One of our favorite GoGirl Finance experts, Manisha Thakor (founder and CEO of MoneyZen Wealth Management), was a guest on last week’s Chelsea Krost show tackling the subject of student loan debt as well as other tips on budgeting and personal finance.
The balance of federal student loans nationwide is $902 Billion and the average college student graduates with $27,000 in student loans. This, combined with a challenging job market means that increasingly, students are turning to extreme measures – egg and sperm sales as well as parents offering to sell body parts! – to help pay down debt. Manisha notes that this shows how strongly people value education but is keen to stress that there are fortunately less drastic measures people can take.
For starters, Manisha recommends checking out the wealth of information here on GoGirlFinance.com to get educated about money (in fact, check the links at the bottom of his post to read some of our latest posts on this very topic).
How to budget without feeling restricted.
Budgeting isn’t sexy and Manisha recognizes that it’s also important to not feel deprived when you’re trying to manage and pay down your debt. One tactic she suggests is using an “hourly rate” test to determine if an expense (or a splurge!) is worth it. For example, if you can make $15 an hour and want to buy something for $150, do the math. Is the item worth ten hours of your work? Do you want it “ten hours bad”?
Discipline, not just the lottery, can make you a millionaire!
As you probably know 401Ks and IRAs accounts have special tax benefits that can hep you save for retirement. Here’s the exciting part – if you are 25 and save $5,000 each year in one of these tax-deferred vehicles, earning an average 7% return per year, by 65 you will be a millionaire. Yes, really!
For more tips from Manisha and Chelsea, check out the full episode here.
Also check out these posts from GoGirl Finance on paying down your student loans.