Financial Mistakes to Avoid as a Recent College Grad

 

Mistakes to avoid financially as a recent college grad

Mistakes to avoid financially as a recent college grad

Mistakes are unavoidable, but you should be especially careful when it comes to your finances. As you prepare to graduate college, you also prepare for the “real world.” You’ve spent the last four years obtaining as much knowledge as possible in your field, applying for jobs, and writing your resume. Graduates beware, student loans are the second-highest form of personal debt. And with college debts increasing, it is more important than ever to have a smart financial strategy in place. A solid plan will help you avoid as many mistakes as possible.

By taking a step ahead of your peers in choosing wise investments, you can create healthy habits. This not only improves your personal finances for years to come but also avoid future debt issues.

Financial Mistakes to Avoid after Graduation

Financial mistakes can be easy to make, but there are ways you can avoid them.

Mistake #1: Having no credit.

Everyone talks about saving money, and we are no different. Unfortunately, all this talk about savings has college graduates a little hesitant to take out loans or credit cards. This is due to the fear of creating an overwhelming debt they can’t repay. Plus, not to mention, college already creates heavy financial obligations. Furthermore, it is increasingly harder for those under 21 to sign up for a credit card with no existing income. So, what’s a newbie to do? Build your credit history slowly and regularly by opening accounts and using your own credit cards.  Making consistent payments by or before the due dates establishes a good credit history.

Why this is important: When you want to make big, future purchases, like a house, you will have a hard time being approved for a loan. Lenders may require a co-signer or collateral if you have no credit. When I was still in college, I bought my first car with cash I had saved from my summer job. Not long after graduating, I needed to purchase a new vehicle. This proved to be a challenge due to my lack of credit. Over the years, I have been able to develop a favorable credit score by paying off a credit card and the loan for my vehicle. Had I started to build credit sooner, I wouldn’t have struggled so much to get the car I needed.

Mistake #2: Not having a plan.

Having a limited or non-existent financial plan is one of the biggest mistakes recent college grads make. As a poor college student, you are lucky if you have two pennies to rub together as you battle the choice of groceries or rent. When you land that first job out of school though, it can be easy to fall into poor spending patterns very quickly. To avoid this, cut back on unnecessary expenses like going out to eat.  Spend more time enhancing your cooking skills and spreading out your personal purchases. Instead of buying everything for your new apartment at once, budget your expenses over time. Additionally, focus on always paying bills first at the beginning of every month. Then, you know how much is still available in your accounts to last the rest of the month.

Why this is important: Money adds up quickly. So, developing these positive habits sooner can save you not only hundreds but possibly thousands per year.

Mistake #3: Waiting to save and worrying about finances later.

Consider consulting with or finding a financial mentor to help you along this new journey. Waiting to save or pay off student loan debt can cause major inconveniences in your future. Knowing where to invest savings is also tricky, but a certified financial specialist can help you. Try the Digit.co app to automatically save up and pay debts and also try to contact friends from college with a finance degree who may be willing to provide some advice at no charge as they begin their careers.

Why this is important: The sooner you start paying down those student loan bills, the better your overall financial situation. If you were to plug your debt numbers into this student loan calculator tool, you may be appalled at the time frame it will take you to pay it all off. The minimum monthly payments barely cover the interest. Plus, creating a savings account and emergency fund will keep you out of sticky financial situations.

Mistake #4: Not investing early.

Time is the greatest benefit you can give yourself when it comes to investing. Even if you are only contributing a few hundred dollars each year, compounding interest rapidly grows your investments over time. Instead of blowing any extra cash you receive, put it away to help provide some financial security for the future. Try the Robinhood app for this, this is the best app for beginner investors like you.

Why this is important: You are only working against yourself the longer you wait to start investing and planning for retirement. Even with minimal contributions, you can create a significant amount of money the earlier you begin. With a little forethought, you can provide a security net and a nice retirement fund.

By thinking about your future now, you can avoid these common financial mistakes recent college grads make. At the same time, you are also building yourself a nice, comfortable financial safety net.

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Can Collection Agencies Charge More Than You Owe?

The first call from a collection agency can be terrifying. If you owe several collectors, you may even avoid answering your phone. Being in debt and facing collection is already stressful. However,  particularly aggressive agencies may leave you worried after you hang up. You might even be asking yourself whether collection agencies charge more than you owe. If you have been contacted by a debt collector, begin by learning your rights.

Can Collection Agencies Charge More Than You Owe?

Fair Debt Collection Practices Act (FDCPA)

If you feel that a debt collector is being overly aggressive or crossing legal boundaries, you need to familiarize yourself with the Fair Debt Collection Practices Act. The FDCPA passed into law in 1978 to protect consumers at the federal level. Most states have their own laws regulating debt collection practices as well.

In layman’s terms, this piece of legislation limits what actions collection agencies can take against you. First, debt collectors are only allowed to contact you once a day between the hours of 8:00 AM and 9:00 PM. Second, debt collectors must identify themselves when they try to collect what is owed. They must also let you know that any information you give them can be used to aid in collecting the debt. When asked, collection agencies must also provide their company name and contact information. This is especially useful if you are unsure about legitimacy of the company. Check with your state’s attorney general or the consumer affairs office if you have doubts.

During the call, they cannot use harassing language or threats. It is also illegal for the debt collector to contact a third party about your debt unless it is a spouse or guardian. The FDCPA also prohibits the use of social media and questions beyond where you live, work, and your phone number. Finally, if you feel there has been a mistake, you have 30 days to dispute debts once you have been formally contacted.

What are the Collection Agencies Limitations?

Despite the clearly defined terms in the FDCPA, you will still hear testimonies that collection agencies charge more. However, you should take these statements with a grain of salt. Debt collectors must adhere to the terms and conditions you agreed to in the original contract. This is particularly important when it comes to interest rates and fees.

If the contract does not specify a late fee, then you should not see any appear once the collection agency has bought your debt. The bottom line is that the collection agencies cannot charge more than you agreed to pay. The regulations are in place to prevent collectors from vindictive practices and racking up charges if you do not answer the phone.

When Can Collection Agencies Charge More?

The discrepancies in the amount of debt come from applied interest rates. Most loans clearly define interest charges, fees, and penalties in the Truth in Lending Disclosure. Unfortunately, credit cards become a gray area due to variable APR rates. If you read the fine print, there are no set interest rates in the card agreement.

Most collection agencies will not add additional interest or fees once the account is frozen. Adding more fees and interest only increases their losses.  Furthermore, they must send monthly statements if they apply interest after the account has been frozen. Be sure to check your mail if you believe a collection agency is charging you more than is due. If you have not been notified, you may be able to dispute it.

Debt collection agencies are allowed to apply contract fees and interest rates within the statute of limitations, which is ten years. Although is it not usual practice, third-party collectors may charge more than you owe once they purchase your debt. But, it is problematic for collection agencies to add interest charges because it is difficult to prove in court.

After a Collection Agency Contacts You

If you see an inaccuracy or believe you have been charged too much, check your credit report. This will not only tell you the debts you owe, but how old they are. This may be to your benefit if your debt is outside the statute of limitations. Knowing your rights and owning your debt will help you deal with collection agencies. If you feel like it is beyond your control, contact a debt relief agency to see what options are available to you.

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7 Alternative Traveling Jobs for People Who Love to Travel

Traveling Jobs for People Who Love to Travel

Vacation is a great time to travel. But, sometimes it feels too short and is not enough to satisfy your wanderlust. If you have a serious taste for exploring new areas but not enough funds to do it regularly, there is a solution. Traveling jobs are a great way to support yourself when you have itchy feet. Not to mention, there are many different types of opportunities and options.

Whether you are needing to spice up your life or want to change your career altogether, here are some traveling jobs worth checking out for people who love to travel.

7 Traveling Jobs to Consider

1. Teacher/Nanny

So, you love kids, and you’re bilingual? Why not become an Au Pair or teacher in a different country? With a college degree and a TEFL certificate (Teaching English in a Foreign Language), you can teach English in a variety of locations. There are also TEFL course programs you can do abroad. They give you a taste of what to expect while also introducing you to a new country.

With technology making education easier to access online, you’ll have even more options.  In addition to online programs, there are also virtual teaching options. Furthermore, you can even take online classes yourself while completely immersing yourself in the country’s culture. Many universities now offer remote learning and online degrees. Moving abroad will open doors and new opportunities for traveling jobs.

2. Digital Nomad

This term was coined for those who work remotely. These types of job have become even more readily available in 2020 as companies restructure for their existing employees. If you have an online business, you can also build it up so you can work from anywhere in the world. Work as a digital nomad includes but is not limited to: freelance writing, translation, web design, social media management, or affiliate marketing.

3. Athletic Recruiter

Sports enthusiasts will likely find great enjoyment from a job as an athletic recruiter. Not only do you get to travel to schools across the country, but you also get to attend sporting events. The admission to events is free and also part of your responsibilities. Not a bad gig for sports fans, huh?

4. Auditor

If you are an accountant needing some excitement, becoming an auditor may be an excellent option for you. Auditors may not usually go to exotic locations, but they do travel across the country examining businesses. This traveling job provides more stability and consistency than other options while still giving you a taste of life on the road.

5. Tour Guide

Being a tour guide, particularly internationally, is an excellent way to travel for work. If relocating to a different country to work as a tour guide, you first need to know what certifications and visas are required. It is also a good idea to learn the language and familiarize yourself with the culture and customs. Even though you are catering to tourists, you want to have a good relationship within the local community.

6. Bartender

For those with an open schedule and some nightlife experience, bars and clubs worldwide are always seeking bartenders. This is especially true in touristy hot spots. Whether you want to go overseas or simply across the country, there are a variety of options as a bartender to travel to a new location for a while. Depending on your talents and the type of bar, bartenders can also make quite a bit of cash.

7. House/Pet Sitter

Another option you probably never considered was house sitting or pet sitting. This traveling job is precisely what it sounds like. Home owners post listings on house sitting websites to get matched with caretakers. In exchange, you get free accommodations and complete privacy in a locale of your choosing. These jobs can last a few weeks or turn into a long-term arrangement. It also provides the unique opportunity to experience your travel destination through the eyes of a local resident.

Considerations for Traveling Jobs

With the right skills, you can make traveling a part of your job requirements. Moving to a new location can be a very difficult, yet rewarding decision. However, it’s important to note that not all traveling jobs will pay well, and these professions still involve work and dedication. Depending on how much you want to make traveling a part of your career will depend on how much behind the scenes you will need to do.

Do you travel for a living? What kind of traveling jobs have you done or would like to do?

Also, if your doing good with the traveling job, don’t forget to save. Acorns is a perfect way to save money using spare change. Check them out.

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