A View from the Top @ Student Loan and Debt Management

For those struggling with student debt, this is for you. You’ve studied and worked for years for a better future, only to come out the other side with a bill that could be as high as $54,708.52.

This debt often means holding off buying a car, a house, a holiday, or even starting to invest and build your personal wealth. Here’s how to manage your student debt so you don’t miss out on the lifestyle that you’re working so hard to obtain.

Here’s a Simple 3-Step Plan to Kick-Start Your Plan for Sustainable Wealth

Step 1: Get the Full Picture

You need to get a full picture of your fixed debt. Write it down. Start with your student loan, then list every other fixed debt, such as mortgage and car loan. Be detailed: include how much you owe, to whom, and for what. Don’t forget to include the interest rate on each piece of debt, a key stat. A deeper step includes understanding any potential tax deductibility of the interest, which will get you your after-tax interest rate. Add it all up to a single figure. This is a key mountain to climb, but knowing the total is the first step to conquering it.

Step 2: Formulate a Plan

Next, create a variable debt picture by listing your credit card and other mandatory monthly household expenses. Prioritize your variable debts by which you can realistically reduce and clear out, focusing first on those with the highest interest rates. Note: most forms of variable debt (like credit cards) are often unsecured debt, which means they come with much higher interest rates than fixed debt (which tends to be secured debt). The higher the interest rate, the quicker you should pay it off!

Create your personal cash flow statement (a.k.a. budget). List your various income sources and reduce all income to a monthly basis. From here, it’s a balancing act: line up all your mandatory monthly expenses (like rent/mortgage, health insurance, utilities, etc.), and don’t forget taxes (Uncle Sam always wants to get paid first!). Hopefully, there’s remaining income to service your fixed and variable debt, and now its time, start paying off your debt. Remember, clear out the highest interest rate debt first!

Along the way, you must look to protect yourself and your family against an emergency cash need. So, part of the planning process must include creating a fund for this purpose which, of course, is a reduction of income to apply against debt service. The general rule of thumb is that an emergency fund should be enough to cover 3-6 months of essential living expenses (house payments, food, and utilities by example). But, this should also be custom-tailored to your unique needs.

Step 3: Get Help

All the planning and research in the world can’t account for having the right person in your corner. When your toilet breaks, you call a plumber. When you’re sick, you call a doctor. Each a professional in their own right. When you have sufficient income so debt and expenses can be brought into line, then it’s time to start thinking about building sustainable wealth! Ask any person in this position, that’s when most engage a professional financial advisor. Someone you can trust. Someone you feel simpatico with. Someone whose expertise is knowing about money, long-term investing, the ins and outs of the stock market, and so much more. The decision is yours and yours alone.

Why Choose Julius Wealth Advisors?

At Julius Wealth Advisors our boutique service that delivers concierge advantages was created with precisely the above scenario in mind.  We understand the challenges you face and are committed to guiding you through the game of wealth-building with transparency, honesty, and passion. When you think the time may be right to consider a financial advisor, we’re just a click away at www.juliuswealthadvisors.com. Remember, building wealth is by choice not chance.

Disclosures:

This piece contains general information that is not suitable for everyone and was prepared for informational purposes only.  Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov.