I Call BS On Needing $1 Million To Retire (And Other Bad Retirement ‘Rules’)

Ann Brenoff’s “On The Fly” is a column about navigating growing older ― and a few other things.

The big question people always ask when it comes to retirement is “How much money do I need to save to retire comfortably?” And the big answer ― $1 million ― sends many of us into a head-first tailspin.

But before you say, “I’ll take that cat food in bulk, please,” consider this:

A lot of what you hear in the way of retirement advice is 50 shades of wrong. And yes, I’d include the idea that you need to save $1 million in that. It’s time to rethink some popular “truths” about retirement. (No, this does not give you permission to stop saving!)

1. The ‘you need $1 million’ advice was really never applicable across the board.

When the financial planning and money experts said that $1 million was the magic amount you needed to have for a comfortable retirement, they didn’t actually mean everyone of all ages. It really only applied to people who were currently at or near retirement age. If your retirement were decades out, you actually would need more money. So raise the bar on your impossible dream.

Blame inflation for this one falling apart.

Here’s the math, as Mark Avallone, president of Potomac Wealth Advisors and author of Countdown to Financial Freedom, told CNBC last year: A 67-year-old baby boomer who retires today with $1 million can generate an annual income stream of $40,000, which assumes a withdrawal rate of 4 percent.


But Gen-Xer who is 42 and retires with $1 million in the bank when he is 67 will wind up with just $19,000 a year after inflation-ravaged his savings. And 32-year-old millennial planning to retire at 67 with $1 million in savings will actually be below the poverty line.

Yep, million-dollar poverty. That universally applied “you need $1 million to retire” advice wasn’t ever a one-size-fits-all.

2. Plus, it ignored the elephant in the room.

That $1 million target also has a fatal flaw: Those projected annual incomes from your investments are actually pretty fluid, not set in stone and certainly not guaranteed.

What you earn from investing that $1 million ― or any amount ― will depend on the direction the markets take. If the markets crash, your $1 million portfolios can swiftly shrink to $500,000. Think it couldn’t happen? The Dow hit its pre-recession high on Oct. 9, 2007, when it closed at 14,164.43. Less than 18 months later, it had dropped more than 50 percent to 6,594.44 on March 5, 2009. Big Ouch.

3. Most retirement advice is premised on the 4-percent rule, which is flawed at best.

This rule was introduced by William Bengen, a financial planner who believed that retirees could deduct 4 percent from their investment portfolio every year and not run out of money for at least 30 years. To do this, he said, retirees needed a financial portfolio balanced with 60 percent in stocks and 40 percent in bonds and a commitment to just withdraw 4 percent a year (adjusted for inflation.)

This is a case of the devil living in the details.

The 4-percent rule is conditioned on the idea that all our portfolios will be a precise 60/40 mix, which doesn’t take into account an individual’s tolerance for risk. That’s a big deal and a huge omission. How much of a gambler are you with your retirement savings?

If you are risk-averse, as many close to retirement are, you may prefer to put 80 percent of your investments in bonds, which are considered safer but deliver less of a financial bang. If your risk tolerance is such that your finances are split differently than 60/40, it messes up the 4-percent rule.

4. ‘The multiply by 25’ rule is equally imperfect.

The “multiply by 25” rule and the 4-percent rule are often confused with one another, but they have very different purposes. The 4-percent rule estimates how much you can withdraw without going broke. The “multiply by 25” rule tells you how much you need to save based on how much you hope to spend.


The “multiply by 25” rule says to multiply your desired annual income in retirement by 25. So if you want to have a yearly salary of $50,000 per year, you would need to have $1.25 million saved. To withdraw $60,000 per year, you need $1.5 million.

This calculation is imperfect for several reasons, chief among them that it doesn’t take into account the other sources of retirement income you may get ― most notably, Social Security, private pensions, or income from other sources such as rental properties or part-time jobs. All of those things should be factored in before you determine how much income you need your savings to contribute.

But it also doesn’t answer a much larger and looming question: How the heck is someone in their 20s or 30s supposed to know how much they will need to live 50 years in the future? How can they guess accurately what financial events lie ahead? Will they inherit money or wind up spending their own savings on caregiving for a parent? Will they have bought a home and paid it off or still be shelling out rent? Will they need to help their adult children pay off student loans?

You might as well ask the Magic 8 ball.

5. A lot of retirement advice should come with an expiration date.

That 4-percent rule was developed during the mid-1990s when bond interest rates were higher than what they are now. Too bad that bonds don’t see the same sort of growth today that they did years ago. Interest rates that have been low for a long time have made bonds and CDs less attractive when compared to equity returns.

So why are we still basing a retirement plan on the idea that 40 percent of our investments should be held in bonds?


And here’s another dated retirement premise: The 4-percent rule is designed to stretch your retirement savings to last for 30 years. But some of us may not need 30 years of retirement income; we may need less or more. Many people are now working past traditional retirement age. And while longer life expectancies have altered the picture, it is still just 78.7 years in the U.S.


The Pew Research Center analyzed data from the Bureau of Labor Statistics, and it found that during the first half of 2017, 19 percent of 70- to 74-year-olds were still employed. That’s roughly 8 percent more than there were in the mid-1990s when the 4-percent rule was first introduced. And while optimism is a beautiful and wondrous thing, only 10 percent of people who are 65 today will live past 95, according to projections from the Social Security Administration, which raises the question of why we all need to plan for a 30-year retirement. Most of those “oldest of the old” will be women, who as a demographic have lower earnings and less money saved than men, but higher life expectancies.

But still, why are we encouraged to prepare for retirement’s nuclear option when, for most of us, it won’t be necessary?

6. The $1,000-a-month rule is either the cherry on your cake or pie in the sky.

This rule of thumb says that for every $1,000 per month you want to have in retirement, you need to have $240,000 (some say $250,000) saved.

What really might be useful, of course, is to tie this advice to a little guidance on how to do it, since clearly, we are failing the savings test. (Make that guidance coupled with public policy.)

Around half of all U.S. households have no retirement accounts at all, says the Government Accountability Office. Not a pension, not a 401(k) or an IRA. And that’s not just young people who plan to enjoy themselves now and worry about it later. The GAO says almost 30 percent of households headed up by someone age 55 and older have nothing saved for retirement.

And yes, that’s scary.

According to the just-released 2018 report from the nonprofit Transamerica Center for Retirement Studies, we are all pretty worried about having enough money to retire, with Gen-X worried the most. Only 55 percent of Generation X workers reported being “somewhat or very confident” that they will be able to fully retire, compared to 67 percent of millennial workers and 62 percent of baby boomers.

So, to summarize why our retirement rules may not exactly lead to the advertising image of a hand-holding stroll down the beach: Nobody can really say how much money you need to retire. Nobody knows how long you will need that money to last, what lifestyle adjustments you are willing to make when you retire, or what unexpected expenses may upset your best-laid plans.


The best answer may be this: Own your retirement instead of letting it own you.
Save as much as you can and remember that what really counts isn’t just the goal of retirement but the journey to get there. When the music stops, what you have is what you have, and you will adjust your lifestyle to that. You got this.

Read more: http://www.huffingtonpost.com/entry/1-million-to-retire_us_5b33ce37e4b0cb56051e850d

The working poor with the wrong degree!

Most of us do not understand the challenges with taking out student loans.    She could make more by using her skills learned while she was earning her doctorate.  Doctors know how to write well.  A job is not a solution for repaying back a student loan.  Teachers know how to teach and create course lesson plans.  So read the rest of this post and then click the link at the bottom of the blog post to see an alternative way to getting out of student loan debt.  You need side income that is passive.  Write a book.  Teach an online course.  Do extra and pay more than the minimum.  Can’t Wait – Click Here!

Know Before Going into Debt

Broken-piggy-bankStudent loans have an obvious benefit: if money is short, student loans allow you to go to school and get the degree you need to advance your career. But risks also come with taking a student loan, some obvious, some less obvious.

The most obvious risk is that you won’t finish the degree program for which you are taking the loan, and you then end up leaving the school without anything to show for except some uncomfortably large debts.

Another risk, equally obvious, is that you take the loan, finish the degree program, but then have a degree that’s not marketable, that doesn’t get you the job you want and doesn’t increase your pay enough to offset the debt you are now having to pay off.

The way to minimize both these risks is to do your homework before enrolling in a degree program, making sure that students attending the program have a good rate of success in actually finishing it, and additionally making sure that students who finish it have good job prospects upon completion.

Find scholarships for online students, click here.

Need to refinance a loan? Here are 10 great options!

Schools vary enormously in the tuitions they charge (compare our cost index, which shows that colleges and universities can charge anywhere from $1,400 to $51,000 for tuition and fees for full-time students for the year—and everything in between!).

Note that these amounts don’t include housing, food, transportation, and other living expenses. Thus your student loans may also have to cover living expenses if being a full-time student prevents you from holding the type of job that would ordinarily allow you to cover them.

Consequently, if student debt could be a problem for you, it’s safest to choose a school that has low tuition costs and allows you to live in an area where the cost of living is low.

Less obvious risks also come with taking a student loan. There’s an old proverb that says “the debtor is slave to the lender.” Debt can turn you into a slave to the banks that provide your student loan. Many students who take out educational loans are young and have never had any major debt. Taking a student loan changes all that, removing a sizable chunk from your paycheck each month once you have to start paying off the loan.

The average student loan, across all ages in the United States, is now (in 2014) about $25,000 and that number is rising. The average student loan for American students who graduated in 2013 is over $35,000 (ref). That’s not quite a home mortgage, but it’s a sizable debt nonetheless.

Another less obvious risk that you face in taking out a student loan goes by the fancy sounding word “non-dischargeable.” Let’s say you are overwhelmed by debt. One way out of it is to declare personal bankruptcy, which cancels your debts. But a non-dischargeable debt is one that you can never get rid of, not by declaring bankruptcy, not by doing anything except paying it off or dropping dead (literally).

The fine print on student loans commits you to paying off the loan regardless of the hardships you may face in life. Student loans are non-dischargeable. You cannot get rid of these debts. They will follow you for the rest of your life until you pay them off.

It’s worth stepping back and asking why student loans have become such a big issue and problem for students. Believe it or not, back in the 1960s, it was not uncommon for students to work over the summer and earn enough to cover a substantial portion of their school expenses during the year.

All that changed with the Higher Education Act of 1965 (reauthorized many times since). By allowing students to take out big loans, schools were incentivized to raise their tuitions (after all, students could now pay for the increase). This led to a vicious circle, in which schools kept raising their prices and the government kept raising the amount of money it would loan to students.

This is why inflation in the cost of higher education runs at twice the rate of inflation for ordinary consumer products. The following diagram illustrates this point:


Note that even housing and medical costs, which are subject to high inflation, still do not rise nearly as much as the cost of higher education.

If one is inclined to cynicism, one might think that student loans are a racket in which the Federal government, in collusion with colleges and universities, has arranged to increase the profits of schools at students’ expense. While we at TheBestSchools.org doubt that there is a real conspiracy here, the effect, however, is substantially the same.

Schools keep raising their tuitions and fees. The government keeps raising the amount it is willing to loan to students. And the average debt of students keeps mushrooming, with total student debt in the United States now hitting $1.2 trillion. As Forbes puts it, this level of debt is crippling students, their parents, and the economy.

Bottom line: You want to think very carefully about taking out a student loan. Make sure that the expected return on the education and degree that the loan is supposed to secure is big enough. It needs not only to cover the debt but also to substantially improve your career and life. In taking a student loan, you are buying an education. Make sure you are getting a good deal.


There are alternative choices: More to come abot this.


5 Reasons Why Alexandria Ocasio-Cortez Stands Out


Progressive political newcomer Alexandria Ocasio-Cortez trounced Rep. Joe Crowley (D-N.Y.) in the biggest primary upset of 2018, and it seems like her compelling story has resonated with many voters.


The 28-year-old Bronx native is fresh to the political scene. She doesn’t come from money or influence. She barely received any media coverage throughout her campaign.

Here are some of the ways in which Ocasio-Cortez is so remarkable:

If She Wins, She Will Be The Youngest Woman Elected To Congress

“Congress is too old, they don’t have a stake in the game,” she told Elite Daily. If the 28-year-old is elected to the House of Representatives, as is widely expected, she will be 29 when the new Congress starts.


While she worked for the late Sen. Ted Kennedy (D-Mass.) and on Sen. Bernie Sanders’ (I-Vt.) presidential campaign, she didn’t have any political ambitions of her own until a few years ago. But she was motivated by a need to more accurately represent the district she comes from. “Our district is overwhelmingly people of color, it’s working class, it’s very immigrant ― and it hasn’t had the representation we’ve needed,” she told HuffPost earlier this month.

She Bartended To Make Ends Meet Until Recently

Ocasio-Cortez worked as a waitress and bartender in Manhattan up until recently to help keep her family financially afloat after her father died and her mom had to go back to work cleaning houses and driving a bus. Her mother had to leave the Bronx and move to Florida because she could no longer afford living there, she told Vogue.

She’s Still Paying Off Student Loans

“Oh heck yes,” Ocasio-Cortez told Elite Daily when asked about loans. “I’m definitely still paying these off.” She campaigned on canceling all student debt and offering free tuition.

She Refused To Accept Corporate Money

Out of the more than $300,000 Ocasio-Cortez raised throughout her campaign (compared to Crowley’s $3 million), only about $5,000 came from PACs and about two-thirds were made up of small, under-$200 contributions, according to OpenSecrets.

“By not taking money from lobbyists, by taking money from working-class people, we can legislate for working-class people,” she told CBS News.

She was up against massive corporations who donated to Crowley, including Facebook and Google.

She’s A Dues-Paying Member Of The Democratic Socialists of America

And Ocasio-Cortez is trying to undo the stigma surrounding the term “socialist.”

“It’s really scary or it’s easy to generate fear around an idea or around an -ism when you don’t provide any substance to it,” she told New York Magazine’s “The Cut” this week. “I believe that every American should have stable, dignified housing; health care; education — that the most very basic needs to sustain modern life should be guaranteed in a moral society. You can call that whatever you want to call that.”

Read more: http://www.huffingtonpost.com/entry/alexandria-ocasio-cortez-things-to-know_us_5b334b41e4b0cb56051d6081

Why The American Dream No Longer Includes Home Ownership

home real estate
Photo by Binyamin Mellish on Pexels.com


Before Karyn Chylewski and her husband got married, they spent several adventurous years together traveling and sharing new experiences. Once the Gen-Xers tied the knot, buying a house seemed like the obvious next step.


“We took a swing at the old American Dream,” she said. “It was super exciting at first … it was 2005, and there was such a buzz in the air around real estate.”

So the Chylewskis put their savings toward a down payment on a townhome in the suburbs of Chicago.

The Dream Becomes A Nightmare

Unfortunately, Chylewski’s husband lost his job in the wake of the 2008 recession. The job market in Illinois was looking bleak, so they were forced to look out of state for work. And in a fortunate turn of events, he was offered a position in California. The only problem? The townhouse was anchoring them in place.


The home had lost half its value. At that point, Chylewski’s husband was facing the grim reality that he might not be able to take that job because they couldn’t sell the house for what they needed. “I felt handcuffed,” said Chylewski.


Eventually, they were able to rid themselves of the property in a short sale, which meant they lost thousands of dollars and their credit took a hit.


“We’re not the two and a half kids, white picket fence type of people,” said Chylewski. “But we kind of got sucked into it at that time … it turned into a horrible nightmare.”

Bucking The Trend

The Chylewskis’ story was all too common during the Great Recession. Americans had been fed the idea that home ownership was the only way to truly “make it,” and they ended up losing their life savings.


“The dream of home ownership was something that came after World War II, when everyone came back and they built all these houses,” explained Brian Face, a fee-only financial planner and owner of Face2Face Financial Planning. Homes came to represent personal success and security, an ideal Face said real estate and mortgage agents perpetuated.


“It’s good for the economy to buy houses, but that doesn’t mean it’s actually good for the person that buys it,” Face said.


Millennials, whose formative years took place during the Great Recession, have been quick to question that ideal.


Javier Gutierrez, a 26-year-old renter in Austin, Texas, and a blogger at Dreamer Money, graduated from college with $15,000 in student loans. His wife also had a $19,000 car loan. “The last thing we wanted to do was to become more indebted,” he said.

“We decided to strictly focus on paying off our debt, and renting really helped us out,” Gutierrez said.


And they’re not the only ones. According to a survey by the National Association of Realtors, a whopping 83 percent of millennials ages 22-35 have delayed home ownership because of burdensome student loans, which have reached an unprecedented $1.5 trillion collectively.


Further, a study by the Pew Research Center that examined Census Bureau housing data found that today, more U.S. households are renting than at any point in the last 50 years.

Clearly, the world has changed. But young adults aren’t just renting because they can’t buy ― they’re choosing to rent because it affords them better personal and financial opportunities.

Why Renting Often Makes More Sense

There are no taxes, interest or maintenance costs.


When comparing renting versus buying, it’s important to look at the whole picture, said Face. You have to consider not only the mortgage payment but the added costs of property taxes, home insurance, HOA fees and ongoing maintenance that would otherwise be covered by your landlord.


“Personally, I just had $2,800 in damage to my roof,” said Face. “They told me I might need a new roof in a couple of years. Well, that’s about $15,000. How many people who are 30 years old can pay $15,000?”


It’s easier to pay off debt.


For renters who are saddled with student loans and other types of debt, it doesn’t make sense to tack on a mortgage, even if they can afford it.  Gutierrez credits renting with saving him those additional home costs that he put toward aggressively paying down debt instead. “We paid off my student loans in about 17 months,” he said. “Five months later, the car was paid off.”


Renting doesn’t tie you down.


Today, the average person changes jobs 12 times over a career. “I am in awe of [Millennials’] mobility and flexibility,” said Amy Irvine, a certified financial planner and owner of Irvine Wealth Planning Strategies. “And home ownership doesn’t allow for that,” she said.


For instance, if you live in New York and have the opportunity to take a job in Seattle that pays 20 percent more, owning a home could be a roadblock.


Plus, more employers are hiring remote workers, giving employees the ability to work from anywhere in the world. In fact, 43 percent of Americans work remotely at least some of the time, according to a Gallup report. “They’re hopping around, living in different states just to explore ― and you just can’t do that with home ownership.”

The stock market can offer better returns than homeownership.


A longstanding belief is that your home is an investment because it increases in value over time. But what if, rather than making payments toward equity in your home, you put that money in the stock market?


“We typically see values of houses increasing at 2 to 3 percent [per year], on average,” said Irvine. “If you average out what just an S&P stock fund equates to over a 10 or 15 year period, you’ve got almost double that in returns,” she said. Irvine noted that you do have to pay taxes for capital gains on those investments, but it still turns out to be more lucrative.


When renting, your assets stay liquid.


Another problem with tying up your wealth in a piece of property is that you can’t access the money if you need it right away. For instance, said Irvine, what do you do if you lose your job? With a mortgage, you can’t cut costs by relocating to a cheaper apartment or moving in with a roommate. “That’s the thing about real estate,” said Face. “It’s as liquid as there is someone to buy it. You could probably sell it tomorrow, but it wouldn’t be for a reasonable price.”


There are fewer tax incentives to buy these days.

“Most people aren’t going to get a deduction for their mortgage interest anymore,” said Face. That’s because the latest tax reform bill raised the standard deduction from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married couples filing jointly. “You only take a deduction on your mortgage if it’s more than your standard deduction,” he explained.

So if you’re married, it’s going to be tough to claim over $24,000 in itemizations unless you live in a high-value real estate market. Even then, the new tax bill lowered the cap from mortgages of up to $1,000,000 down to $750,000. It also capped property taxes at $10,000.

Our values have changed.


Financial considerations aside, we’re simply living different lives. Just as we no longer work for the same company for 40 years and retire with a pension, we’re not buying homes like we used to. And that’s OK.

“Our generation is more about experiences,” said Face. Many millennials would rather have the freedom of renting than a piece of property they can barely afford.

The bottom line is you have to give up something in order to be a homeowner, Face said, whether that’s traveling or saving money in a retirement account. Many young adults today are choosing not to make that sacrifice in the name of homeownership.

Should Owning Be Off The Table?

As with everything in personal finance, there’s no one-size-fits-all answer to the question of whether renting or buying is better. Just be sure that whichever you choose, it’s for the right reasons.


And instead of believing you somehow failed because you don’t own a home, Face recommended thinking about it in a different way. “You have other priorities that are more important to you,” he said. “Don’t worry about what everybody else thinks.”

When it comes to homeownership, remember, “It’s not a golden ticket to living happily ever after,” said Chylewski.

Read more: http://www.huffingtonpost.com/entry/american-dream-home-ownership_us_5b2c5736e4b00295f15ae32a

There are frustrating reasons LGBTQ students are more in debt than their peers.

Photo by Mladen Antonov/AFP/Getty Images.

From legalizing marriage equality to advocating for society to better understand the fluidity of gender and sexuality, activists have made incredible strides for queer and trans rights and success in the U.S.

But there’s a group of LGBTQ individuals that are struggling, and it’s clear that changes need to be made.

LGBTQ college graduates have, on average, $16,000 more in student loan debt than the general population, according to Student Loan Hero.

Through a survey, they found that 60% of LGBTQ students regret taking out student loans, and more than a quarter of respondents feel that their debt is not manageable. Queer students face an uphill battle against student loan debt, falling even further in the debt hole than their peers.

So, why is this happening?

Miranda Marquit, the report’s lead author, says there’s a chance that a lack of strong familial support may be behind it.

“Only 39% [of those surveyed] feel completely accepted by their families,” Marquit writes in an email to Upworthy. “Some of these borrowers might not receive the same level of support that other students receive, including the ability to live at home (33% report being kicked out) or direct financial support, leaving [them] with little option but to borrow more.”

Photo by Scott Eisen/Getty Images.

In addition to lacking family support and housing, Marquit found that many borrowers often feel the need to “prove themselves” at more prestigious — and often more expensive — schools.

“Anecdotal evidence from people we’ve talked to indicates that there is some added pressure to show that they are super-successful and can ‘make it’ at more prestigious schools, which can also lead to higher debt,” Marquit writes.

Photo by Andrew Caballero-Reynolds/AFP/Getty Images.

LGBTQ students also face discrimination when applying for more affordable loans and jobs, leading to long-term debt challenges.

Queer financial expert John Schneider corroborates Marquit’s findings, adding via email that “many respondents to the survey said they’ve been discriminated against when applying for loans because they’re LGBTQ. Consequently, these students may have assumed loans with less ideal, less competitive terms.”

Discrimination against marginalized groups is nothing new in this country.

Landlords frequently refused to give black Americans home loans before the Fair Housing Act in 1968, limiting black mobility and financial well-being; banks have discriminated against black and Latinx homebuyers for decades, and Asian business owners have reported discrimination in regards to health inspections for years.

The reality is that discrimination has had a persistent, pervasive impact on marginalized groups. And its effects go beyond student debt.

LGBTQ borrowers are 53% more likely than the general population to make under $50,000 per year, and less than half reported having a retirement savings account, according to the report. With limited financial stability, not only are LGBTQ graduates in debt, they’re struggling just to make a dent in it.

A lot of this, according to Schneider, has to do with how we treat LGBTQ people in the first place. “We need to start truly valuing LGBTQ people and people of all diversity and backgrounds,” Schneider writes. “Kicking your son or daughter out of your home or making them run away for their safety makes you an unfit parent, and society should hold you accountable. Not treating someone equal because they’re LGBTQ, black, female, etc., makes you unfit for your job, and your company should let you go.”

Photo by Mark Ralston/AFP/Getty Images.

While the statistics are frustrating, Marquit and Schneider believe that there’s room for progress.

Marquit points out that schools could more effectively focus on better student loan education efforts to inform LGBTQ and non-LGBTQ students alike of debt realities.

Schneider says to make sure that Pride isn’t just reflected on a banner but also in hiring and financial practices.

“Depending on your LGBTQ status, we can still be denied housing, employment, and services in 28-30 states in this country,” Schneider writes. “So, while we appreciate the Fortune 500 companies attending and sponsoring Pride this month and putting rainbows in the logos for June, how about they push for the equality of their employees, past, present, and future, in those 28–30 states for the next 11 months?”

Our LGBTQ students deserve more, and our schools, financial institutions, and the general public can help ensure they have the financial health they deserve.

Read more: http://www.upworthy.com/there-are-frustrating-reasons-lgbtq-students-are-more-in-debt-than-their-peers

There’s a reason why you can’t afford to live in America

In this extract of her new book, Guardian columnist Alissa Quart explains how the middle class faces a uniquely American predicament: being squeezed economically and psychologically


Michelle Belmont’s debt haunted her. It was almost unspeakable, but it was a raw relief when anyone asked her about it. She wanted people to hear about her life as she lived it, how her debt trailed her like a child’s monster, how it was there when she went to the supermarket, to her son’s daycare, and home to her one-bedroom apartment.

It began, as it often does, with the student loans for the college her parents back home in Georgia thought would ensure the right future. Then there was the money she borrowed for her masters of library science degree. A bit later, when baby Eamon came along, she and her husband owed over $20,000 in hospital bills as well. What was shocking were the price tags, just for normal things, like Michelle’s labor and her overnight stay.

She had required a few days extra at the hospital: Eamon had been born weighing 10lb 13oz, and she had pushed that hefty creature for five hours.

I thought that insurance helps you get by, Michelle told me. But my husband had a really cheap insurance, and you get what you pay for.

Then the debt shadow monster just grew. Eamon developed a fever of 103F (39C) and had to go back to the hospital.

There were two years of surgeries. The bills piled up on the kitchen table. Michelle tried to pay them off, for fear of getting refused treatment later, but then she stopped opening the envelopes. They demanded payment now or legal action, in screaming capital letters. Her debt was six figures and growing.

The couple had struggled before they had their baby, Michelle said, but then it got astronomically insane after Eamon was born. We always had money for food before, but now its, How are we going to eat? I’ll borrow from one credit card bill to pay that other credit card bill. I cant find rent money each paycheck, and we make a decent salary between us.

Michelle Belmont was fighting to stay middle class. She hoped to train herself to become a technological librarian, to set up her future. But the costs were beyond what she ever imagined, and she grew more vulnerable. Meanwhile, the squeeze tightened. The Belmonts lived in a modest one-bedroom apartment in Minneapolis that cost $1,300 per month to rent. Minneapolis, with its supposed hipster status and so-called Midwest Modern food and furniture and textiles, was only getting more expensive for Michelle.

It seemed unlikely that the Belmonts would ever be free of debt.

That requires nothing bad to happen, Michelle said, almost laughing.

But bad things do happen.

When I first spoke to Michelle, her concerns were not abstract to me. Back then, I had recently given birth to my daughter. And it wasn’t until I had my own child that I quickly realized that I too had entered the falling middle-class vortex. My girl was born face-first sunny-side up, as they say, her unblinking stare promising new joy and terror. Her cries soon became the soundtrack of the anti-romantic comedy of our lives. My husband and I wound up with an unexpected $1,500 bill after her birth that we hustled to pay; most Americans owe, even more, an average of around $5,000.

Although we managed to avoid true financial peril partly because of the wonder of having a New York City rent-stabilized apartment we did go through a few years of fiscal vertigo. We had been freelance writers for most of our careers, but by the time my daughter arrived this was no longer a stable line of work for the majority of its practitioners, including us. And now we had daycare costs and hospital bills. We started to search for jobs with regular pay, regular hours and health insurance.

My husband was already 50, and it turned out that our years of relative liberty of doing what we loved had finally exacted a price. When our daughter was four months old, it got even worse. We first hired a nearly full-time sitter and most of my own take-home earnings as an editor went directly to her. Eventually, my earnings also flowed to my daughter’s daycare (even though, paradoxically, all the caregivers were most likely themselves just scraping by). Again, given the larger field of suffering, our family’s worries were relatively low-key. Still, we yearned for more of a social mesh to keep us afloat. At the time, we felt like startled nocturnal animals.

Eventually, my husband found a full-time editorial job, and so did I. Perhaps not so coincidentally, mine was as director and editor of a journalism non-profit devoted to supporting reporting on inequality by a good number of reporters who had themselves fallen on truly hard times.

Through these full-time positions, our family was saved from tumbling out of our class position at least for now. But even after we found ourselves in momentary safety, I couldn’t shake the self-blame. Despite our encroaching middle age, we had not planned ahead, I thought. I felt juvenile but also suspected that the game was rigged that unlike me, the very wealthy who now filled the city of my birth didn’t lacerate themselves for small missteps.

This personal experience was partly how I arrived at what was to become the mantra of my investigation into economic insecurity: its not your fault.

It seems key to me to recognize that feeling in the red or on edge isn’t all your personal problem. And while some psychological analysis or boosts may help, the problem of not being able to afford to live in America cant be cured by self-help books. The problem is systemic.

To be squeezed is to be bound by a very American psychological and socio-economic predicament. Being squeezed involves one’s finances, one’s social status, and one’s self-image.

The middle class is a group defined by more than just money: it also leans on credentials, education, aspirations, assets and, of course, household income. According to a May 2016 Pew survey, the US middle class, defined as working people with a yearly household income for a family of three ranging from $42,000 to $125,000 in 2014, make up 51% of households.

Michelle Belmont and her family were in the middle class, and they were squeezed.

The many other middle-class families running furiously and breathlessly just to find themselves staying in place are a vast and varied coterie. It includes highly educated workers like lawyers, professors, teachers and pharmacists, professionals who never expected to be in this situation often feeling cast aside by a system that seems stacked against them. Their prospects for the future, given the rise of robots and automation within their professions, are likely to dim even further.

According to a Washington Post/Miller Center poll, 65% of all Americans worry about paying their bills as the parents I’ve interviewed, murmuring anxiously at their dining room tables, can attest. One reason for this anxiety is that middle-class life is now 30% more expensive than it was 20 years ago; in fact, in some cases, the cost of daily life over the last 20 years has doubled.

The price of a four-year degree at a public college one traditional ticket to the bourgeoisie is nearly twice as much as it was in 1996. The cost of healthcare has almost doubled in that 20-year period as well. And rent, not to mention homeownership, has also become substantially more expensive, though not quite to the same horrifying level as education and medical care. Meanwhile, the ongoing decimation of unions and employees rights continues, with pensions and minimal benefits fading. Unstable working hours are increasingly common too, making child care, always a high personal expense for families, all the harder to arrange and even more expensive while further testing family cohesion.4287

Motherhood is a disadvantage in the work world, with mothers statistically earning less than their male or childless peers. Photograph: Alamy

And the squeeze on the middle class has an element of gender bias as well. It’s no accident that many of the people I’ve come to know during my research are female. Although there are other contributing factors, there is one quite simple reason: motherhood is a disadvantage in the work world, with mothers statistically earning less than their male or childless peers. But fathers are harmed too: if they strive to more evenly balance their careers and their families, they may be stereotyped at work as weak. And if they go into traditionally female caring professions where most of the employment growth is these days they may receive the traditional female lower pay.

I call this just-making-it group the Middle Precariat, after the precariat, a term first popularized six years ago by the economist Guy Standing to describe an expanding working class burdened with temporary, low-paid and part-time jobs. My term, the Middle Precariat, describes those at the upper end of that group regarding income. Its membership is expanding higher and higher into what was traditionally known as the solid bourgeoisie.

These people believed that their training or background would ensure that they would be properly, comfortably middle class, but it has not worked out that way. Their labor has also become inconstant or contingent they do short-term contract or shift work, as well as unpaid overtime. They also do unpaid shadow work, like adjunct professors putting together packets for their classes off the clock, in contrast to their tenured colleagues. And its worse for the Middle Precariat of color, which typically has much less retirement security and ability to pay college tuition.

There are many culprits for the straits in which they find themselves most crucially growing income inequality, or as the business TV shows like to call it euphemistically, as if to deny their role in creating it, disparity. The United States is the richest, and also the most unequal, the country in the world. It has the largest wealth inequality gap of the 200 countries in the Global Wealth Report of 2015. And when the top 1% has so much so much more than even the top 5 or 10% the middle class is financially and also mentally outclassed at each step.

Behind the proverbial velvet curtain or mid-range eggshell-colored Roman blinds, these parents are desperately holding on to their status and trying to keep up appearances.

This is a true historical shift. According to a 2016 study by the Equality of Opportunity Project, Americans born in the 1940s had a 92% chance of making more money than their parents did at age 30. Those born in the 1980s have around a 50%t chance of earning more than their parents. (In the Midwest, as the New York Times reported, the odds are less than half.)

When I was a young child, professional aspiration was synonymous to me with the clatter of my mother’s high-heeled boots as she went off to teach each 1970s weekday morning, carrying her graded blue books under her arm. Each day was concluded when my exhausted mother picked me up late at the very end of after-school and took me home for a dinner of spaghetti and meatballs.

Yet despite the evident effort, they put in, my parents, college professors, had health insurance and the promise of pensions and social security. In their younger days, there were ample employment opportunities and cheaper rents in metropolitan areas. They could afford some extras that would strain a similar family today: out of their wages from teaching at a college, I received ice skating lessons. I was sent to a New York City private school, and we went on long vacations at the shore, where I could buy a kite in the shape of a butterfly and maybe collect wild plums on the dunes.

They weren’t alone. Middle class used to mean having two children and sending them to high-quality public schools, or even occasionally to private schools. It meant new brown Stride Rite Mary Janes with little purple and silver flowers when the old shoes were pinching the toes. It meant homeownership not for us, but for others like us. Nothing fancy, but a proper ranch house with a garage. It meant weekends off with your family, sometimes spent at a matinee at a movie palace, or a play thanks to a theater subscription, and workdays that ended at six so that the family all ate dinner together. And of course, it meant saving money as well as being able to pay for the children’s college education.

For the American middle class now, these markers of middle-class life are less and less common. The middle class is endangered on all sides, and the promised rewards of belonging to it have all but evaporated. This decline has also led to a degradation of self-image. Before the 2008 crash, only one-quarter of Americans viewed themselves as lower class or lower-middle class. Even those who were struggling tended to view their problems as temporary. No longer.

After the recession of 2008 which, though caused by the financial crash, could actually be said to have exposed or congealed decades of social class separation and downward mobility, since the Reagan era, a full 40% of Americans viewed themselves as being at the bottom of the pyramid.

For the first time since pollsters had asked this question, fewer than half of those interviewed said that they were middle class only 44%, according to a Pew study. Meanwhile, the wealthy with wealth here defined as assets minus debt stand in stark relief to the Middle Precariat. A 2014 Russell Sage Foundation report puts the net worth of the top 5% at $1.3m. The incomes of the top 1 to 5% have grown explosively in the past three decades, while the incomes of so many others have stagnated.

For the median family of color, that wage and wealth stagnation can be pretty dire. In a study published in 2017 by the organizations the Institute for Policy Studies and Prosperity Now (full disclosure: IPS is the fiscal sponsor of my organization, the Economic Hardship Reporting Project), the median wealth assets minus debt of white households is now over 68 times higher than that of black households. For black families, the median was just $1,700.

If you are an American working parent dealing with all of these stresses, you may feel like you are betting against the house and the house is always winning. Yet most of the parents I spoke to blamed only themselves, not a system stacked against them.

Those I’ve interviewed include a professor on food stamps in Chicago, an unemployed restaurant manager in Boston, a nanny in New York City betrayed by the American Dream, and even pharmacists who lost their jobs to a robot in Pittsburgh. They are people on the brink who did everything right, and yet the math of their family lives is simply not adding up. Some are just getting by. For others, something happened and they tumbled down and never got back up.

As these families struggle to preserve, or even simply to attain, a middle-class life, they do so in spite of, not because of, today’s America.

  • From Alissa Quarts Squeezed. Copyright 2018, Alissa Quart. Excerpted with permission of Ecco, an imprint of HarperCollins

Read more: https://www.theguardian.com/money/2018/jun/18/middle-class-debt-squeezed-alissa-quart-extract

Of course US birth rates are falling this is a harsh place to have a family

The US is one of only four countries in the world with no government-subsidized maternity leave while 36% of the workforce are contract laborers with no access to benefits


America’s birth rate has fallen to a 30-year low, let the hand-wringing and finger-pointing begin. It’s those selfish women, wanting careers before kids! Or, gasp, not wanting kids at all! It’s all those abortions! It’s Obamas fault!



The reality is, for all its pro-family rhetoric, the US is a remarkably harsh place for families, and particularly for mothers. It’s a well-known fact, but one that bears repeating in this context, that the US is one of only four countries in the world with no government-subsidized maternity leave. The other three are Lesotho, Swaziland, and Papua New Guinea, countries that the US doesn’t tend to view as its peer group.

This fact is met with shrugs from those who assume that companies provide maternity leave. Only 56% do, and of those, just 6% offer full pay during maternity leave. This assumption also ignores the fact that 36% of the American workforce, a number expected to surpass 50% in the next 10 years, are contract laborers with no access to such benefits. That gig economy you keep hearing so much about, with its flexible schedule and independence? Yeah, it sucks for mothers. That doesn’t stop companies and pundits from pushing it as a great way for working moms to balance children and career. As a gig-economy mother myself, I can tell you exactly how great and balanced it felt to go back to work two hours after giving birth.

If they return to work, mothers can look forward to an increasingly large pay gap for every child they have, plus fewer promotions. Who could resist?

The option for one parent to stay home with kids is increasingly not economically viable for American families, either. A data point that got far less attention than the falling birth rate was released by the Bureau of Labor Statistics last month: 71.1% of American mothers with children under 18 are in the workforce now. Its not just because they want to be (not that there’s anything wrong with that), but increasingly because they have to be in order to support the family.

Think millennials are our problem, shirking their breeding responsibilities because they’re too busy taking selfies? Show me your all-time low birth rate and I will raise you an all-time high student debt load (it hit $1.4tn this year). Millennials have an average of $37,172 in student loans when they graduate, a fact that has been blamed for their record-breakingly low homeownership. Generation Z won’t be much help either, given that about 40% of them are expected to default on their college loans when they can’t find jobs, according to Brookings.

Let us see, what else is at an all-time high? Credit card debt. It hit $1tn in the US for the first time this year. Childcare costs are another record-breaker. According to the Economic Policy Institute, in 33 states and the District of Columbia, infant care costs exceed the average cost of in-state college tuition at public four-year institutions. The few companies that offer discounted, on-site daycare have found that it more than pays for itself in tax breaks and retention and recruitment boosts, but its still rare. In the Fortune 100, only 17 offer any sort of on-site daycare. The US has flirted with the idea of subsidized daycare a few times, but a longstanding cultural notion that there is something inherently shady about daycare has kept us from ever really doing it, except during the second world war when we needed women to work. Perhaps if the birth rate gets low enough, we can get over our collective daycare aversion.

Guess what else is at an all-time low? Pay raises. Despite economic growth, since the 1970s, the hourly inflation-adjusted wages received by the typical American worker have grown only 0.2% per year. Which is basically nothing. Guess what though? Worker productivity hit a three-year high in 2017.

In the midst of the harsh economic reality facing parents and would-be parents in America is a looming physical threat: climate change. As the president and his EPA head parrot talking points from the fossil fuel industry, pointing to volcanoes and natural temperature cycles as the culprits for warming temperatures, the global scientific community tells us that we have virtually run out of time to do anything about it. That any children we have will be at a higher risk of dying in a superstorm or a massive fire. That because a small handful of men decided that their own profits and comfort were more important than the rest of the world’s safety, any new humans that join the world will face more significant challenges than the generation that came before.

A few months ago, Paul Ryan asked Americans to have more children and said he had done his part by fathering three. I would argue that his piece is creating an America that’s genuinely family-friendly and he hasn’t done it at all.

Read more: https://www.theguardian.com/commentisfree/2018/may/21/hat-looks-good-slug-birth-rates-us-falling-reasons-why-family-policies

Student loans ‘rising to trillion pounds’

                                            Image copyright Getty Images
Students are paying artificially high-interest rates, says a cross-party committee

The tuition fee system for England’s universities is ripping off students and giving taxpayers poor value for money, says a parliamentary committee.

The House of Lords economic affairs committee says it found evidence the student loan book would grow to over £1 trillion over the next 25 years.

The committee attacked a “deeply unfair” system of fees and loans.

But the Department for Education said its review of fees would “make sure students are getting value for money”.

This hard-hitting report accuses the government of using “accounting tricks” to conceal the real cost of higher education and to pile up huge debts for future generations.

It calls for “immediate reforms” – such as cutting interest rates on repayments and restoring grants for disadvantaged students.


Committee chairman and former Conservative minister, Lord Forsyth, said they had also been “quite astonished by the complete collapse in part-time education”.

The report warns of the lack of funding for vocational training – and claims that the apprenticeship system has been damaged by artificial targets invented to sound impressive for a manifesto promise.

The cross-party committee, with two former chancellors and two ex-chief secretaries to the Treasury, says the student loan system seems to have been used for a “fiscal illusion” to make the deficit look smaller.

“The thing that shocked me – and I thought I was pretty unshockable – was that I had not understood that by moving to a system of funding through loans, because of the accounting methods of the Treasury, it was possible for George Osborne [then chancellor] to appear to increase funding for higher education by £3bn but at the same time cut his deficit by £3.8bn,” says Lord Forsyth.

The cost of unpaid loans will not be included until they are officially written off after 30 years.

Lord Forsyth says a parliamentary question revealed how much student borrowing was really piling up for the future.

By 2044, when many of today’s students will still be paying off their loans, the student loan book will have grown to more than £1tn, rising to £1.2tn by 2049.

“The public argument for cutting the deficit was so that debt wasn’t handed on to the next generation.

“But for this generation, being asked to pay these loans, when they’ve eventually paid them off, they’ll suddenly find there’s a bill for £1.2tn.

“I hadn’t realized that was happening.”

‘Devastating consequences’

But Lord Forsyth says this system has had “devastating consequences”.

It has produced excessive interest rates, set to rise again to 6.3%, which the committee says should be no higher than the rate at which the government borrows, at present 1.5%.

Image copyright Getty Images

 The committee heard that some existing training had been re-badged as an apprenticeship

The conversion of means-tested grants into loans has meant that the poorest students end up graduating with the biggest debts, says Lord Forsyth.

And he warns that the current repayment system was more expensive for people in middle-income jobs such as nursing, rather than high-paid lawyers or financiers, who would pay off their debts more quickly.

“The people who get screwed by this are those in the middling jobs,” says Lord Forsyth.

“This was all done on the basis that it would create a market in higher education – and that has failed, there isn’t a market.”

Lord Forsyth says that there is no meaningful consumer choice or competition – and he dismissed the system for rating teaching quality in universities, the teaching excellence framework, as a “bit of a joke”.

“Because no-one ever turns up to look at the teaching,” says Lord Forsyth.

‘Quantity rather than quality’

The report says that the student finance system has failed to recognize the need to improve vocational skills and to help those wanting to re-train.

Part-time student numbers have fallen by about 60% over the past decade – with accusations that the funding system is based around school-leavers beginning full-time degree courses.

“There’s been a hugely distorting effect. It’s a huge mistake,” says the committee chair.

Lord Forsyth says there have been concerns about the apprenticeship policy – and the committee heard suggestions that the target for three million apprentices was not the result of any strategy, but was chosen as an impressive number for a manifesto promise.

The consequence of such target setting, he says, is to “encourage quantity rather than quality”.

It means more attention is paid to the numbers starting than completing and there were signs that some employers were re-badging existing training as “apprenticeships” as a way of getting funding.

“There is clear evidence that what the economy needs is more people with technical and vocational skills. But the way that the funding for fees and maintenance operates makes it pretty well impossible for us to meet that demand,” says Lord Forsyth.

Alice Barnard, chief executive of the Edge Foundation, which promotes vocational education, said the report “clearly highlights how the funding bias in our higher education system has favored universities at the expense of choice and opportunity for young people”.

The head of the MillionPlus group of new universities, Greg Walker, said the report had produced “robust evidence” to support the return of maintenance grants and to find ways to make universities more accessible to part-time students.

A Department for Education spokesperson said: “We agree that for too long young people have not had a genuine choice post-16 about where and what they wish to study.

“That is exactly why we have overhauled apprenticeships to focus on quality and why we are fundamentally transforming technical education, investing £500m a year in new T-levels that will provide a high quality, technical alternative to A-levels.

“On top of this, we are undertaking a major review of post-18 education and funding, to make sure students are getting value for money and the genuine choice between technical, vocational and academic routes.”

Related Topics

Read more: http://www.bbc.co.uk/news/education-44433569

10 Things Millennials Should Do to Get Rid of Student Loan Debt

So here are my top 10 tips to get rid of student loan debt so you can get on to other important things in life (like traveling, inventing, and jamming).

1. Make friends (or at least amends) with your debt.

Student loan debt is currently hitting the US in a huge way (as in over a trillion owed). Being part of such an enormous sum can be weirdly uniting and comforting. It’s terrible, but it also means that you aren’t alone. But while it’s nice to share a certain camaraderie over your debt, it’s easy to spend more energy on feeling defeated than on actually paying it off. That’s why it’s essential to focus on your personal numbers and come to terms with what that means for you. Engage with your student loan debt, make peace with the fact that it’s a part of your life. That means opening bill statements and doing research that allows you to truly understand your options and how to pay off your debt even more quickly.

2. Understand the terms of your repayment plan.

Next up? Understanding what the heck is going on with your student loan debt repayment. I was (rightly) intrigued by all the federal loan repayment plans when I was in college. It seemed like they were there just for me… the low earner and high debtor! Under an income-based repayment (IBR) plan, 25 years of consistent on-time minimum payments meant the remaining balance is just forgiven. Plus I would get to push off repayment for a good year via grace period, forbearance, and deferment? Psh, that doesn’t seem too bad…said the 22-year-old with no real concept of time or how interest works.

Twenty five years is indeed a long time–I’ve since realized. And I’m not that interested in being chained to debt for quite that long if I can help it. It’s a lot of time for compounding interest (and not the good kind) to accumulate. I’m definitely not interested in paying tens of thousands of dollars in interest.

It’s not that these programs don’t make sense–anyone who’s struggling financially could (and does) benefit from any one of them. But they’re also not the end-all-be-all of your debt repayment. I went straight-shot to a plan where I paid the least amount each month because I thought it was my most feasible option. And honestly, at the time it was. But I didn’t really understand what my repayment should look like over time and I stuck to paying minimums even as I started to make more money. I was just happy to be following a plan! Unfortunately, it was one that put me on the slow track to debt free. Do some homework (ahhh, never thought I’d say that again!!) and carefully consider what each repayment plan means. Take into account the length of repayment, how you might accelerate your plan as you continue to increase earnings, and even just consider what it means to pay student loan debt for so many years.

3. Create a personalized repayment plan.

Once you’ve figured out exactly what repayment plan works best for your present (and your future) circumstances then it’s time to put your sweet college skills to good use! Creating your very own repayment plan will help you to keep track of your payments and ensure that you’re going about repayment in the most efficient way possible. Decide on your timeline, how much you can sensibly pay into your repayment plan, and how you want to go about paying off your student loan debt most effectively. Visuals that highlight your repayment timeline are particularly useful to help you really picture the trajectory of your repayment. When I first started using ReadyForZero, I was a bit appalled each time I saw my principal balance creep up on the graph when I was accumulating interest. It was motivating!

4. Make your payments work FOR you.

Micromanage your debt! There are so many sneaky tactics that could be keeping you in debt for longer than necessary. To pay off your student loan debt you’ll need to keep your wits about you–especially as you sort out your initial payment plan. Ultimately, you want to make sure that you’re paying off your higher interest rates first while paying minimums on the rest, and also that your payments are actually applied to the principal balance! Be diligent with your payments or the entire process will go on for longer than anyone would probably like.

5. Bi-weekly payments.

Making bi-weekly payments is a fun “trick” to share and it also happens to be an awesome way to accelerate your repayment plan. If you’ve never heard of bi-weekly payments before they essentially add an extra payment each year. It works like this… instead of making one single payment each month, you take your monthly payment and divide it by two. Then you pay two half payments every two weeks, instead of one full payment at the end of the month. Since there are 52 weeks in the year, that means you’ll have an extra payment on your debt repayment. It’s fairly simple and the result is pretty awesome. Punch in your numbers to see how it works for you using this calculator!

I know, it’s a crazy cool trick! And it’s not even magic.

6. Track your daily interest…

… because you will be traumatized into action. I remember the moment that I truly understood just how much interest I was accruing on a daily basis. Let me tell you, it was a doozy of a panic. The only thing worse was seeing how that translated into monthly interest charged, and then from there, the yearly interest.

Keeping track of interest paid is one of the most effective motivators when it comes to paying off your student loans. It hurts to see how much interest you’re paying on a daily basis, even if your loan is attached to a slight interest rate. Even years into repayment it pains me to see my daily interest charges. On the same token, these numbers have motivated me to throw more force into my repayment plan.

7. Pay above the minimums.

Yet another must for millennials who want to dig out from under student loan rubble… pay above the minimums! If you pay the suggested payments you will be stuck in the student loan payment wheel for a long time. Much longer than if you paid even a small amount above the minimum payments. That’s because minimum payments are often largely a representation of the interest accumulated over the previous month. It’s essential that you boost your payments above the minimums, even if it’s just $20 a week.

8. Tweak your spending habits (or create good habits that will help speed up your repayment).

One of my favorite tricks to connect with my spending is to preface every “extra” purchase with… “are you willing to buy this AND match the amount in your repayment?” So for instance, if I see something that I want, but don’t need I’ll challenge myself to match whatever I spend on that item and put it directly into my student loan debt payoff. Sometimes, that stops me from making the purchase. Other times, it incentivizes me to put more into my repayment plan. It’s a great way to add a bit of thought to my purchasing–especially since it’s so easy to swipe more than I intend to when I’m hungry at the grocery store.

9. Use accountability.

Talk about your student loan debt! Tell people about your student loan debt! Sharing is a great tool to help you stick to your repayment plan and stay accountable to your goals. I’m not saying you have to live-tweet, snapchat (I’m trying to sound hip by using these references), or paste your numbers on your resume, but sharing your student loan payments goals with someone you trust and who will kick your butt when you’re distracted is extremely valuable. And remember when I talked about the camaraderie over student loan debt in the beginning of this post? It can work for motivating each other’s repayment too!

10. Have common sense (AKA, hone in on your inner Kali).

I’m not stretching in the least when I say that Kali is one of most inspiring millennial financial bloggers I’ve come across. She’s done an amazing job at securing her finances by using a powerful, but simple tool: common sense. And even better–she’s spreading this common sense and sharing tips that are simple and easy to implement. By making good financial habits widely applicable, she’s shown that this is not something that people have to struggle with alone and that much of financial wisdom can be boiled down to making informed and sensible decisions.

She’s a smart cookie – I’d listen to her.

Bonus: Open up a retirement account

OK, I know I said 10. But here’s a “bonus” tip, if you will…

If you don’t already have a retirement account, get thee to a computer/bank/financial advisor/friend and go about opening one!! I was practically forced to open up a Roth IRA and it was one of the best decisions of my young life. Not only did I start to build up savings for my eventual retirement kingdom, the biggest benefit came around tax time when I realized that I qualified for the savers credit! $500 into my retirement savings and then $500 returned at tax time. Millennials are winning in one area… we’re young enough to benefit from compounding interest in our retirement accounts. Start today!

Student loan debt can carry a stigma, but finance is a part of life. It isn’t something that you have to turn into a dry, boring topic as evidenced by some of Kali’s creative posts. There are tons of resources available to help you out. If you want to optimize your life and happiness you’ll need to lock-down your repayment so that you can free up more of your attention and funding to pursue personal goals. Get your student loan repayment together and you’ll be all the closer to your dream job of traveling the world while spearheading your own startup! Or, in my case traveling to New Zealand to take the Lord of the Rings movie tour.



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