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From College to the Workplace


Transitioning from school to the workforce brings new responsibilities – and opportunities. Your degree may help you land a job that provides more financial freedom than you ever had as a student. On the other hand, your paycheck may not stretch quite as far as you expected, especially if you are managing education loan repayment, credit card debt, or both. But no matter what your financial outlook is now, understanding the concept of financial health is an important step.

Real Opportunities, Real Consequences
Even if you worked as a student or returned to school after having a full-time job, leaving school means you’ll have more financial responsibility since student loan payments will generally no longer be deferred. As a result, it’s more important than ever to actively manage all of your debt and the stakes could hardly be higher – the interest rate for many loans can be increased dramatically as the result of missed payments. A poor credit report can even lessen the value of the college degree you worked so hard to earn by reducing your employment opportunities.

Strategies for managing education debt will depend on your debt load and income, but for now, the most important thing to remember is that you must contact your lender or student loan servicer if you are having trouble making your payments. Skipping a single payment may have serious consequences that you may not expect or be prepared to handle. At the very least, a missed payment could be reflected on your credit score for at least seven years.

The good news is that the vast majority of college graduates do effectively manage their debt. Federal student loans in particular offer a host of repayment options to suite almost any financial situation – even when a situation changes as the result of a job loss or reduction of income. Being financially healthy doesn’t mean that you never have financial problems. Everyone has setbacks – it’s how you deal with the setbacks that matter.

Five Steps to Financial Health

We’ve identified five steps that can serve as the foundation of your financial fitness plan as you move from school to career and beyond.

  1. Earning - As a student, you spent time studying and not earning money in order to prepare for better opportunities in the future. Part of this trade-off often involves taking on debt to pay for school. As a student it was completely acceptable to spend more than you earned – there’s usually no other option.

    As a working adult, the first step to financial health is to earn more money than you spend. From taking advantage of all employee benefits to moving up the career ladder, maximizing your earning potential will give you more opportunities to save - including saving interest charges by repaying your loans more quickly.

  2. Spending - How you spend money can be almost as important as how much you earn. We’ve probably all been surprised by an unexpectedly large credit card bill, even when there was no one single splurge. Creating and maintaining a spending plan will help you spend more of your money pursuing your financial goals – and less on things that don’t matter to you.
  3. Saving and Investing - If you’re facing a significant college-related debt, the idea of saving and investing can sound unrealistic. But saving enough money for an emergency fund is possible for just about anyone with an income. An emergency fund helps you avoid minor financial setbacks that can lead to expensive loans and long-term problems, like putting an unexpected dental or car repair bill on a credit card. If you can take full advantage of employer-sponsored plans, saving money for everything from a medical emergency fund to retirement doesn’t have to be a major sacrifice (and it may even be tax-deductible).
  4. Borrowing - Education loans are a reality for many recent graduates, but these loans can be a great example of “smart” borrowing – borrowing that builds a lasting asset (in this case, your lifelong earning potential). Unfortunately, it’s all too easy to borrow money for things that are losing value from day one. Whether you borrow for luxuries like a brand new car is a choice only you can make, but applying that hypothetical $300 per month car payment to a $27,000 student loan debt would pay the loan off twice as fast and save over $6,000 in interest (assuming a 10-year fixed payment plan at 6.8% interest).
  5. Protecting - How many Americans did everything right only to lose all financial stability as the result of an uninsured major illness? Far too many. Protecting yourself from avoidable financial risks can mean the difference between financial success and failure – for you and your family. Making sure that you have health insurance and appropriate other forms of insurance is an important consideration both now and in the future.

Making the right choices about money is rarely easy, but the concepts of Earning, Spending, Saving and Investing, Borrowing, and Protecting all offer a “real world” perspective on all of your financial decisions.

Working towards financial health always involves creating a financial plan. Your plan can be as simple as a list of short and long-term financial goals or it could include specific savings goals and career milestones. Either way, a written plan will help you set your course and measure progress along the way.

 Events for Families

FAFSA Updates-South Dakota Department of Labor

Monday, July 24 at 2:00 PM CST
Online Meeting
Host: Cathy Mueller

More Info

Sneak Peek for School Counselors on FAFSA Changes

Wednesday, August 30 at 3:00 PM CST
Online Meeting
Host: Cathy Mueller

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T.F. Riggs High School Financial Aid Night

Thursday, September 7 at 7:00 PM CST
Online Meeting
Host: Cathy Mueller

More Info