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5 Financial Things Everyone Should Do in Their 20s

By U.S. News & World Report

There is no better time to set yourself up for a lifetime of financial success than in your 20s. While this decade may seem daunting as you tick off milestones such as college graduation, starting your first “real” job and possibly marriage, taking control of your finances is an integral part of growing up and becoming a successful and independent adult. To help you successfully navigate your finances, here are five money milestones everyone should strive to hit in her 20s.

1. Start saving for retirement. While retirement may seem a millennium away in your 20s, you’d be surprised how quickly time flies. Start saving money now to allow it to accrue and grow by your golden years. Think of it as letting your money age like a fine wine. As a general rule of thumb, aim to save at least 5 percent of your gross income, with the eventual goal of increasing it to 15 to 20 percent. If your employer offers a 401(k) match program, it’s ideal to contribute enough to maximize the match. Think of it this way: That match amount is essentially free money to fund your future retirement.

2. Set a budget and live within your means. Simply put, make sure you have more money coming in than going out. Overspending is a big financial problem for many in their 20s, landing many in some serious debt down the road. Avoid overspending by establishing a monthly budget based on income and fixed expenses like rent and bills. Don’t forget to include any lingering debt and, if possible, pocket some money away toward savings. Budgeting can be easy. Personal finance apps can put the power at your fingertips, giving you insight to where and how you are spending so you can make smart financial choices.

3. Create a debt reduction plan. Once you have established a budget, it’s time to get your hands dirty and tackle debt. First, make a list of all your debt. Figure out how much you owe, the interest rate of each debt and the minimum payment due. Then review your budget to determine how much you can realistically afford to put toward paying down the debt. If you have more than one bill, start with the one with the highest interest rate while paying the minimums on the rest. Once the debt with the highest interest rate is paid off, move on to the second highest, and so on.

4. Establish an emergency fund. We know, we know, you have already taken care of your bills and paid down some debt, and now we’re telling you to stash away even more money? Well, yes, but for good reason! Setting up an emergency fund will protect you when life hits you with unexpected and, at times, costly expenses. Whether you lose your job, get hit with a big medical bill or your furry friend has to go to the vet, this fund will act as a safety net. Start by saving $1,000. Then work toward putting away three to six months of your net pay. If this still feels too overwhelming, start small and put that spare change to good use.

5. Set a long-term goal. Do you dream of buying a home, traveling the world or sending your unborn children to college? No matter how big or how small your long-term goals are, planning for these life events now will make these goals attainable sooner rather than later. Savings accounts are a great way to achieve these goals, so it is best to set aside that money before you ever see it (either through an automated savings plan or a paycheck deduction).

Don’t put off tomorrow what you can do today. Accomplishing these milestones in your 20s will help to set a strong financial foundation while you are still young and set the stage for a successful financial future.

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5 Financial Things Everyone Should Do in Their 20s originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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