If you are anything like us, you have burning questions that you want answered. That’s what the Ask the Expert series is all about – it’s a chance to get questions answered by local experts.
Today, we’re turning to our friend Ruth Ahnen with Modern Woodmen of America. She is answering a question that many of us have – where do we start when it comes to saving and paying off debt?
And if you have a question you want answered, feel free to leave it in the comments or email it to us at [email protected] Your question may be answered in an upcoming post.
How do I save for the future when I’m still paying student debt?
A spending plan can help lower student debt while saving for the future.
It all makes sense when Brittany’s parents talk about the importance of saving for her future. She just doesn’t see how it’s possible while living on her own and trying to pay off tens of thousands of dollars in college loans.
Like many young people, Brittany feels daunted. She thinks of saving for retirement, a house, or even an emergency fund as distant opportunities.
Fewer than 60 percent of people ages 20-31 have a “rainy day” fund for medical expenses and car repairs.
Of those with savings, a third doesn’t have enough to last even two months. (LIMRA, 2012)
You might feel you’re too young, but time is on your side if you start saving now – while you’re young. You’ll have many years to earn interest on your money – and interest on the interest that money earns. Waiting will mean you’ll have to set aside more of your money later to reach the same goal.
I can help you come up with a spending plan to pay down student loans and other debt while also helping you save for later. The advice is free and there’s no obligation.
The best plans are simple and systematic.
- Know where your money is going.
- Decide on an amount of money you can comfortably set aside and have it transferred automatically from your checking account to your savings account. Do not withdraw money from your savings account.
- If your employer matches contributions to a 401(k), it’s like free money. Take advantage and try to increase your contribution every year or when you receive a raise. Don’t cash out your account. Spend wisely and save wisely. The key is finding the right balance.
Ruth Ahnen is a financial representative with Modern Woodmen of America. She helps individuals, small businesses and families to plan for a secure financial future.
Disclosure: Thanks to Ruth for sponsoring today’s post. We at QCMB love working with local businesses to share positive information and make our community a better place to live, work and play.