Six Ways Student Debt can Swallow up Your Budget

Chances are you won’t find a single postgraduate in the nation who doesn’t audibly groan and wince like they stepped on a Lego at the mention of “student debt”. The truth of the matter is that student debt actually has even more dire implications than people are aware of. Aside from simply needing to struggle with paying back their personal debt balance, student loan debt impacts your budget in ways that are far more expansive than you may know.

Less opportunity for independent proprietorship

Historically, people have been able to survive periods of economic destitution by starting small businesses to supplement their income. However, due to the costs for college skyrocketing in such a short period of time, the windows of opportunity for you to overcome a saturated job market by opening a small business are shrinking. Student debt isn’t just something that you need to pay back, but also an anchor on the amount of money that you can safely invest into improving your overall standard of living in general. The higher your debt grows, the less freedom you have to use innovative and independent methods for fighting it.

Inability to set aside money for a buying home

In the face of soaring student debt, you won’t have nearly as much of an ability to think about becoming a homeowner. Without being able to set aside as much money as you would if you were debt free, the costs of home ownership will likely be far higher than what’s reasonable. Without being able to escape loan debt, chances are that most postgraduates will have to resign to renting for the rest of their lives.

A much lower chance of getting any other kind of loan

Even if you sweep your student loan debt under the rug and refuse to think about it, student loan delinquency is never invisible. Your inability to pay back a loan will be recorded and have a direct effect on your credit score, which will essentially blacklist you from all credit unions that bring it up. Due to the difficulty of getting any loans, student debt can end up forcing you to pay for just about everything in cash.

Your retirement will be hindered

Obviously, when you’re so focused on keeping your head above water with your student loans, there are other responsibilities and needs that just go untouched. It’s not news that it’s becoming more and more difficult every year for Americans to make retirement their priority, but what is new is the amount of debt that young adults are having to take on to help pay for a degree

If there’s one piece of advice that young adults need to take is that if your employer has a 401K plan, and they have a matching program, you should probably take advantage of it. Retirement advisors agree that the optimal time for Americans to start saving is 24 or 25. Even if it’s only $50 a month. Save.

Budgeting for student debt

Despite the reality of how daunting student debt can be, it isn’t impossible to successfully fight against it with the right budgeting techniques. The first step of the process to to simply come up with a budget in the first place, which is many people may initially find too intimidating to even consider.

Mark off a weekend that you can sit down and identify all of the specific ways that student debt could potentially interfere with your personal ambitions; there is generally a six-month grace period allowed after graduation. Even if six months have already passed, you can still benefit from working the budget out as soon as possible.

Determine a monthly payment amount, and make a commitment that you can reasonably maintain. Even if you can only pay back a small amount at a time, anything is better than nothing at all. Calculate any payments on private student loans that you may have as well, and be sure to consider talking to any private lenders who may be able to guide you in the right direction.

After you know how much you’re going to be spending on loan repayment on a daily basis, take a moment to see how you budget can be reconfigured to accommodate it.

Protecting Your Property: Should Renter’s Buy Tenant’s Insurance?

Home insurance is often a product that is not always viewed with much enthusiasm when the renewal notice comes through, especially if you have not made a claim for some considerable time, but you pay up in the knowledge that you can’t afford to take any chances and leave yourself uninsured against something going wrong.

If you are renting a property rather than being the owner, you know that the homeowner will pick up the tab for home insurance, but their policy will most likely not give you the coverage you want for your items, so should you consider buying tenant’s insurance?

If you are looking to buy or rent a property, you can view Taylor Estate Agents website amongst others, but if you are renting, here is a look at the pros and cons of renter’s insurance.

A fact of life

If you viewed insurance as a necessary evil you would not be alone, but love it or loathe it, there is no question that having some cover in place to protect you against a problem, whether it is your health or your possessions, is something most of us want.

You might argue that some insurance cover is more important than others, such as life and health insurance, leaving a product like renter’s insurance further down the pecking order, and perhaps making you wonder whether you want the expense of it at all.

Just as needing insurance cover and having to pay for it is a fact of life, having your laptop stolen or some of your property damaged, is also something that could well happen to you at some point.

What does renter’s insurance cover you for?

If you are a tenant, you will expect the landlord to have suitable property insurance in place, but the primary purpose of renter’s insurance is to provide cover in case your possessions are damaged or stolen.

A typical renter’s insurance policy will provide protection against loss or damage for the contents of your home that you own, and that cover often extends to cover some of your belongings when you are away from home as well.

It is never a good idea to assume that your landlord’s insurance provides you with cover for your possessions, so your first task when considering whether to take out renter’s insurance, is to find out what your landlord’s building insurance policy actually covers in terms of what you own in the property.

Liability protection

You will obviously want the peace of mind that an insurance policy can provide regarding your possessions, so that you know you are covered against financial loss, but there is another important aspect attached to having your own policy, which could prove invaluable.

As part of the cover you get with renter’s insurance, you will get liability protection.

This means that if someone is injured in the property, or maybe a dog that you own ends up biting someone, who subsequently sues you, your insurance cover should take care of the legal costs and any damage settlement, in the majority of cases.

Pros and cons

The pros and cons attached to renter’s insurance are fairly easy to identify.

The most obvious advantage of having this insurance cover, is the financial protection that you enjoy, knowing that you will be compensated for your loss if your personal items are stolen or damaged.

The clear negative about renter’s insurance is cost. Paying premiums can be viewed as wasted money, if you end up not making a claim. Add in the fact that there is often a deductible, which could potentially wipe out what you can claim, and you may decide that it is not worth having.

Having a high deductible means that some items you claim for could be worth less than the amount you can get back on the insurance payout, so you can adjust the figure, but that will mean that your premiums rise.

Putting all the relevant pros and cons together and also finding out just what sort of protection that your landlord has already paid for, will help you to decide whether renter’s insurance is a good fit for you or not.

You may well find that the sort of policy you need works out to be fairly inexpensive, but you have to work out how much your possessions are worth and whether the cost of protection is worth it to you.

As a general rule, it is likely that renter’s insurance should be worth having, especially if you bundle it together with some other policies so that you get a better deal, even if you consider it to be a necessary evil.

Jay Ashton has always worked in the real estate business in one form or another. Recently able to get into property investing after an inheritance, he has started to write articles for the up and coming landlord.

Cash Control: Small Steps That Make a Big Difference in Your Spending Habits

There is no need to pretend, for many of us, the idea of sitting down and creating a personal budget and accounting for every cent you spend, is about as exciting as watching paint dry.

You will probably swiftly change your opinion on that chore if you actually put yourself through the seemingly tortuous task of working out where your money is going, and suddenly find the sort of savings that can make it feel like you have had a pay rise.

Short term loans to tide you over can sometimes be a big help to your finances, and you get information from Captain Cash about that, but it also makes sense to try and gain a greater level of control over your cash, by looking at your current spending habits.

Keep it simple

It is a natural human response to feel a bit stressed when faced with something unknown, which is probably the sort of reaction plenty of us get when the latest credit card statement finds its way to you through the mailbox.

Making even a simple budget, will instantly help to ease your anxiety, if you can see what is coming in and what is going out each month. Crunching the numbers and seeing where your cash is going can be a real wake-up call and will quickly reveal whether your spending habits are out of line with your income.

It seems that many of us either don’t keep any kind of budget at all, and an equally large percentage of us tend to keep one in our heads, trusting instinct to know where they stand financially at any given point in the month.

Even a simple budget written down on a sheet of paper listing all your monthly outgoings and adding up your credit card spending, will often be revealing enough to stir you into some sort of action to review your spending habits.

Cash encourages restraint

We get closer to a cashless society with every year that passes so it does feel a bit strange to get a pile of cash out of the bank and try to live off that instead of using your cards, but you will be amazed what a difference it will make to your spending.

Numerous studies have often come to the same conclusion that most of us would be willing to spend more on something like a ticket to a game or a concert for example, if we pay by card rather than using cash.

It is so easy to just wipe your card and take your purchase, but if you have to pay cash for everything in the store or on a night out, you will almost certainly feel like you are actually spending real money and as a result, show a lot more restraint.

Try allocating some cash for groceries, entertainment and other routine purchases. Make a weekly budget on what you want to spend in each category and can afford, then leave the cards at home.

Your basket at the grocery store will probably not be overflowing with treats that you probably don’t really need anyway when you pay with cash, so try it and see what a difference it can make, or at least adopt the mindset that you are paying with real money not plastic, next time you are shopping.

Do you know if you are overspending?

You will have a certain financial personality that can probably be defined in a particular category, even if you don’t think so.

It might be for example, that you are a serial overspender. Ask yourself some searching questions about your financial habits and situation and you will probably get the answer.

Some of the classic signs of an overspender are when you are still paying bills from purchases that you made at least 12 months ago, and another common trait, is to always use credit cards instead of cash, even when it is a small purchase and you had the change available in cash.

Another classic warning sign is when your checking account is frequently overdrawn and also when your paycheck gets swallowed up each month, leaving you with an anxious few days or weeks as the month progresses, before you get another injection of funds.

If you are often running out of money completely and find that even a minor unexpected expense can cause chaos, there is a good chance that you are an overspender and need to commit to doing that budget as soon as possible.

It often takes only a few small steps in the right direction to put your finances on track, and this can make a big difference to your spending habits and improve your financial position quicker than you might imagine.

Eloise Poole has worked in finance all her working life, first in the credit department, then moving into a general personal finance consultancy role. She wants to help people succeed with their finances and spends some of her free time writing personal finance articles.

Don’t Take the Deal: Three Alternatives to Payday Loans

There is no question that you do have to behave responsibly and employ some clear thinking about your financial situation, if you are contemplating applying for a payday loan.

If you need a short term loan that gives you more flexibility on the repayment date, there are services like Moneyboat UK and other similar lenders, who do offer an alternative to getting yourself into a payday loan scenario.

Payday lenders under pressure

The fact that some payday lenders have attracted the attention of the Competition and Markets Authority, who are proposing that these lenders list their interest rates on price comparison sites, is an indication of the high cost of this form of borrowing.

One of the main concerns about these payday loans is that due to the very high interest rates they normally charge, any sort of default or late payment could very quickly escalate into a scenario where your financial situation worsens, as you try to service a higher level of debt.

The Financial Conduct Authority produce annual figures on the level of borrowing associated with payday lenders and lending levels are in the region of £2.5 billion, with some borrowers signing up for as many as six payday loans during a 12 month period.

With the interest rates being charged by payday lenders coming under scrutiny, consumer groups tend to suggest that you need to file this sort of service under the “last resort” category.

There are normally a number of viable alternatives, so here are some options to consider.

Start out on the credit repair route

A number of borrowers are likely to view payday lenders as their last option, especially if they currently have a poor credit history and their options are therefore limited.

If your credit file is not exactly perfect, that will limit your borrowing options to a certain extent, depending on how bad the information on you is. If you have missed a few payments, this can be viewed more leniently than if you have court judgments for example.

Your goal should be to try and repair your credit score so that you can qualify for more lending options. Having a better credit score will often be reflected in the interest rate that you are charged.

One way to get on the credit report road to recovery would be to apply for what are referred to as “credit repair” credit cards. These credit cards start off with a low credit limit, which is increased as you demonstrate your ability to make payments on time, so they can give you access to some funds, at a much lower rate than you would be charged for a payday loan, and you improve your credit rating at the same time.

Join a credit union

There are plenty of credit unions around and there may be a suitable one to join in your area.

The benefits attached to joining a credit union, if you meet their acceptance criteria, is that it opens up the possibility of being granted a small short term loan when you need it, at rates that are much lower than a payday loan.

You will find that some credit unions offer free financial counselling if you are experiencing difficulties, and they also offer a savings plan that should allow you to get a bit of money behind you, and might even allow you to qualify for a larger loan through the credit union at some point.

A payday loan from your employer

If you need to borrow some money for a financial emergency and can pay it back from your wages when you next get paid, it makes more sense to approach to your employer rather than go to a payday lender.

Some employers definitely do agree to provide advances on your salary and because this is an advance on money you are due to be paid rather than a loan, there should be no interest to pay.

It is not ideal to start taking money from your next wages payment and if you find yourself needing this help on a regular basis, you should take a good look at your finances to see what you can change.

If you do need an advance until payday, there is no doubt that if your employer does agree to provide this facility, it is a much cheaper option than going to a payday lender.

If you do need to borrow some money, explore the options available, such as short term loans, “credit repair” credit cards or credit union loans, as these should save you a fair amount of interest and therefore allow you to hopefully get your finances back on track faster than you first thought.

Nicholas Krauspe is the Head of Operations at, a London based alternative finance company providing unsecured consumer credit to residents of the UK. Nicholas has over 10 years of operations and management experience in the consumer finance sector.

What is More Sustainable than Living Off your Dividends

When I question whether something is sustainable I think of whether “it” can be responsibly maintained.  The goal of creating a dividend income stream should be to eventually use just the dividends letting the principal continue to grow.  It is analogous to living off the fruits of a tree rather than cutting down the tree itself, dividend payments can eventually provide an income stream that is sustainable since you don’t have to erode the principal.

This post was inspired by an interesting post the other day from a great dividend sites Sure Dividend that explored the idea of dividends paying stocks like a tree,

You start with something small – an actual seed, or a bit of hard-earned money.

Before you plant your seed or invest your money, you have to find the right place to put your tree seed or your money. Throwing a seed onto a rock will not do, nor will investing in a business on its last legs.


Over time, your sapling becomes a tree. It now is producing seeds of its own. Your dividend stock’s payments have grown over time. In both cases, the cycle begins anew.

The tree’s seeds beget more trees. The dividend stock’s dividend payments are reinvested into other high quality dividend growth stocks.


Once your first tree produces other trees, eventually you will have a forest of trees – let’s say they are fruit bearing trees.

You can now happily live off the sustenance your fruit trees provide.

Dividend stocks are the same way. Over time, your dividend income will grow. You will be able to live on the dividend payments of your dividend stocks.

Your Goal Should be to Live off the Dividends and Leave the Principal

Every time you eat into principal you are affecting your future income.  If you have a $500,000 portfolio yielding 4% ($20,000), but you sell another $20,000 of principal you are looking at $480,000 if that were to yield that same 4% (ignoring the growth of the underlying assets) you are looking $19,200 the following year.  Again, this is compounded when you still need that same $40,000 (now it is $19,200 of dividends and $20,800 of principal0.  In addition to the natural erosion of principal the problem compounds itself if it is a down year.

I am not sure if I’ll ever be able to a large enough portfolio where I can solely live off the dividends, but it’ll be a nice part of the income investments I’d like to create over the next few decades.

What Do I Need to Do Before I Move to My New Condo?

New buyers of Montreal condos instinctively know what a great property and investment they have on their hands. For that reason, one of the things that they immediately think about is what they need to do before they move in to their condos.

After all, if you’re a new buyer, it wouldn’t make sense to simply move in without any regard for important matters you need to be sure about beforehand.

So, here are some quick reminders to put your mind at ease as an owner of a new Montreal condo.

Take Security Precautions

Although you trust your condo developers, it’s always wise to put a premium on security – for yourself, any condo companion you may have, and of course, your property.

The easiest way to do this would be to change your locks and to put deadbolts.

Remember, if you are not a hundred per cent sure about your locks and your keys, then, take this simple precaution. Security should always be a top concern before you move in.

Know the Location of Your Main Water Valve and Circuit Breaker

In the excitement of moving in, you may overlook to familiarize about two of the most important things in your new condo: your main water valve and your circuit breaker.

This sounds like a very simple concern, but you’ll be thankful you know where they are, and you know how to turn them off or on, especially if an emergency happens.

It’s best to be prepared.

Give Updates on Your New Address

Important and trusted people in your life need to be informed about your new address. However, remember that something as sensitive your new address should never be discussed in public, especially social media.

As much as possible, give the information personally. And, for additional safety and convenience, inform those who send snail mail to you, such as your bank, about your new address.

Arrange for Internet Service

Connectivity is already a nearly inescapable part of modern life. This makes having the continued ability to go online in the comfort of your new condo a must-do before moving in.

Ensure You Already Have Power and Running Water

Moving in to a new condo only to find out that your utilities are still not ready for you can be terrible. That kind of scenario will be so stressful and fatigue-inducing in the long run, as you waste time following up.

So before you move, see to it that you have running water and electricity ready for your use.

Pack Your Small Essentials in a Separate Box

It’s a basic move to put your possessions in packing or moving boxes. Everything you own has been categorized and grouped accordingly, and placed in its own box.

But what about your essentials, especially for your first night in your new condo?

Don’t stress out going through a huge box, looking for a small but essential item you might need to use immediately. Instead, pack all your small essentials that’s for your use on your first night, in a separate box.

Following these simple steps will give you, like all the smart new buyers of condos, a great and less stressful experience when moving in.

The Thai Townhouse: An Attractive Compromise

When it comes to choosing a home for the future, one oft-overlooked example of a viable option is the little townhouse. Between the countless offers for beautiful three-bedroom bungalows and luxurious condominiums within an hour’s commute of the city center online on sites like DDProperty and in newspapers, there lurk the posts for the little townhouse – also known as the terrace house.

Originally a European idea, terraced housing basically had one real requirement – it had to be compact. Really, really compact. In a time when condominiums simply weren’t architecturally or economically viable for anyone, let alone the working class, people began to build townhouses instead.

And the concept worked really well. It became common throughout Europe and its colonies – and today, most developed and developing nations in the world use the townhouse model. But it’s not just a model for reducing the effort and cost associated with a house and lot, or bypassing the costs associated with funding and building a condominium – townhouses can be luxurious and comfortable places to live in, especially for young couples and retirees.

As Thailand’s housing market continues to do well, townhouses in the outskirts of metropolis and special economic zones such as the ones reported on One Asia news will continue to drop in price. And as per World Bank, Thailand has many other projects slated for the next few years.

If you’re looking for a home to invest in, or a house to buy, then chances are that you’ll find exactly what you need in a cozy little townhouse – and here’s a couple basic ideas why.

They’re Easier To Maintain

The basic gist of a townhouse is that’s it’s a small house without much of a lawn and shared walls. That means that within your two walls (since the other two are shared), you have the freedom to maintain your home as you please – much like in a single-dwelling home, also known as a house and lot.

If you’re living in a condo, on the other hand, your monthly fees would include maintenance for your unit and others – and you’d have to pay them month after month. This means that your association fees within a townhouse community are generally lower than those within condos, and you can deal with the upkeep of your house’s exterior as you please.

You Change A Lot – But Not Too Much

Owning a townhouse basically means controlling much of it – but not everything. You can replace your furniture, tear out a dividing wall in the kitchen, and replace the front door – but you can’t do anything that would compromise the integrity of the entire row’s structure.

Furthermore, how much you can really do depends entirely on your Homeowners Association. Some HOAs are fine with a little modification – others are strict in making sure you maintain the uniformity of the homes, even as the principle owner.

Since townhouses are stringed together, each one plays a role in keeping the other structurally sound – that includes a continuous fence, shared walls, and often a shared roof. Modifications to any of these are typically not allowed.

Access to Shared Amenities

Like a condominium, living in a townhouse means being a member of that townhouse’s Homeowners Association, and the Homeowners Association typically uses association fees to install and maintain some basic amenities found in high-quality communities, such as a well-maintained shared pool, a tennis court and basketball court, and other such amenities.

The HOA may also cover maintenance for parts of a townhouse, such as the paint on the walls and your fencing. However, being the owner of a townhouse doesn’t mean you don’t have to worry about insurance payments. In Thailand especially, getting some flood protection isn’t a terrible idea – and depending on the tectonics of your area, earthquake protection can be a necessity as well.

You’ll Have Your Neighbors Close

This can be a pro, or it can be a con – or it can be both at once, varying now and again. On one hand, having your neighbors closer can help you foster a more pleasant relationship, and a greater sense of community. Neighbors don’t have to be a nuisance – they can be good friends, great company, and an essential and integral part in your social life.

On the other hand, obnoxious neighbors can be the antithesis of a peaceful life. It’s best to always check your prospective next home – and its neighbors – before you make any purchasing decisions. Always get someone to inspect the state of the home, and speak with your possibly fellow homeowners to get a feel for the community.

A townhouse doesn’t have to be a permanent thing – you can own one until the time comes to upgrade to a condo or house, or like a condo, you can rent it out once you feel like upgrading to a single-dwelling home.

Owners Live By the CC&R

Once again, this is a boon and a bane – although it is mostly a boon. Townhouses, like condominiums, have what is called a CC&R for the most part. The covenants, conditions and restrictions are a community-specific document that all owners have to co-sign and agree upon, outlining the strict rules of the community for homeowner conduct.

While the restrictions may be annoying, they also ensure that you get the most out of your townhouse – that is, a happy co-existence with other owners on a cost-effective budget.