Cole R. asks:
I'm a senior in college with student loans and about $3,000 in credit card debt. I'm engaged to be married next summer--but my fiance's grandparents will pay for the wedding. Could you please give me a starting point for what I need to learn or take care of with my personal finances? I want to start investing and look into college loan consolidation.
As an upcoming graduate, Cole's first priority should be to land a job that will cover his living expenses and debt payments. I recommend that he use his final year in college wisely by attending every job fair, networking event, and career counseling opportunity that he can.
He should get his profile on LinkedIn and resume in tip-top shape because it's a tough time for new graduates to find work. College seniors need to keep their eye on the prize and stay focused on the best opportunities in their field.
I assume that Cole is making the minimum payment on his credit card(s). He should keep them current while adding as little new debt as possible.
After Cole gets a job he'll probably have the opportunity to participate in a workplace retirement plan like a 401(k). That's the best place to cut your teeth on investing because you'll have help from the human resources or benefits department for choosing appropriate investments from a menu of options. Plus, contributions get whisked out of your paycheck before you have the chance to spend them. I recommend that Cole set a goal to contribute a minimum of 10% to a retirement plan right out of the gate.
After Cole is settled into a job and starts repaying his student loans, he can find out whether loan consolidation makes sense. In Paying Off Student Loans I give you the pros and cons associated with doing a student loan consolidation. Whether it makes sense depends on the types of loans you have, the repayment features, and the interest rates.
Consolidation can be helpful if you can't meet your monthly debt obligation. However, that monthly savings is typically accomplished by stretching out the term of the loan, which costs more interest in the long run. So be sure to speak with your lenders and have them review all of your student loan repayment options.
Laura Adams is the award-winning author of Money Girl’s Smart Moves to Grow Rich. Get the paperback or ebook on Amazon.com!
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