Question

Explain how managing your student loans (or personal loans and debt if you don’t have student loans) can contribute to personal financial success and growth.

Answer 1

Students who are under debt to enrol for higher studies should manage their loans. As students who are under a debt, have a difficult time saving for their retirement and by the time they reach 30, they have not set aside sufficient funds for their retirement needs as compared to people without any loans repayment pressure.Fore example, they have 50% less funds in their retirement plan assets as compared to students without any debt burden.

Ways to manage debt :

Students can cut down expenses on luxury items and other things which are essential for their need and try paying off their loans first and try to pay their monthly instalments on time and avoid being charged for late fees. Money should be spent on wants only after needs have been met. By paying their bills on time they can maintain good credit rating which can help them in their future. If you are unable to pay your creditors then call and  explain your situation and set up a payment agreement. Don’t allow your credit payment to exceed 20% of your monthly pay check. We should avoid borrowing from one creditor to pay off another one.

So, one implements the above mentioned plan in paying off loans, it can help them in their future growth.