Three Things You Need to Do to Your Student Loans Right Now

Stay ahead of this big expense

Recent college graduates already have enough on their plates worrying about getting a job and supporting themselves — the last thing they want to do is stress over student loan repayment. For most, paying off student loans takes a long time, so no matter where you are in that process, there are three things you should stop and do right now.

1. Get organized
Take an inventory of your student loans. You can get a list by signing up at After a short enrollment process, you will have a handy list of all guaranteed loans that were issued to you by the government, as well as those made by private lenders through June 2010. If you have a private nonguaranteed loan, those should all be present and detailed on your credit report, which you can find for free online.

Create a spreadsheet chronicling the name of each lender, the web address, your username and password (ensure your device is locked or encrypted), the loan balance, and the interest rate. The latter will be helpful if you opt to consolidate or pay off any interest early down the road. But be sure to keep your list up to date, as interest rates on student loans can be fixed or variable.

2. Know your repayment options
“The standard repayment schedule extends your loan payments over ten years, or 120 payments,” explained Maggie McGrath of Forbes. “However, if the standard monthly payments aren’t manageable on your budget — or if you’re unemployed or otherwise unable to repay your loans — the federal government has some alternative repayment plans for you, as well as some deferral options.”

Income-based repayment (IBR) and income-contingent repayment (ICR) extend your payment period to 25 years, capping your monthly payments at a fixed percentage of your income. The income on which payments are based and the actual percentage differ between the two plans. Pay-as-you-earn is a 20-year repayment period, with yet another varying percentage of your discretionary income.

You can read about other repayment options from the government here: Be wary, as these types of programs can cause your interest costs to increase over time, so always pay as close to your original amount due as you can.

3. Be aware of loan forgiveness opportunities
There are three primary programs that forgive the balance of your loan: Public service loan forgiveness, teacher loan forgiveness and Perkins loan cancellation.

“To qualify for forgiveness, your loans can’t be in default, meaning they’ve gone unpaid for more than nine months,” noted higher education expert Brianna McGurran of Nerdwallet. “Also, private student loans don’t offer forgiveness, though some lenders will let you make interest-only payments or take a temporary interest rate reduction if you’re having trouble affording your bill.”

Public service loan forgiveness requires you to have been working for a nonprofit or the government for at least 10 years in roles including, but not limited to, firefighting, teaching, the military and nursing. In the teacher-specific program, you must work full time as an educator for five consecutive years. The Perkins loan forgiveness also cancels the balance of that loan if you’ve worked as a teacher, firefighter, nurse, police officer, school librarian or public defender for about five years or more. For a complete description of eligibility requirements, visit

If you take the time to do your homework and gather yourself before — or even while — you are repaying your student loans, the process will seem a lot less scary, and a lot more manageable.

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Direct Subsidized and Direct Unsubsidized Loans for Students

The difference between these two types of student loans

If you or a family member is in the process of applying to schools and seeking information about the various ways to cover tuition and the associated costs, you may have already learned that you can choose between applying for loans that are either subsidized or unsubsidized.

There are key differences between these two types of loans that you should learn to make sure you choose the type that better suits your financial needs.

One of the things that make the loan application process slightly more confusing is that different people or organizations may use different names when referring to the same loan. Direct Subsidized Loans and Direct Unsubsidized Loans are sometimes called Stafford Loans or Direct Stafford Loans, respectively, so if you’ve heard those terms, you should be aware that they are the same and not two additional loans out of four different types being discussed. Regardless of what these loans are called, when trying to figure out which type of loan is which, the most important criterion to look at is whether the loan is subsidized or unsubsidized.

Both loan types are offered by the U.S. Department of Education to eligible students who attend participating schools. They can be used at four-year colleges and universities, community colleges, and trade, technical and career schools.

Qualifying for either type of loan requires the student to be enrolled at least half time at a school participating in the Direct Loan Program. Typically, the student’s chosen program must be one leading to a degree or certificate.

Direct Subsidized Loans offer students slightly better terms. This is because they are intended to go to students with financial need.

The website run by Federal Student Aid, an office of the Department of Education, defines financial need as “[t]he difference between the cost of attendance [COA] at a school and your Expected Family Contribution [EFC],” and states, “While COA varies from school to school, your EFC does not change based on the school you attend.”

Although your EFC will not change depending on your chosen school, your school will be responsible for determining the amount that you can borrow. That amount may never exceed your financial need, however.

The biggest advantage of a Direct Subsidized Loan is that the Department of Education pays the interest on the loan while the student is still in school at least half time. The federal government will also pay the interest on the loan if the student has postponed his or her loan payments with an authorized loan deferral. Furthermore, the six months following the student’s graduation are considered a “grace period,” during which time the federal government continues to pay the loan interest. This is intended to make it easier for students to make payments while searching for a job.

Although the party responsible for paying the loan interest differs, the interest rate itself does not depend on the loan type.

“As of 2013, interest rates charged for Federal Direct Loans began to be tied to the 10-year Treasury note, with an additional margin added on to cover expenses,” states Mark P. Cussen, CFP, CMFC, AFC, in an article for Investopedia. “They do not depend on the borrower’s credit score.”

In order to qualify for a Direct Subsidized Loan, the income level of the student’s family must not be above certain levels. The exact criteria that define low family income and sufficient financial need are detailed in the Free Application for Federal Student Aid (FAFSA). More information about the regulations and processes of applying for student aid with FAFSA can be found at

While Direct Unsubsidized Loans don’t have an income requirement, the student is responsible for the interest accrued during all periods. One advantage of Direct Unsubsidized Loans is that they are available to graduate students, which isn’t the case with Direct Subsidized Loans. A further advantage is that it is possible to take out more money with a Direct Unsubsidized Loan, so students with very large educational costs to cover may find it necessary to use a loan that is unsubsidized.

The cost of education is rising at an alarming pace, but thankfully there are many financial tools, including Direct Subsidized and Direct Unsubsidized loans, to help students and their families cover it. To delve more deeply into the details of these loans and explore the wealth of information available online for students and their families in the application process, visit

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Benefits of Applying for Local Scholarships and Grants

With the rising costs of higher education, apply for as many scholarships as possible

A couple hundred dollarsfebruaryfeatured_localschol2 from a local scholarship may sound like a drop in the bucket when it comes to paying for college tuition and expenses, but the reality is that every dollar counts and several local scholarships can add up to a significant amount of free money for your education.

The reality of large-sum grants
There aren’t many people who can afford to foot the complete bill for their higher education. Yet most only apply to large-sum scholarships and grants to help pay for college, and while those $10,000 and $50,000 nationally awarded grants could make a significant difference in affordability, the truth is they’re difficult to get.

According to an October 2015 article in U.S. News by contributor Jessica Zdunek, largely-funded government agencies and well-known national brands like Ford, Nordstrom’s and Coca-Cola award significant educational scholarships each year, but applying to these means going up against hundreds, if not thousands, of other applicants across the country, which significantly reduces your chances of winning such a grant.

That doesn’t mean you shouldn’t apply for large scholarships, because there’s still the chance you could win, but you should better your odds of financial aid by applying for local grants as well.

The advantages of local scholarships
A first, albeit obvious, advantage of a local scholarship is just that: it’s local to where you live.

According to Zdunek, local scholarships can have application limitations that can actually increase your odds of being awarded. These grants can be limited to people who live in a specific town or region, to a certain GPA minimum, and even to specific extracurricular activities. As long as you meet the criteria listed, you are more likely to win a local award than a national one.

“Scholarship providers like to see people from their community succeed and so they often offer local scholarships available only to residents of a particular geographic region,” says an article on, a financial aid and scholarship resource site.

Local scholarships are also less likely to be known, so there will be less competition for them than for a national grant.

According to a January 2011 article in U.S. News by Scholarship America, community organizations that offer scholarships typically inform the local high school, either by contacting the guidance counselor or by posting the scholarship in the school’s career center. Instead of competing against the thousands of people searching the internet, applicants compete only against the other students in their school.

Local scholarships can also be awarded on a relationship basis, such as businesses with financial assistance opportunities available to employees and their families. Some businesses will even award scholarships to students if they plan to work for the company after graduation, as this is seen as an investment for the company.

They are also generally easier to follow up on and there’s often a designated person in the business who can answer questions about the scholarship or application requirements directly.

Every dollar counts
“Local scholarships sometimes aren’t as eye catching because they’re just a few hundred dollars. “This can discourage people from applying, but the truth is these small amounts add up,” says Zdunek.

Even if the dollar amount is less than that of a national scholarship, any amount is helpful in offsetting the expense of higher education. For instance, those dollars could go toward books or equipment, or help cover smaller living expenses.

Find out more about our three $2,500 scholarships by visiting our site!

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Colleges That Don’t Make Students Take Out Loans

Are student loans a thing of the past?

Each year, more and more studentsCollegeLoans_062816 are graduating from college with thousands of dollars in student debt that they’re responsible for paying back. A 2014 study by The Institute for College Access & Success (TICAS) found that nearly 69 percent of students graduate with an average student loan debt of $28,950.

However, according to Edvisors, a college finance website, more than 70 schools have adopted “no-loan” policies, where grants replace loans within their financial aid packages. Additionally, other colleges have eliminated loans for those students who are eligible for financial aid. At these schools, the number of students who borrow is much smaller, and college graduates have loan balances that are much lower than the national average of nearly 70 percent (according to TICAS).

While these policies don’t necessarily eliminate loans in their entirety, the financial aid package is based on the school’s estimate of what the family can afford to pay. If a family chooses not to pay the full amount, the student must borrow money to make up the difference. Also, some students borrow to cover costs that aren’t included in their financial aid packages, such as health insurance or laptop computers.

Schools that don’t make students take out loans typically have a smaller number of students who borrow, and the college graduates who do take out loans have balances much smaller than the national average.

According to Kiplinger in May of 2015, these five schools are among the best when you want to graduate with minimal student loans:

Yale University
Students who are eligible for financial aid—families with incomes of as much as $200,000—can utilize Yale’s no-loan program. According to Kiplinger, the total annual cost to attend Yale is $60,850 and the average need-based aid is $44,268. However, the percentage of students with loans is 16 percent.

Vanderbilt University
In 2009, Vanderbilt decided to take on a no-loan policy. All students who are eligible for financial aid are able to use the policy. Almost half of students at the university receive need-based aid, and 87 percent of students take four years to graduate, which minimizes costs. The total annual cost is $60,294, and the average need-based aid is $39,373. The percentage of students with loans is 22 percent.

Davidson College
This liberal arts college provides 100 percent financial aid through grants and campus jobs to the 46 percent of students who receive need-based aid. The average need-based aid is $33,717, and the total yearly cost is $59,146. The percentage of students with loans is 22 percent.

Princeton University
As the first school to employ a no-loan policy back in 2001, Princeton has an average student debt that is very low compared with that of other colleges. The total annual cost to attend Princeton is $59,165, with the average need-based aid reaching $37,183. The percentage of students with loans is 24 percent.

Offering need-based financial aid to over 60 percent of attendees, Harvard also meets all of those students’ demonstrated financial need, all without loans. Families who make between $65,000 and $150,000 annually are generally expected to give a maximum of 10 percent of their income. The average need-based aid is $41,975, and the total yearly cost is $59,607. The percentage of students with loans is 26 percent.

Digging yourself into debt while going to college isn’t necessary. Contact us today to find out what the best steps are for your individual situation.

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New Purchasing Rules for 529 Plans

Purchasing computers and computer-related equipment with your 529 plan

Aside from tuition, books and housing, New529Rules_062116a computer can be one of the biggest expenses when starting college. Many students find that their new college lifestyle and coursework necessitate the purchase of a new computer.

In 2009 and 2010, funds from 529 plans could be used to pay for computers, which was a big help to students and their families. After that, however, computer purchases were allowed only if the educational institution specifically required the computer for attendance.

Fortunately, a new law passed at the end of 2015 reinstated the permission to use 529 funds for computers, whether or not they are explicitly required by the school. Although the legislation extended retroactively for all of 2015, that does not mean you can withdraw funds to pay for a computer purchased in 2015 now that it’s 2016.

“Most tax advisers tell their clients: ‘Make sure your expenses and distributions occur in the same year,’” states Jamie Canup, partner and chair of the Hirschler Fleischer tax practice in Richmond, Virginia, who was interviewed by U.S. News & World Report.

“The rules aren’t clear once you cross the calendar year,” states Deborah Ziff for U.S. News & World Report. “…but Canup says he wouldn’t risk trying to do it now that it’s 2016.”

If you missed out on getting tax benefits for a computer purchased last year, there are plenty of other advantages to the new legislation, and it is permanent for future years. Plus, the definition of a computer includes tablets, such as the iPad. Funds can also be used to purchase peripheral equipment, which includes a printer and scanner. Educational software is also eligible, but computer games are not.

“Peripheral equipment is defined as auxiliary machines designed to be placed under control of the central processing unit of the computer,” according to Ziff. “Exceptions include typewriters, calculators, adding and accounting machines, and copiers.”

In order to cash in on these new benefits, you must keep in mind some additional rules. First of all, the student must be the primary user of the computer and any peripheral equipment.

Furthermore, in addition to being the primary user, the student must be enrolled in an eligible educational institution. Another technicality to consider is that your internet access may be part of a bundle with other noneducational services, such as cable. If this is the case, it is best to speak to a tax professional to determine how to handle the bill.

“The legislation does two other things regarding 529 plans: It allows account owners who take a withdrawal but then get a refund from the school — for instance, because their child gets sick and has to drop out for the semester — to redeposit that money in the 529 plan within 60 days with no penalties,” states Ziff. “It also changes reporting standards that apply to account holders with more than one plan per beneficiary.”

Previously, 529 account administrators aggregated all accounts that had the same holder and beneficiary. New rules state that each 529 plan needs to keep its own discrete ratio of earnings and contributions. This is a good thing, because it allows account holders to decide exactly where they want to withdraw funds from.

“This matters because only earnings are subject to taxes and penalties for withdrawals that don’t qualify as educational expenses,” reports Ziff.

Although it isn’t necessary to give any special documentation to the administrator of your plan when you make a withdrawal, you do need to maintain and save records of your expenses and purchases, including the date and price of each. This information needs to be saved in your tax records.

“If the withdrawals were for eligible expenses, you don’t need to do anything when you file your taxes — just keep the 1099-Q form and your receipts in your tax records,” according to Lankford. “The 1099-Q will specify which portion of the withdrawal is considered principal and which is earnings.”

So, if you already have a 529 plan, keep this information in mind to get the most bang for your buck, and if you are looking for a new plan, make sure to talk to your financial adviser to find the best one.

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Should You Get an MBA?

Determining whether an MBA is worthwhile for your financial future

There is alwaysMBA_Featured plenty to consider when it comes to determining the value of any type of educational degree, both undergrad and graduate. Lists of the schools where you get the most bang for your buck are always headline-grabbing, and analysts even try to compare the future financial value of potential college majors to determine which lead to the most affluent careers.

One type of degree that people are particularly interested in, regardless of the field they work in, is the MBA. If you are wondering about the value of going back to school for your business degree, the following information can help you make that determination.

“An MBA is only worth the expense, time and effort when the graduate plans to work in a business-related field, in management, or as a company founder. For those working in other industries, unless they are in management or leadership roles, an MBA may not be useful,” says Adam Hayes, CFA for Investopedia.

It is important to have a specific career plan in mind in order to properly determine whether an MBA is right for you. If you want to start your own business or need to add some credentials to your resume, getting an MBA could be exactly what you need. Furthermore, if you work in a field where all advanced positions are held by people with MBAs, it could also be in your best interest.

If you are hoping to advance in your current field by getting your MBA, you should look to see whether the higher-ups at your company or in your field have MBAs. If most do not, then it is reasonable to think that you also may not need one to receive a similar promotion. If you have lots of experience in your field and have already achieved a leadership position, you may not need an MBA to prove your worth to a new company, even if many of the other employees have them.

If you have determined that an MBA is important for your desired career, it is important to note that not all MBAs are created equal. Schools with highly selective admissions carry an air of prestige that many people feel will help them get ahead. Not everyone can get into these schools, obviously, which is why they have earned their reputations. This leads potential students to wonder whether they should forgo getting an MBA if they can do so only at a second- or third-tier school.

“A new analysis done exclusively for Poets&Quants by PayScale, which collects salary data from individuals through online pay-comparison tools, shows that the MBA — even from schools that lack global or national cache — delivers hefty seven-figure income over a 20-year period,” says Fast Company and BusinessWeek former editor John A. Byrne in a contribution to LinkedIn.

This analysis used information from graduates of the top 50 U.S. schools to determine median pay and bonus pay over a 20-year career span. The estimates were conservative because they did not include compensation in the form of retirement benefits, health care or stock, which all add hugely to the overall value of a job.

“For the most part, the results are exactly what you would expect: The highly ranked, big-brand schools tend to deliver the highest earnings over a 20-year period,” according to Byrne. “Harvard Business School’s MBAs come out on top, with median income of $3,233,000.”

It’s no surprise that you will definitely get the most value if you can get into one of the top-tier schools. However, when you consider the fact that graduates from all top 50 schools analyzed earned a high income over the span of 20 years, it is clear that you shouldn’t rule that MBA out if you can’t get into a top-tier school.

If you think carefully about the career you hope to have in the future, you can make a good determination of whether an MBA is necessary for potential job candidates and whether that MBA can be earned at a school you can feasibly get into. Speak with us if you have any questions about financing your college dreams.

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The Economic and Social Cost of Student Loan Debt

The wide impact of student loan debt and how to help the situation

The cost of studentStLoans_Featured loan debt is clearly felt by those directly involved, whether they are students themselves or family members who have taken out loans on behalf of the students. Student loan debt has a wider effect, however, with a large economic and social impact that spreads throughout the country.

“In a widely discussed brief last year (as widely discussed as briefs can be), data from the New York Fed suggested a macroeconomic drag due to student loan debt in the wake of the Great Recession,” according to Forbes Contributor Josh Freedman.

The brief also suggests that people who had more student loan debt were not as likely to purchase cars or homes as people were without a debt burden. This has a direct impact on the car and housing markets and a wider impact on the economy as a whole.

“Rising student debt levels are changing how millions of people approach major milestones and core financial decisions, affecting long-standing social and economic patterns,” states Kelley Holland in a contribution to CNBC. “Owning a home used to be a key marker of adulthood and maturity. But home ownership has plummeted among Americans under age 35, from 43.3 percent in the first quarter of 2005 to 34.6 percent in the first quarter of 2015, according to the Census Bureau.”

Due to student debt, first-time home buyers can only afford homes in the lower price range, which is limiting the market value of other homes. Builders and realtors are also being impacted due to the lack of market for higher valued homes.

People in their 20s are also delaying starting a family, a trend that has been going on for years. In the summer of 2015, the birth rate for women 20-29 hit a record low according to Pew Research. It isn’t possible to predict exactly what the economic impact of this trend will be, but it is clear that the social impact is already being felt, as the landscape of young parenthood already has a dramatic new look.

“Research has also found that the burden of student debt hinders innovation and entrepreneurship, a core component of the economic prowess of the United States,” states Holland. “Researchers at the Federal Reserve Bank of Philadelphia and Penn State studied the relationship between student debt and small business formation and found ‘a significant and economically meaningful’ link: more student debt led to fewer small businesses being formed.”

Experts have many ideas regarding how to improve the student loan situation. Due to the fact that the majority of student loans are federal loans, some experts feel that there would be less student loan debt overall if the balance shifted more toward private loans from financial institutions.

“First, private student loans arguably have the strongest consumer protection: a robust underwriting process that includes an ability-to-repay test,” says Richard Hunt, president and CEO of the Consumer Bankers Association, in a commentary on “Government loans are subject to the Department of Education lending rules, which don’t require such a test.”

Another reason is that private lenders must provide a full and comprehensive disclosure of conditions and terms, and a summary of the full price of the loan over its lifetime. This can help students and their parents accurately weigh the costs and the benefits.

Students can also help decrease the burden they feel, as well as the larger social and economic impact of their debt, by taking the right steps to make home ownership easier sooner. A good start is talking to their financial institution about the steps they can take to reach a level at which they can be approved for a loan. This could include forming goals like saving up to a specific down-payment target. Then they can make use of one of the many free budgeting tools available online to help get their spending in check and save more efficiently.

Higher education is still a very important part of building a successful future. You can be in a better position to enjoy the rewards if you make thoughtful decisions about what type of loan to choose and practice careful budgeting to ensure that you can still meet all your life goals, like buying a home and starting a family.

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What Is a Federal Pell Grant

A basic guide to Federal Pell Grants

Paying for a collegePellGrants_Featured education typically requires pooling money from a variety of sources like scholarships, loans, savings accounts, financial aid packages and work study programs, just to name a few. One excellent source of funding for those who qualify is a Federal Pell Grant. Here is some basic information to help you understand how these work.

Typically, Pell Grants are only awarded to undergraduate students who haven’t earned a professional degree or bachelor’s degree. There are certain cases, however, where it is possible to receive a Federal Pell Grant if you are a student enrolled in a post baccalaureate teacher certification program. There are several other restrictions on who can receive these grants. People who are incarcerated in a state or federal penal institution are not eligible, and neither are people subject to certain types of involuntary civil commitments after incarceration.

The most exciting part of a Federal Pell Grant is that it is not a loan and therefore does not have to be paid back. For the 2015-2016 award year, which ends June 30, 2016, the maximum award is $5,775. This maximum is subject to change yearly, and you can’t receive Federal Pell Grant funds for multiple schools at one time.

If you do receive a Pell Grant, you will not necessarily receive that maximum. The amount you get depends on your financial need, but it is not impacted by how much student aid you qualify for through other programs. It also depends on the cost of attendance at your school, whether you are a part-time or a full-time student and whether you will be attending school for a full academic year or less. Every school that participates in this federal program gets sufficient funding from the U.S. Department of Education each year to give the right amount to all of its eligible students.

It is also possible that you could qualify for a larger grant if you had a military parent who died during combat in Afghanistan or Iraq.

“If your parent or guardian was a member of the U.S. Armed Forces and died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, you may be eligible for additional Federal Pell Grant funds if, at the time of your parent’s or guardian’s death, you were less than 24 years of age or enrolled in college or career school at least part time,” according to the website of Federal Student Aid office of the U.S. Department of Education.

Although this federal program is designed to help low-income students, it can be hard to predict your own eligibility. So even if you fear that your income is too high to qualify, it is important to look into the program.

“For the majority of Americans who don’t think they qualify for Federal Pell Grants, the federal grant known for helping low-income students, it’s easy for them to think that financial aid beyond student loans won’t happen for them,” states Reyna Gobel, contributor to Forbes. “Thus, they may skip filling out the Free Application for Federal Student Aid (FAFSA) out of fear it’s just a fast track to student loans. But that’s just not the case.”

Therefore, it is important to fill out an application to ensure that you don’t miss out on any of the potential sources of income to pay for college. Even if you do not end up qualifying, your application helps provide data that makes the program run smoothly.

“Not only will filling out the FAFSA provide information to schools to help students get other need-based scholarships and grants, but middle class families may qualify for Pell Grants without realizing it,” states Gobel.

A change that went into effect on July 1, 2012, stipulated that it was only possible to obtain funding from a Pell Grant for a maximum of 12 semesters. That is equivalent to roughly six years of school. You don’t have to worry about reaching that limit without being aware, however, because you will receive a notice if you are getting close.

Federal Pell Grants are a great source of funding for students and their families, making the application process well worth it. You can learn more about completing the FAFSA application at

If you have any questions concerning student loans or are looking for other ways to help finance college, be sure to stop by today.

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How Setting Savings Goals Can Help You Save Money

Focus your attention to get the job done

Just like with life in general, Budgetingsetting goals for savings can make you much more focused on the task at hand and therefore more successful in reaching those objectives. But how and where do you get started on your savings goals?

A step-by-step process can help you discern what you want most out of your money. Follow these five steps to stay focused so you can watch your savings grow and achieve your dreams:

1. Make a budget – Taking into consideration what you earn each month versus your expenses, create a monthly budget. This will help you figure out how much you can afford to save. The reality is that goals mean nothing if they aren’t legitimately feasible.

2. Define your goals and name them – That may sound silly, but placing a specific tag on an account will help you stay focused and reach your goals faster, say the financial planners at The Money Advice Service. Seeing the deposit amount rise in your “Mustang Fund” will help you stay motivated, whereas keeping a watchful eye on Account No. 280599 may seem depressing.

At the same time, come up with a target number. How much money will you need for a down payment on that brand new Ford, and just as important, by when would you like to be riding around in your new whip? Research by National Savings and Investments of the United Kingdom has found that people who set savings goals save up to £550 a year (which is more than $865 in the United States) more than people who don’t, and they also save that amount at a faster rate.

3. Clarify your priorities – You likely have more than one item for which you are saving up. In conjunction with defining your goals, you will need to decide how much of that money you budgeted for will go toward which goal. When you set goals, you need to make choices, and that means prioritizing which ones are most important.

4. Consider the best products, places and strategies for saving – Your timetable will likely help you with these decisions, along with how much risk you want to take with this money. For example, The Money Advice Service recommends:

  • For a short-term goal (up to five years), you want a savings product like a savings account, high-yield savings account, money market account or CD.
  • For a medium-term goal (5-10 years), use a savings product, or consider investments, depending on your goals and risk appetite.
  • For a longer-term goal (10+ years), you should consider investments like stocks, bonds or federally insured IRAs. These tend to provide protection from inflation over the long term.

5. Utilize automatic transfer – Financial institutions suggest that customers use online banking to schedule automatic internal transfers to savings, as they make banking much easier. There are many options for setting up internal transfers using online banking. You can choose how often you want to transfer the money and to which accounts. In fact, setting up multiple accounts for your various goals will help you stay focused as well. If your money isn’t in checking, you’re also less likely to spend it.

By adhering to the above steps, you will find hitting your savings goals to be much easier and less stressful.

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Should You Take a Gap Year or go to College Right Away?

The pros and cons of waiting before enrolling
For an assortmentStudent looking at books of reasons, a number of graduating high school seniors opt to take time off before enrolling in college classes. Taking this “gap year” is beneficial in many ways, but it also could be a hindrance. Before deciding, educate yourself on the advantages and disadvantages of taking a gap year.


  • It allows students to recharge after years of the academic grind. In fact, Robert Clagett, former dean of admissions at Middlebury College, saw a higher GPA by up to .2 for students who took a gap year.
  • It gives students more time to gain some perspective on where they are and where they want to be in the future.
  • Many students use the gap year to gain valuable work experience or volunteer, which are not only great resume-builders, but also result in increased focus and maturity — both crucial aspects for the life of a future college student.
  • Working full-time can help students save up for the large costs associated with college — i.e. tuition, room and board, books, etc.
  • Barring extreme circumstances, most students can pick up their education right where it left off after a short break.


  • Those who wait before applying or enrolling can lose access to important resources such as guidance counselors and scholarship opportunities available to those fresh out of high school.
  • According to a recent article in Time magazine, many parents worry that once their child steers away from the typical track, they’re less prone to go back.
  • Gap year’s can be expensive as explains, “Even with a clear cut and properly executed plan, opponents say a gap year can be expensive, adding to student debt and sometime[s] making college harder to afford.”
  • Starting a year later means finishing a year later, further pushing off the actual start of your career, and with a competitive job market, this could set you back even further.
  • Your skills could suffer with the time off. Bradford Holmes of Varsity Tutors noted, “If you don’t feel burned out, it may be best to continue your schooling without a break and maintain academic momentum.”

Planning for a successful gap year
If you do decide to take a gap year, it is important to be fully prepared to avoid the negatives that may come, and to develop a clear plan on action. Start planning ahead by speaking with high school and college counselors and having an internship, job or volunteer opportunity already lined up. You can also meet with lenders of student loans or grants to help ensure your gap year won’t turn into a horror story. Regardless, your decisions will have tremendous implications on your future. The positivity or negativity of those effects is all up to you.

There is no wrong choice when it comes to taking a gap year. Draw your own conclusion, but when the time comes for financing your college education, stop by and see the options we have for you.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.