors and partners) up to a set maximum dollar amount. Contributions to the Traditional IRA may be tax deductible depending on the taxpayer’s income, tax filing status and coverage by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible.
Net
The final amount that remains after all other amounts have been taken away. Examples: net profit, net income, net worth
1095 Forms
In 2014 the Affordable Care Act, also known as Obamacare, introduced three new tax forms relevant to individuals, employers and health insurance providers. They are forms 1095-A, 1095-B and 1095-C. For individuals who bought insurance through the health care marketplaces, the 1095-A will provide information that will help to determine whether you are able to receive an additional premium tax credit or have to pay some back. 1095-B’s and C’s are for people with private insurance or from their employer — you just need these for your records, and they’re not required to file.
APR
The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.
FICO Score
A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant’s credit risk and whether to extend a loan. FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score. Using mathematical models, the FICO score takes into account various factors in each of these five areas to determine credit risk: payment history, current level of indebtedness, types of credit used and length of credit history, and new credit.
A person’s FICO score will range between 300 and 850. In general, a FICO score above 650 indicates that the individual has a very good credit history. People with scores below 620 will often find it substantially more difficult to obtain financing at a favorable rate.
ARM
An adjustable rate mortgage is also known as a “variable-rate mortgage” or a “floating-rate mortgage”.It’s a type of mortgage in which the interest rate paid on the outstanding balance varies according to a specific benchmark. The initial interest rate is normally fixed for a period of time after which it is reset periodically, often every month. The interest rate paid by the borrower will be based on a benchmark plus an additional spread, called an ARM margin.
Debt to Income Ratio
A personal finance measure that compares an individual’s debt payment to his or her overall income. A debt-to-income ratio (DTI) is one way lenders (including mortgage lenders) measure an individual’s ability to manage monthly payment and repay debts. DTI is calculated by dividing total recurring monthly debt by gross monthly income, and it is expressed as a percentage.
For example, John pays $1,000 each month for his mortgage, $500 for his car loan and $500 for the rest of his debt each month, so his total recurring monthly debt equals $2,000 ($1,000 + $500 + $500). If John’s gross monthly income is $6,000, his DTI would be $2,000 ÷ $6,000 = 0.33, or 33%.
Equity
Equity is the value of an asset less the value of all liabilities on that asset. The term’s meaning depends very much on the context. You can think of equity as one’s ownership in any asset after all debts associated with that asset are paid off. For example, a car or house with no outstanding debt is considered entirely the owner’s equity because he or she can readily sell the item for cash, with no debt standing between the owner and the sale. Stocks are equity because they represent ownership in a company, though ownership of shares in a publicly traded company generally does not come with accompanying liabilities.
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College will cost more for students borrowing during the 2023-24 academic year as federal student loan interest rates climb to heights not seen in a decade or longer.
As of July 1, undergraduates who take out new direct federal student loans will see interest rates rise to 5.50%, the Education Department’s Federal Student Aid office said Tuesday — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
Interest rates on graduate direct loans, available to graduate and professional students, will rise to 7.05% from 6.54% the year prior. PLUS loans, which parents and grad students can use to fill in education funding gaps, will jump to 8.05% from 7.54%. Here are the higher 2023-24 rates for each type of federal student loan, compared with the 2022-23 academic year:
2022-23 interest rate
2023-24 interest rate
Undergraduate direct loans
Graduate direct loans
PLUS loans
Undergraduate direct student loan interest rates haven’t been this high since 2013. Interest rates on direct graduate loans and PLUS loans, introduced with fixed rates in 2006, have never been this high.
Rising rates makes college pricier
Higher interest rates mean paying off loans will cost more. Each year, usually in mid- to late May, the government sets fresh federal student loan interest rates for the academic year ahead by adding the U.S. Treasury’s May 10-year note auction yield with an additional “add-on” percentage, which varies depending on loan type. The final rates apply to new loans doled out starting July 1.
Ultimately, charging more interest will make college more expensive for the millions of college students and their families who take out loans. Today, nearly 44 million people collectively owe roughly $1.6 trillion in outstanding federal student loans — and federal loans account for about 93% of the total student debt burden, according to a NerdWallet analysis of Department of Education and Federal Reserve data.
For example, if you start college this fall and borrow a total of $31,000 in unsubsidized federal direct loans (the maximum loan amount for dependent undergraduates) with a 5.50% interest rate, you’ll wind up paying back almost $50,000 under a standard 10-year repayment plan. If you’d started college in 2020-21 and taken out the same $31,000 federal loan with a record-low 2.75% interest rate, you would’ve had to repay around $39,500 including interest over 10 years.
The higher rates will apply to all students who take out new federal loans for college or graduate school in the 2023-24 academic year. It’s important to note that all federal student loans have fixed interest rates, so they won’t change during the repayment period.
Federal vs. private student loan interest rates
In recent years, federal student loans have offered lower interest rates (and fees) than private alternatives, but that may no longer be true for some borrowers. The average private fixed-rate undergrad student loan charges 5.99% to 13.78% in interest, according to a January 2023 NerdWallet analysis. As a result, private loans may start to look more attractive.
However, private student loans have drawbacks. They usually require a student to have a high credit score — or a co-signer with a high credit score — to qualify for the lowest rates. The co-signer, typically a parent, is equally responsible for the loan. Federal student loans don’t allow co-signers, and only federal PLUS loans require a credit check.
Federal loans also offer benefits like payment plans that cap monthly bills at a certain percentage of your income, temporary payment pauses if you lose your job or experience financial hardship, and loan forgiveness programs. Private loans don’t typically offer these protections.
Though federal interest rates still have room to climb, they could soon hit a ceiling. Under the Higher Education Act, rates may not exceed 8.25% for undergrad loans, 9.5% for grad loans and 10.5% for PLUS loans. Private student loan lenders have much higher maximum interest rates.
Submit the FAFSA to minimize borrowing
Minimize your total college debt — and the amount of interest you’ll pay over time — by maximizing funding sources you won’t have to repay, like scholarships, grants, work-study and other financial aid options.
You’ll need to submit the Free Application for Federal Student Aid, or FAFSA, to qualify for most federal, state and school grants. That includes the federal need-based Pell Grant, which, starting in 2023-24, can give students up to $7,395 per year in free money to pay for college. Scholarships also often require applicants to submit the FAFSA, including some offered by private organizations.
The FAFSA is open until June 30, 2024, for the 2023-24 school year, but don’t delay. Fill it out as soon as possible to increase your chances of getting more money. Some types of aid draw from limited pools and can run out.
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Teenagers tend to have few financial obligations. They may need to work a part-time job to earn spending money, but generally, no one is expecting them to put food on the table or manage important assets. It’s usually understood that high schoolers don’t yet have the life experience or maturity for those kinds of responsibilities.
And yet, we allow them to take out tens and even hundreds of thousands in student loan debt before they turn 18. That’s a financial obligation on par with buying a home, entrusted to kids who can’t even rent a car. Unfortunately, it’s a reality for most young people looking to get a degree.
That’s why every student needs to be prepared for the harsh reality of borrowing so much money. The more prepared you are to pay back those loans as soon as possible, the less likely you’ll be struggling financially in your adult years. A strong repayment approach can mean the difference between a debt-free life in your 20s and a lingering debt burden in your 30s – and thousands in owed interest. Using a loan calculator with amortization schedule will show you how much your payments need to be in order to pay down the loan in a given time frame.
If you’re about to take out student loans or already have them, here’s what you need to know.
Know What Kind of Loans You Have
Student loans often get lumped into one group, but they can vary widely. The two main types are private loans and federal loans. Like their namesake, federal loans are offered by the federal government. A private loan is a loan offered by a private bank or credit union. Most students have federal loans or a mix of both federal and private.
Federal loans are considered a better option than private loans because they have more repayment and forgiveness options. They also tend to have lower interest rates.
Private loans often require a cosigner, someone who will take on the responsibility of paying off the loan if you default or can’t make payments. Most students have their parents act as the cosigner.
Write down what kind of loan you have, the account number, the interest rate and the amount you originally borrowed.
Know How Much You’re Borrowing
Many students sign up for student loans assuming they’ll be able to pay them off easily after graduation. Most don’t realize how much they’re borrowing until they’ve graduated and the loan comes due.
The best thing you can do for your future self is to look at how much you’ve borrowed so far, how much you’re taking out currently and how much you’ll need for the duration of your time in school.
In 2012, Indiana University started sending out letters to current students explaining how much they owed and how much they would have to pay each month after graduating. Those letters proved to be very effective, reducing how much students borrowed by more than 10%. Three years later, the Indiana General Assembly passed a bill mandating that all state schools release similar letters to their students.
Knowing how much you’ve borrowed will make you more aware of your financial reality, and motivate you to find alternate ways of paying for school. You may try to take more classes per semester and graduate early or apply for more scholarships and grants. Even working a few hours a week in the student library or behind the front desk at your dorm can make a significant difference.
Most students borrow the maximum amount they’re allowed, but that’s not always necessary. Do a projection of how much your expenses will be this semester, including rent, groceries, transportation, utilities, parking, books and other fees. If you end up needing less than you anticipated, tell your loan provider that you’d like to take out less. If you need the same, then stick with that amount.
Looking at your loans on a semester-by-semester basis can help you borrow more or less depending on your circumstances. Create a budget each semester and stick to it, so you can be confident in the amount you’ve chosen to borrow.
Know Your Interest Rate
Every loan has its own interest rate which depends on the kind of loan, when you borrowed and other factors. Interest rates for federal student loans are determined by the government, but private lenders are allowed to charge as much as they want. Currently, federal interest rates for undergraduate loans are 5.05% and graduate degree loans are 6.6%. In 2017, the average variable interest rate for a private student loan was 7.81% and the fixed-rate average was 9.66%.
Know You Can Pay Back Your Loans Early
If you have federal loans, you can start repaying them while still in college. If you borrow too much or find a lucrative part-time job, you can use some of your income to pay back your loans. Doing that now will mean lower payments after you graduate.
If you have private student loans that don’t allow early payments, you can still save money in a savings account and put that toward your loans once they become eligible for repayment.
Know If Your Parents Took Out Student Loans for You
It’s not uncommon for parents to take out loans either from the federal government or a private lender. Some parents do so without telling their kids, because they want to help fund their education. Even if your parents don’t expect repayment, it’s always good to have an idea of how much they’ve sacrificed to get you there.
Other parents take out student loans and expect their children to repay them, as well as any individual bonds they borrowed. As a student you won’t have access to your parents’ loan information, so you have to ask them for the specifics. If you know you’ll eventually be on the hook for any debt your parents took out, you need as much information about the loans as possible.
Ask Your Parents if Any of Their Financial Information Will Change
How much grant and scholarship money you’re eligible for is often dependent on your financial need. Your parents’ income is the single most important factor in determining that eligibility.
If your parents’ income doesn’t fluctuate, you’ll generally receive the same amount every year. If your parents get divorced or your single parent remarries, then your FAFSA could look quite different for the coming year. When my friend’s dad lost his job, she immediately qualified for more need-based grants the following semester.
Know When Your Loans are Due
Even if you’re a freshman in college, it’s important to know when your student loans will come due. Federal loans give you a six-month grace period after graduation, so you don’t have to start repayment until the fall if you graduate in the spring. Private loans have their own system determining when the first payment is due, which varies from lender to lender.
If you’re a senior in college and plan to graduate this year, it’s not a bad idea to look up when your first bill is due. You don’t want to graduate May 15 and find out you owe $500 on June 1. Knowing when that first payment will hit can save you months of worry, and help you create a repayment plan in anticipation.
Know That Student Loan Debt is Real Money
When you first take out student loans, it’s easy to feel like the amount you borrow is just a number. You won’t be forced to deal with it for years, so that $50,000 total doesn’t actually feel like $50,000 dollars. For a teen used to making minimum wage at a coffee shop, that amount is hard to wrap your head around.
But make no mistake, that money is very real – and you will have to pay it back eventually. Acknowledging the reality of your situation can help inform the decisions you make about applying for grants and scholarships, working a side job and managing expenses throughout the year.
Talk to a friend or family member who graduated college with student debt and ask them about their experience. They may be able to shed some light on the reality of living with debt after graduation.
Where to Find Help
The financial aid office at your university can help you suss out where your loans are coming from, how much you’ve borrowed and how to contact your lenders. Once you know who your lenders are, you can reach out to them for more specific information.
You can find a list of the loans you’ve taken out by checking your credit report, which you can do via AnnualCreditReport.com. There are three credit bureaus that publish credit histories, so you’ll want to check all three if it’s your first time looking at your report.
Some lenders may fail to report student loans on your credit, so don’t rely on that exclusively. However, if your credit report shows student loans or other loans that don’t look familiar, contact that lender. It’s possible for lenders to report student loans to the wrong person if you have a similar name or social security number.
If you know you’ve taken out student loans and don’t see them on your credit report, that doesn’t absolve you of the debt. Mistakes made by the lender will still affect you, so be vigilant.
The views and opinions expressed in this content are those of the author and do not necessarily reflect the opinion or view of Intuit Inc, Mint or any affiliated organization. This blog post does not constitute, and should not be considered a substitute for legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
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Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok
Interested in a career as a cosmetologist? Enrolling in an accredited beauty school is a smart first step to take.
One important consideration is how much cosmetology school costs. Tuition can run several thousands of dollars per year and will likely be one of your biggest expenses. But there are other costs to consider as well. Keep reading to learn about the cost of cosmetology school and ways you can help lower your financial burden.
How Much Does Cosmetology School Cost on Average?
Beauty school students can expect to spend anywhere from $5,000 to $20,000 for tuition and fees. The cost of cosmetology school can vary based on location. Schools in major cities tend to charge more than those in smaller communities. To get a full list of expected tuition and expenses, contact the school’s admissions office.
How Much Do Books and Materials Cost?
In addition to tuition and fees, you’ll also want to budget for the cost of books and materials. Textbooks alone can range from $2,000 to $3,000 or more, depending on your instructor. Add to that the cost of any supplies and tools you’ll need to help you practice your craft. Think shampoos, conditioners, styling products, scissors, electric clippers, mannequins, and more. Your cosmetology school may provide some of these materials, but others you’ll need to buy.
How Can You Reduce the Cost of Cosmetology School?
Though cosmetology school typically takes less time to complete than a four-year college, the costs of those few semesters can add up quickly. The good news is, there are different ways you can help lower your financial burden.
Apply for Scholarships and Grants
Scholarships may be based on merit or financial need and generally don’t need to be paid back. Cosmetology schools can point you toward scholarship opportunities, or you can do an online scholarship search to find out what’s available to you.
Grants are typically based on financial need and are offered by the federal government, state government, private companies, and nonprofits. They’re generally awarded in a federal financial aid package. Like most scholarships, grants don’t have to be paid back.
Consider Student Loans
Student loans can help you cover the cost of attending cosmetology school. In general, it’s a good idea to exhaust all possible federal student loan options first before applying for private student loans. Federal student loans have a fixed interest rate that’s usually lower than private loans and also provide certain safety nets like forbearance or deferment.
Recommended: The Differences Between Grants, Scholarships, and Loans
Fill Out the Free Application for Federal Student Aid (FAFSA)
Filling out the FAFSA application is how students can find out how much federal financial aid they’re eligible for, including loans, grants, and scholarships. The FAFSA applies to a single academic year, which means you’ll need to submit a new form each year. To maximize your potential aid, aim to turn in the FAFSA before the annual deadline.
Recommended: FAFSA Tips and Mistakes to Avoid
Save on Textbooks
Cosmetology school textbooks can be pricey. To help lower costs, look into renting textbooks or buying them used. If you do purchase textbooks, consider selling them once the semester ends and putting that cash towards the next set of books.
Rent Supplies
You may be able to rent certain supplies or supplies instead of purchasing them. This is especially helpful for equipment you won’t need after graduation, like practice mannequins.
Live at Home
If possible, move in with family or friends while you’re in school to save on housing and living expenses. If that’s not an option, look into renting a place with roommates and splitting the costs.
Find a Part-Time Job
Getting a part-time job can help you cover some of the cost of cosmetology school — and maybe even take out less in student loans. Look for gigs with flexible hours that allow you to more easily balance work and class. Consider working in an on-campus student salon, if one is offered at your school. Besides the additional practice, you could also make some extra money.
The Takeaway
The cost of cosmetology school can be significant. Tuition runs anywhere from $5,000 to $20,000, and textbooks, supplies and living expenses can add to your financial burden. But there are ways to cover costs, including scholarships, grants, a part-time job, and student loans.
3 Student Loan Tips
Here are our top three tips to help you understand and navigate student loans.
Complete the FAFSA
Even if you don’t think you qualify for financial aid, you should still fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
Understand Your Borrowing Options
Would-be borrowers will want to understand the different types of student loans peppering the landscape: private student loans, federal Direct subsidized and unsubsidized loans, Direct PLUS loans, and more.
Consider Federal Aid First
It’s a good idea to exhaust all available federal aid options before exploring private student loans.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
How much is one year of tuition at an accredited cosmetology school?
Beauty school students can expect to spend anywhere from $5,000 to $20,000 for tuition and fees. But the amount you’ll pay may vary depending on where your school is located.
How long is cosmetology school?
It depends on your program. The national average for a full cosmetology program is between 1,400 to 1,600 hours, according to the American Association of Cosmetology Schools. Full-time students typically finish that program in less than two years. But certain programs are shorter and can be completed in six months or so. For instance, the national average for nail technology is 300 hours; for electrologists is 500 hours; and for esthetics is 650 hours.
Is a high school diploma required to attend cosmetology school?
Some states require a high school diploma or G.E.D., but others do not. You may also need to be a certain age to apply for beauty school. Check the rules in your state to find out if you’re eligible.
Photo credit: iStock/Kemal Yildirim
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender. SoFi Private Student Loans Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. SOIS0223001
California is home to hundreds of top-notch universities and colleges, including the California Institute of Technology, Santa Clara University, Stanford University and the University of California, Los Angeles or UCLA.
With so many higher education options, it’s no surprise that 3 million students attend college in California. While the cost of education in California can be expensive, the state operates various financial aid programs that can make higher education more affordable. From grants and scholarships to free college financing workshops, there are many resources California residents can use to pay for school.
The cost of education in California
California’s higher education system comprises three public segments: the University of California, California State University and California Community Colleges. Students can also choose from 150 private nonprofit schools and 160 for-profit schools.
If you are planning to attend a post-secondary school in California, here is how much you should expect your education to cost, according to data from the National Center for Education Statistics:
Public four-year school: The average cost of attending a public four-year school as an in-state student in California for the 2020-2021 school year was $24,015, including tuition, fees, room and board — nearly 13% higher than the national average.
Private non-profit school: Private schools are much more expensive than public institutions. The average cost in California is $53,680 — nearly 16% higher than the national average.
Public two-year school: The average cost of public two-year schools for in-state students was $1,285, less than half the cost of the national average.
Although those prices may be intimidating, keep in mind that you may not have to cover the entirety out of your pocket. You may be eligible for financial aid programs that reduce the cost.
Financial aid options in California
Regarding state-based financial aid, California stands out for its robust programs. From grants and scholarships to student loan repayment programs, students can qualify for a significant amount of assistance.
You must be a state resident to qualify for California’s financial aid programs. The residency criteria depend on your age and marital status.
If you are under 18, you must meet one of the following requirements:
Your parents must have been legal California residents for one year before the year in which you are applying for financial aid.
You have a parent in the U.S. Armed Forces, stationed in California and on active duty when you enroll.
If you lived with another California resident who is not your parent, you must have lived with them for at least two years.
If you are married or over 18: Married persons, regardless of age, and unmarried persons 18 or older must establish their own residency. You must live in California for at least a full year before applying for financial aid and show proof that you intend to make California your permanent home. Potential proof includes:
California driver’s license.
Mortgage statement for a residential property in California.
Active California bank account.
Voter registration card.
California car registration and insurance.
State income tax return.
California utility bills.
Under the California Dream Act, undocumented students and Deferred Action for Childhood Arrivals, or DACA, recipients can qualify for state financial aid, including in-state tuition rates. To qualify, students must meet the following requirements:
Three or more years of full-time attendance at a California high school, adult school or community college.
Three or more years of full-time high school coursework and attended a combination of elementary, middle and high school for three or more years.
As a California resident, you may qualify for one or more of the following financial aid options:
529 plans.
In-state tuition.
Scholarships.
Student loan repayment assistance.
California 529 Plans
Unlike some states, California does not have a prepaid tuition plan. However, it does have a 529 college savings plan called ScholarShare 529. Under this program, parents and family members can invest money on behalf of a child. The money can grow and deliver compound earnings over time, and withdrawals for qualifying education expenses are tax-free. You can open an account with any dollar amount; the maximum balance is $529,000.
Contributions to ScholarShare529 are not tax-deductible on federal or California income taxes. But California does offer one unique benefit: the CalKIDS program. Through this program, children born on or after July 1, 2022, or who attend an eligible low-income public school within the state will receive a seed deposit to pay for their future education.
Qualifying newborns will receive up to $100 in seed deposits, and low-income students will receive up to $1,500.
California In-State Tuition
Public universities are generally much less expensive than private schools, but only if you attend a school within your state. However, California participates in programs that may allow California residents to attend select colleges in other states and pay a lower rate than out-of-state tuition cost.
Western Undergraduate Exchange: Through the WUE, eligible California residents will pay no more than 150% of the college’s in-state tuition rate. On average, savings total $10,895 per student.
Western Regional Graduate Program: WRGP allows graduate students to pursue master’s or doctoral degrees at partner universities and pay no more than 150% of the in-state tuition rate.
Professional Student Exchange Program: The PSEP program is for students pursuing careers in specific healthcare fields. It allows them to attend school at partner schools at a lower rate. Eligible students can save between $34,100 and $133,600 throughout their programs.
California Grants
California has six major grant programs available to college students:
Cal Grant Program
The Cal Grant program is for qualifying residents attending the Universities of California, California State Universities, California Community Colleges or eligible independent colleges or technical schools.
There are several awards within the Cal Grant program, but students don’t have to apply for each individually. Instead, the state determines your eligibility for each based on your responses on the Free Application for Federal Student Aid, or FAFSA, or the CA Dream Act Application, household income, the schools you list on your application and whether you’re a recent high school graduate.
Cal Grant Community College Entitlement: Low- to middle-income students can receive assistance with tuition and fees at a California community college. Low-income students also may qualify for an additional award for living expenses.
Cal Grant High School Entitlement: This award is for low- to middle-income high school seniors and recent high school graduates. Students can use the grant to pay for their enrollment at two- or four-year schools. In addition, low-income students can qualify for an additional award for living expenses.
Cal Grant Transfer Entitlement: Students who intend to transfer from a California community college to a four-year school may qualify for this award. Low-income students may be eligible for an additional award for living expenses.
Cal Grant Competitive Awards: This award is only for students who do not receive an entitlement grant. It is a competitive award based on the student’s GPA, parent’s education level, family income and household size. Only 13,000 awards are issued per academic year.
Cal Grant Foster Youth: Current or former foster youth can qualify for this grant until their 26th birthday. It can help pay for up to eight years of undergraduate education.
Cal Grant C Award: Students who intend to attend technical or vocational schools can receive up to $2,462 for tuition and fees and up to $547 for tools, books and supplies.
California Chafee Grant for Foster Youth
Current or former foster youth can qualify for up to $5,000 through the California Chafee Grant for Foster Youth program. The money can be used toward your expenses at a qualifying California college, university, career or technical school.
California College Promise Grant
According to the Public Policy Institute of California, approximately 40% of California’s high school graduates enroll in community colleges — the fourth-highest percentage in the nation.
One of the reasons for the popularity of community colleges in the state is the California College Promise Grant. This grant waives student enrollment fees at eligible schools, and students can use other financial aid programs to cover the cost of textbooks or living expenses.
California Dream Act Service Incentive
The California Dream Act is for undocumented and DACA students attending school in California. Under the California Dream Act Service Incentive, students can get up to $4,500 per academic year in grants. To qualify for this award, students must complete at least 150 hours of community service or volunteer work for an eligible organization per semester.
The California Military Department GI Bill Award Program
This GI Bill program pays up to 100% of the tuition and fees at the Universities of California, California State Universities or a California community college for qualifying members of the California Army or National Guard, California State Guard or the California Naval Militia.
Golden State Education and Training Grant
The Golden State Education and Training Grant is a one-time award of $2,500 for Californians who lost their jobs due to the COVID-19 pandemic. It can be used to learn new skills or get additional training to reenter the workforce.
Law Enforcement Personnel Dependents Grant
The Law Enforcement Personnel Dependents Grant is for the spouses and dependent children of employees who lost their lives in the line of duty or were totally and permanently disabled due to an accident or injury caused by violence or force while on duty. Eligible employees include:
Department of Corrections and Rehabilitation.
Department of Corrections and Rehabilitation, Division of Juvenile Justice.
Firefighters.
Law enforcement.
Tribal firefighters
As of the 2022-2023 academic year, qualifying students can receive up to $9,358 per semester.
California Scholarships
In California, some students may qualify for the Middle Class Scholarship. Under this program, students pursuing a teaching credential with less than $201,000 in family income and assets may be eligible for this award. Scholarship amounts vary by school and student.
California Incentive Programs
California instituted education incentive programs to encourage residents to live and work in the state — particularly in areas with shortages of health care professionals or educators. Students can receive money for their education in exchange for committing to working in high-need areas for a specific period.
If the student fulfills their obligation, the award is treated as a grant and does not need to be repaid. However, if the student doesn’t complete their service term, the award is converted into a loan and must be repaid.
California has the following incentive programs:
Golden State Teacher Program
The Golden State Teacher Grant Program awards up to $20,000 to students currently enrolled in a professional preparation program approved by the Commission on Teacher Credentialing and working toward their preliminary teaching credential. In exchange, participants must commit to working at a priority California school for four years within eight years of completing their program.
California Department of Health Care Access and Information Incentives
Through the HCAI, students and graduates pursuing careers in health care — including dentists, mental health counselors, nurses, pharmacists, physicians and social workers — can qualify for up to $25,000 for their education if they make a 12-month service commitment to work in a qualifying facility in an underserved area.
Other California Programs
Besides its scholarships, grants and incentive programs, California also offers Cash for College Workshops. Families can attend and get one-on-one assistance with completing the FAFSA or the California Dream Act Application.
Student loan repayment programs in California
If you’re a California resident and have outstanding student loans, you may be eligible for repayment assistance through the state. To address worker shortages, the state will repay a portion of your loans. In return, you must commit to working in high-need areas for a specific period.
The following student loan repayment assistance programs, or SLRAP, are available in California:
Health care professionals
Health care providers can qualify for a substantial amount of money to repay their loans through the following HCAI programs:
Allied Healthcare
Eligible health care providers who commit to 12-month service obligations in approved counties and sites can get up to $16,000 in loan repayment assistance. Federal and private student loans are eligible for repayment.
Bachelor of Science Nursing Loan
Registered nurses with BSN degrees can get up to $15,000 in loan repayment benefits in exchange for a 12-month service commitment in a medically underserved area. Federal and private student loans are eligible for repayment assistance.
California State Loan Repayment
Through the California State Loan Repayment Program, eligible health care professionals can receive up to $50,000 for an initial one-year service obligation in a federally designated health care professional shortage area. Practitioners can qualify for up to $50,000 in additional assistance by committing to another three years. Both federal and private student loans are eligible for repayment assistance.
County Medical Services
Primary health care professionals at approved county medical services sites can receive up to $50,000 for an initial one-year term. An additional $50,000 is available for working for another three years. In addition, both federal and private student loans can qualify for repayment assistance through the County Medical Services program.
Licensed Mental Health
Licensed mental health providers can qualify for up to $30,000 in loan repayment benefits. In exchange, they must complete a 24-month service obligation. The funds can be used to repay federal or private student loans.
Licensed Vocational Nurse
Licensed vocational nurses in good standing with the California Board of Vocational Nursing and Psychiatric Technicians can qualify for up to $8,000. They must commit to working for at least 12 months providing direct patient care in an approved facility. Federal and private students are eligible for repayment assistance.
Steven F. Thompson Physician Corps
Physicians and surgeons can receive up to $105,000 in loan repayment benefits if they work for at least three years in a qualifying facility providing direct patient care. Through the Steven F. Thompson Physician Corps, you can use repayment assistance to pay off federal and private student loans.
Veterinarians
Like many states, California has a shortage of licensed veterinarians, leading to long waits for pet and livestock owners. As a result, the state has a loan repayment program to encourage veterinarians to practice within California.
California Veterinarian Shortage
Qualified veterinarians in California can get up to $25,000 per year (up to a maximum of three years) for student loan repayment by committing to working in high-priority veterinary shortage areas. Under the California Veterinarian Shortage program, veterinarians must care for food or large animals, practice in rural areas or work in public service. This program can be used to repay federal or private student loans.
How to apply for financial aid in California
To apply for California-specific financial aid, follow these steps:
Make a note of deadlines: The federal FAFSA deadline is June 30, but California’s deadlines are much earlier. The FAFSA or California Dream Act Application — and grant verifications — must be submitted by March 2.
Complete a GPA Verification: Work with your school counselor to complete the GPA Verification Form. Email the completed form as a PDF to [email protected].
Create a Web4Grants Account: After processing your FAFSA or California Dream Act Application, you will get an email telling you to create a Web4Grants account. You’ll use this account to upload additional information and view your grants.
Check for other instructions: Some California-specific financial aid opportunities, such as the California Chafee Grant for Foster Youth and the Golden State Teacher Grant, have their own applications and requirements. Review the program’s website through the California Student Aid Commission to see what steps to take for these awards.
Frequently asked questions
Who qualifies for free community college in California?
In California, students can qualify for a waiver of community college enrollment fees if they meet the following requirements:
They are California residents or qualifying undocumented or DACA recipients.
They are full-time students.
They are first-time college students.
Are undocumented or DACA students eligible for financial aid in California?
Under the California Dream Act, undocumented students and DACA recipients are eligible for state financial aid, including state grants and community college waivers. They also qualify for in-state tuition rates at California public universities.
Is the FAFSA required to qualify for California financial aid?
To qualify for California financial aid, you must complete the FAFSA or, if you don’t have a valid Social Security number, the California Dream Act Application.
What is the FAFSA deadline for California?
Although the federal FAFSA deadline for the 2023-2024 academic year is June 30, 2024, California has separate deadlines to keep in mind. Most state financial aid programs had a deadline of March 2, 2023.
Roth IRA’s are for retirement, right? Generally speaking, yes.
But because of their general flexibility, they’ve also come to be an increasingly important way to pay for college. .medrectangle-3-multi-633border:none !important;display:block !important;float:none !important;line-height:0px;margin-bottom:15px !important;margin-left:auto !important;margin-right:auto !important;margin-top:15px !important;max-width:100% !important;min-height:250px;min-width:250px;padding:0;text-align:center !important;
A recent GF¢ reader question prompted me to write this article explaining the ins and outs of using a Roth IRA to pay for college.
Here was the question…
“Jeff, we have an 8 and a 6-year-old and are a little behind in saving for their college education. But the kicker is we’re also a little behind in saving for our own retirement. We know how much you love the Roth IRA so we’re very interested in starting one. A friend of ours had mentioned we could also use the Roth IRA to pay for college? Curious to know your thoughts. Love the blog!!”
Okay, let’s see if we answer the readers question on using a Roth IRA to pay for college. But a first a quick primer on my favorite retirement too, the Roth IRA…
The Basics on Roth IRA’s
Roth IRAs are like traditional IRAs, with a couple of twists. One is that the contributions that you make to the plan are not tax-deductible when made. Another is that funds can be withdrawn from the plan tax-free, as long as you’re at least 59 1/2 years old, and have participated in a Roth plan for at least five years.
Like a traditional IRA, for both 2015 and 2016, the most you can contribute to a Roth IRA is $5,500, or $6,500 if you are 50 or older.
There are income limits in order to be able to participate in the plan. The Roth IRA income limitation for married taxpayers filing a joint return is $183,000 for 2015, and $184,000 for 2016. For all others (other than married filing separate) it’s $116,000 for 2015, and $117,000 for 2016.
There’s no tax deduction on the contributions, but that is more than offset by the fact that withdrawals can be taken on a tax-free basis. That’s the biggest advantage of the plan.
Since a Roth IRA is first and foremost a retirement plan, why should you even consider it for funding a college education?
The Benefits of Using a Roth IRA to Pay for College
Even though the Roth IRA was never intended to fund a college education, it has gradually developed into an important secondary purpose. And there are a lot of smart reasons why this is happening.
Here are a few:
Roth IRAs grow faster than taxable accounts. Investment income accumulates on a tax-deferred basis in a Roth IRA. That means that the investment earnings grow much more quickly in a Roth then they will in a taxable account, such as brokerage account or mutual fund.
Roth IRAs are self-directed accounts. This means that you can invest your account anywhere you like, and in any investments that you prefer.
You can withdraw money any time.This, of course, is a mixed bag. Your contributions can be withdrawn at any time without being subject to tax since there was no tax deduction taken when they were made. The distributions will be pro-rated between your contributions and investment earnings. That means that at least some of the distribution will be taxable if the money is withdrawn prior to your turning 59 1/2, and being invested in the plan for at least five years.
No restrictions on how the money is spent. Dedicated college savings plans, like 529 plans, restrict distributions for educational purposes only. There are no such restrictions on distributions from a Roth IRA. You could use the money to pay for college – or you could use it for retirement – it’s your choice.
No tax penalty for education-related withdrawals. If you withdraw the money before reaching age 59 1/2, you’ll generally have to pay a 10% penalty tax. However, the penalty tax is waived if the funds are used for education.
So far, so good.
The Downsides of Using a Roth IRA to Pay for College
In the interest of balance, I should also disclose that using a Roth IRA to pay for college is not without a few drawbacks.
The distributions will be partially taxable if taken early. There’s good news and bad news here – let’s start with the good news. Since there is no tax deduction for making contributions into a Roth IRA, the portion that is withdrawn that represents the contributions will not be subject to income tax.
Also, the 10% penalty tax for early withdrawals can be waived if the money used to fund a college education. And if you are at least age 59 1/2, and have been participating in your plan for at least five years, the entire distribution – including investment earnings on your contributions – can be withdrawn tax-free. The downside is if you are not 59 1/2, and/or have not been participating in the plan for at least five years, in which case the earnings will be fully taxable, even if the 10% penalty is waived.
Roth distributions can inflate your income. Speaking of distributions, the amount of the withdrawal will be added to your regular income, and must be reported on your FAFSA application. That will increase your income, and could hurt your ability to obtain financial aid and other benefits.
You may not be eligible to start a Roth IRA. Not everyone is eligible to participate in a Roth IRA, as I noted with the income limitations described earlier in this post. Even if you are eligible right now, if you start a Roth IRA for the purpose of funding your children’s education when they are very young, it’s entirely possible that you will exceed the income threshold at some point in the future, at which point you’ll be forced to stop the contributions.
Low contribution limits. As noted at the beginning of this post, your contributions are limited to $5,500 or $6,500 per year. That will probably be inadequate if you’re trying to fund college for multiple children, and especially if there are only a few years left before college begins.
You may be compromising your own retirement. The primary purpose of a Roth IRA is of course retirement, not college funding. If your Roth IRA is a major component of your retirement plan, you may want to seriously consider whether you want to divert money into education, and away from retirement. There are, after all, other ways to finance a college education.
Speaking of which –
Using a 529 Plan Instead
529 plans are specifically designed to fund a college education, and they are generally more effective for that purpose than Roth IRA’s. 529 plans are actually state-sponsored and state-specific, so there will be some limits on how and where you can hold the accounts.
A 529 plan functions much like a retirement plan, and very close to the Roth IRA. Just as is the case with a Roth, the contributions you make to the plan are not tax-deductible, however, the money in the account earns tax-free investment income for federal income tax purposes.
Funds that are later withdrawn for qualified higher education expenses can be taken without being subject income tax. If however funds are withdrawn and used for purposes other than qualified higher education expenses, the distribution will be subject to both federal income tax and the 10% penalty tax. Both the tax and the penalty apply only to investment income in the account, and not to your actual contributions.
One of the biggest advantages of a 529 plan compared to a Roth IRA is that there are no income restrictions limiting your participation in the program.
And the contributions are also a lot more generous. Currently, you can contribute up to $14,000 per year, per taxpayer, per beneficiary. That means that you and your spouse can contribute up to $28,000 to a 529 plan established for each of your children.
You can actually contribute more than this, however, $14,000 is the threshold that triggers the federal gift tax. If you plan to exceed the threshold, you’ll need to consult with your tax advisor as to the best way to proceed, as well as the specific returns that will need to be filed.
So Should You Use a Roth IRA to Pay for College?
In a perfect world, you have a 529 plan set up for each of your children, that would represent the foundation of your education planning. But if you can’t afford to do that, and you still want to make at least loose plans to fund their education in advance, a Roth IRA is an excellent way to go.
If you are in a position to do so, having both a 529 – as the base plan – supplemented by a Roth IRA, is solid financial planning. The Roth IRA can be set up primarily for retirement, but still be available as a secondary source of college education funding, should it be necessary.
If you do elect to use the Roth IRA for college savings, please don’t make the mistake of saving more for your kids and not enough for your retirement.
Whatever you choose to do, make sure you discuss all of the details and ramifications with your tax advisor. Since everyone’s financial lives and tax situations are different, you need to know if either or both plans will be a good fit for your family.
Save more, spend smarter, and make your money go further
Most of us have heard it before — newly released data on the net worth of CEOs well into the millions, or even billions.
Take Jeff Bezos for example, whose net worth is estimated to be roughly $144 billion as of October 2022. As you may suspect, that’s certainly not representative of most Americans’ wealth. In fact, the average net worth by age in the United States is $746,820, though many argue that median net worth by age — which is $121,760 — paints a more useful picture.
So what is net worth? Net worth is a calculation used to gauge your overall financial health, but it’s a benchmark that tends to uncover more questions than answers. What does net worth mean, what factors determine its value, and what is a “good” net worth by age, anyway?
Here, we’ll unpack the average net worth by age in America, learn how to calculate your net worth, and reveal how to increase net worth so that you can set — and achieve — your personal finance goals.
Key Findings
The average net worth by age in America is $746,820.
The median net worth by age in America is $121,760.
Net worth is calculated by subtracting the total value of your debts from the total value of your assets.
Average Net Worth by Age
Age
Average Net Worth (Mean)
Younger than 35
$76,340
35–44
$437,770
45–54
$833,790
55–64
$1,176,520
65–74
$1,215,920
75 or Older
$958,450
Source: Federal Reserve
The average net worth by age in America is $746,820, according to the Federal Reserve’s 2020 Survey of Consumer Finances, which includes data from 2016 to 2019.
It may come as no surprise to learn that older Americans tend to have a greater average net worth than younger Americans. After all, their financial assets have had years — if not decades — to appreciate in value. Average net worth by age peaks somewhere between 65 and 74 years. This is also roughly the age when most Americans retire. At age 75 and older, when sources of income tend to be fixed, average net worth begins to decrease.
Median Net Worth By Age
Age
Median Net Worth
Younger than 35
$14,000
35–44
$91,110
45–54
$168,800
55–64
$213,150
65–74
$266,070
75 or Older
$254,900
Source: Federal Reserve
The median net worth by age in America is $121,760, approximately a 17 percent increase from the previous survey conducted in 2016. The median — or middle number in a set of data — is the halfway point between the largest and smallest net worth.
Median values tend to be less affected by outlier data points — like the net worth of billionaires — than averages. For that reason, some argue that median net worth offers a clearer picture of and benchmark for wealth in America.
What Does Net Worth Mean?
What is net worth, and what does it mean? Your net worth is your total assets minus your liabilities. In simple terms, it’s the cost of everything you own after subtracting your debts.
It can be dangerous to measure your financial health solely by what you earn, especially since you might not save or use your income towards investments. Your net worth will keep you in check, allowing you to be cognizant of your worth and how much you should be saving until you reach retirement.
What Net Worth is Considered “Rich?”
You may wonder what net worth qualifies as “wealthy” in America — and how far off you are. According to a 2022 survey, Americans consider an average net worth of $2.2 million to be “wealthy.” However, perception of wealth may look very different at the state and city levels, as average household income and cost of living tend to fluctuate dramatically based on geographic location.
For example, people who live in Denver say that an average net worth of $2.2 million is enough to be considered wealthy, whereas people in San Francisco say that you’d need more than double that amount —- an average net worth of $5.1 million.
How to Calculate Net Worth
1. Add Up Your Assets
The first step to calculating your net worth is adding up the total value of your assets. This includes the current market value of your investment accounts, retirement savings, home(s), vehicle(s), items of significant value (art, jewelry, furniture, etc.), and the cash value of your checking, savings accounts, and insurance policies.
2. Add Up Your Debts
Next, you’ll want to add up the total value of any debts you owe. This includes your mortgage(s), car loan(s), student loans, personal loans, credit card debt, and any other form of debt.
3. Subtract Your Debts From Your Assets
Once you subtract your debts from your assets, the resulting value is considered your personal net worth. Your total could result in a positive net worth or a negative net worth.
Don’t panic if you find yourself in the negative net worth category. It’s normal for young professionals fresh out of high school or college to have low or negative net worth, especially if they’re still paying down student loans, recently purchased a home, or are just starting a plan to build their savings.
What is a “Good” Net Worth By Age?
Your age plays a significant role in calculating your net worth, especially as you get closer to retirement age. To help you understand how you stack up, we took a look at the average and median net worth of every age group to reveal what you should aim for at each milestone.
Average Net Worth by Age 35
Your 30s should be mostly devoted to laying your financial foundation so that you can achieve your desired net worth by retirement. At this age, it’s important to set a budget for you and your family, and stick to it.
The Benchmark
The average net worth for families in the U.S. under the age of 35 is $76,340, where the median net worth is $14,000; a helpful reminder that the average can be easily distorted by a small percentage of the wealthiest Americans. With the average student loan debt at about $35,000 per person, it’s no wonder why people might have a lower net worth in their 30s.
How to Increase Net Worth
Your 30s are a perfect time to set yourself up for a bright financial future — even if your net worth is still relatively low. If you haven’t started already, consider contributing to your retirement at this point, especially if your employer offers a company match to your 401(k) or 403(b).
A goal to aim for is to have the equivalent of half your annual salary saved in your retirement account by the time you’re 30, but don’t worry if you’re not there yet. At this time in your life, it’s most common to focus on making progress on paying back your debt, which can lead you towards financial security.
Average Net Worth by Age 45
The Benchmark
The average net worth for American families ages 35 to 44 is $437,770, and the median net worth is $91,110. This demonstrates a natural progression as Americans begin to spend time in their careers, making higher salaries than those they earned fresh out of high school or college. They’ve had ten years at that point to pay down some debt, and perhaps save for the purchase of a first home.
How to Increase Net Worth
By the time that you’re in your 40s, your goal is to have a net worth of two times your annual salary. For example, if your salary is $75,000 in your 30s, you should aim to have a net worth of $150,000 by the time you’re 40 years old.
It’s common for people in their 40s to increase their net worth by investing in real estate and continuing to grow their retirement savings. Owning a home is an asset that could greatly increase your net worth since it can appreciate over time.
Average Net Worth by Age 55
By your 50s, you should begin to see significant progress made toward your net worth based on real estate investments, contributions to your retirement plan, and other investments. By the time you’re 50, your goal should be a net worth of four times your annual salary. For example, if you’re currently making $90,000 per year, your net worth should be at $360,000.
The Benchmark
The average net worth for Americans between the ages of 45 and 54 is $833,790, while the median net worth is $168,800.
How to Increase Net Worth
At this point, consider becoming more aggressive when it comes to building your net worth. To do this, consider maxing out your 401(k), meaning that you contribute as much as is legally allowed. And, if you haven’t already, this may be a good time to contribute to an IRA, an account that allows you to save for retirement with tax-free growth or on a tax-deferred basis.
If you have children, you may also want to consider contributing to a 529 college savings plan, a tax-advantaged savings plan for education costs, but make sure to prioritize your retirement first.
Average Net Worth by Age 65
In your 60s, your goal is to have a net worth of roughly six times your salary. For example, if your salary is $120,000, you should aim to have a net worth of $720,000. At this point in your life, your net worth will help you understand how much wealth you’ll have once it’s time to retire — and how early you can.
The Benchmark
The average net worth for Americans between the ages of 55 and 64 is $1,176,520, while the median net worth is $213,150, according to the most recent data from the Federal Reserve.
How to Increase Net Worth
To help you reach your goals, you may want to begin thinking about how you can lower your cost of living and capitalize on your investments. If you live in a house, but no longer need all of the space, could you consider downsizing? No need to make any immediate decisions, but with retirement only a few years away, you’ll want to begin looking at how you are going to benefit from your investments.
You’ll also want to consider purchasing disability insurance dependent on your health and genetics. If you’re unable to work during these final years leading up to retirement, disability insurance can help replace the income that you lost without decreasing your net worth.
Average Net Worth by Retirement
By the time you’re ready to retire, you should aim to have a net worth of roughly six times your annual salary.
While it’s impossible to know exactly how many years following retirement you’ll need to plan for, it’s one of the many reasons it’s so important to start saving as early as possible. It can even lead to some deferring retirement and working beyond the normal retirement age.
The Benchmark
The average net worth for Americans between the ages of 65 and 74 is $1,215,920, however, the median net worth is $266,070.
Use the resources that you built throughout your life to fund retirement. You’ll also want to consider what age you want to start receiving your Social Security since the longer you delay it, the more your monthly income will be.
How to Increase Net Worth
From investments to saving, there are many ways to increase your net worth. Once you calculate your current net worth, use these general tips to help set you up for success by the time you retire:
Cut Expenses: The less that you’re spending, the more that you’re growing your net worth. See if there are bills or spending habits that you can reduce. Even if it’s only a few dollars, you’d be surprised by how much that can add to your net worth over the years.
Reduce Debt: Your debt is what could be holding you back from growing your wealth, and with high interest rates, it could be taking longer than expected. Making higher monthly payments or consolidating payments could help reduce your debt faster.
Pay Off Your Mortgage: Owning a home can become your biggest asset, so paying it off will help increase your net worth.
Make Investments. It may not be ideal to just let your money sit in savings. Consider investing part of your paycheck with a goal to reap the benefits when you reach retirement age.
Max Out Retirement Contributions: Make the most of tax-advantaged retirement plans even in your lower-earning years. If you start investing now, your net worth may increase at a much faster pace.
Set Goals: It may sound simple, but it’s easy to become passive about investing in the future if you don’t have hard goals set in place. Create a plan as to how you’re going to grow your net worth over the next 10, 20, or even 30 years — and stick to it.
Once you make a plan to build your net worth, check in with yourself and calculate how you’re pacing against your goals on a regular basis. And, before making a big purchase or an investment, keep this number in mind to make sure you’re making the right financial move.
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It’s a common refrain that today’s college graduates are entering into the worst job market and economy since Hoover was around. We’re told that an undergraduate degree means less than what a high school diploma once was, yet we’re investing more in school than ever before. Post college debt is a major emotional weight on the backs of this newest generation, and colleges encourage debt with ease â don’t worry about it; you don’t have to pay it off until after you’ve graduated and have a well-paying job.
We’re sold on it and it’s a hard sell, not only by schools, but by the banks’ ad dollars, as well. Previous generations didn’t start life with so much debt, and in the middle of a job-killing recession no less. You probably aren’t going to pay off that kind of debt waiting tables. Realize that college debt most likely means postponing life goals such as mortgage, car, marriage, and maybe even children.
Good-to-know facts about college debt
How big of a problem is the cost of college? Consider the following: </
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