Top 5 End of year financial aid strategies

Source: FAFSA blog

As we approach the end of calendar year 2010, it’s a good idea to turn our eyes to the future and start thinking about our 2008 financial aid efforts. Here are 5 strategies to help you make the most of the waning days of 2010 with payoffs in the year to come.

1. See an expert. Most community banks and credit unions offer access to a certified financial planner for little or no charge, making them a great, hidden resource for figuring out your finances. Take the opportunity and an hour or two on a weeknight or weekend to see one and review your personal finances. Get a sense for where you are and how your finances are currently set up.

2. Start writing scholarship essays. Scholarship season really starts in earnest in January of each year, and the sooner you can get your applications in to a scholarship foundation, the sooner you can move onto the next application. Do your research for which scholarships would be appropriate to apply to, and download their applications. The most time consuming part of the scholarship search is the essay, so start writing now!

3. Do your budget. January is often thought of as the time to embark on resolutions, but now is the time to plan for those resolutions so you can hit the ground running after the champagne’s gone.

4. Set goals. Set measurable, achievable goals for yourself in 2011, like a scholarship application a weekend. Be sure to have a calendar set up so you don’t miss any deadlines.

5. Get ready to file your FAFSA. The FAFSA process kicks off on January 1, but having your IRS 1040 mostly done will speed up the process, as will doing the FAFSA worksheets. Run through our FAFSA tutorials here on FAFSAonline.com and make notes of where you have questions – then contact your financial aid officer or attend a College Goal Sunday event to get those questions answered!

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3 Student Debt Reduction Strategies

Thanks to the credit crunch, the recent economic recession and the rising cost of education, student debt is more prevalent than ever. Between credit cards and student loans, many graduating seniors will have as much as $50,000 to $60,000 in debt that has to be repaid.
Here are a few strategies that can be used separately or together to curb your debt and get you on track to financial stability and better quality of life.
There are tons of services such as Credit.com’s free debt consultation service that match you up with a licensed and certified financial professional. We always recommend that you consult with an industry professional because they will know all options available to help you get control of your debt.
While most of us have a negative knee-jerk reaction to the word “budget”, the truth is it is ESSENTIAL to managing and reducing debt. Even something as simple as plotting out how much money you are willing to spend on basics like food and entertainment can free up a surprising amount of money in a month to go toward your debt.
To give a quick example, I recently decided that I would buy lunch no more than 3 times per week (I usually buy every day.) I’ve already saved about $50 per week (more if you don’t count groceries) — that’s $200+ a month!
If you aren’t familiar with loan jargon, “principal” is the physical amount of money you borrowed. Interest is figured out based on how much principal you have remaining, multiplied by the interest rate.
Thus, if you pay more than your minimum, the raw total the interest is based on goes down quicker and you pay less money overall. It’s a win-win.
Note — always specify that you want extra money going directly to principal. Otherwise, some banks will sneakily apply it to “future interest” and you won’t be slimming down your payments like you want to.
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