Archive for March, 2009

They say taxes and death are the two things you can always count on. For college graduates, it is more like student loans and taxes. Statistics show that the vast majority of students graduate with heavy loan debt, which must be repaid.

Receiving your first student loan repayment invoices can be a shocker. When did I borrow so much money? Who in their right mind gave it to me!? The panic will subside once you put together a plan, but it can certain be a rude introduction to the life of an adult.

Receiving your first student loan repayment invoice in the mail can be a real shocker. Ah, but you have a second whammy coming down the line. Yes, I am talking about the joys of paying taxes now that you have some real income. It can be slightly depressing. Regardless, Uncle Sam is going to help you out.

There are all kinds of strategies for paying back student loans. Unless you win the lotto, none of them will work in one year. This can be depressing at first, but an adult beverage may help as well the news that you get a tax break because of them.

Student loan payments are comprised of principal and interest. The interest you repay is a tax deduction you can use year after year while repaying your loans. That deduction is capped at twenty five hundred dollars, but that is still a lot.

This health deduction can lead many graduates to implement an odd financial plan. They decide to make the minimum payments on their loans, so they can claim the deduction for years and years. This works okay so long as you show some discipline with the money saved.

Since you will not be paying any extra amount on those student loans per month, it is wise to invest that money elsewhere. Otherwise, you may as well put it towards those loans. First, set aside an emergency fund. This fund should contain enough money for you to live comfortable for six months.

Put that money away for a rainy day. Now cut up your credit cards. Save one for emergencies, but store it away. Now put together all your credit card statements. Pick the smallest balance and start paying them off one by one.

Once you have taken care of these two things, start pooling and investing your money. Your goal is to build up a big enough investment that you can pay off the loans in one fell swoop. Until then, claim that deduction!