You can manage your debt.
You can get help from approved credit counseling agencies by region, look at the U.S. DOJ list of approved credit counselors. The DOJ regional search does not work as well as I wish., but if you already have a business name, you can verify it here. You can also check out this national organization, National Federation of Credit Counselors. Members of such organizations typically have to meet ethical standards.
Be wary of credit counseling agencies that demand an upfront payment or nonnegotiable donations. Managing debt is easier said than done, but there are some real tips you can use to keep your debt load as low as possible:
1. Try to avoid credit card debt entirely. Don’t use credit cards to pay off your other debts, because most credit cards have a very high interest rate. If you just pay the minimum on your card each month, the interest is rolling up, higher and higher. And you can no longer bankrupt your credit card debt. If you can pay off the entire charge on the card each month, credit cards are fine, but don’t let that debt pile up, and certainly don’t let late fees add to your debt! See MSN on credit card debt, Consumer Defence, Motley Fool (usually an investment site, they have good advice about debt), and Women’s Finance (not just for women! Includes more than credit card debt)
2. Make a monthly budget – know how much you need for fixed expenses like rent or mortgage, utilities, transportation, tuition, books, and groceries. Once you see how much is needed for these non-negotiable, fixed expenses, you can see if you have money left for entertainment, travel or eating out.
3. Stick to your budget. It’s totally out of fashion now, but consider how much lower your debt level will be if you skip the vacations, eat out less or never, and avoid impulse purchases. Pack a lunch, eat at home, don’t buy Starbucks or Dunkin’ coffee. Take walks or bicycle, play games at home or with friends, live cheap! (See MSN article and again, Women's Finance, which has lots of great advice for both genders.
4. Save on tuition costs: If you are able to get a job at your law school or university, many schools offer tuition remission. This is a wonderful deal, where you can take a certain number of classes free. It might take while longer to graduate, but you will have much lower debt. Be sure you balance your schedule so that you have enough time to prepare for class, and have time off to prepare for exams. Having a job won’t be much help if you drop to the bottom of the class or flunk out! But if you can manage, especially after 1-L, it’s a great way to reduce your costs. Ask before taking the job if it offers tuition remission, and whether there is any waiting period. Some schools require you to work full time for a certain period before the tuition remission is available.
5. Take a part time job: Again, be sure you give first priority to your classes. But if you can manage to earn some money while in law school, you won’t be taking on such a load of debt. If it’s a job that will look good on a resume or allow you to network for future job potential, all the better.
But if you have lower student debts, you will be able to be much more flexible in looking for work. Plus, more of what you earn will stay in your own pocket!
Monday, September 24, 2007
You can manage your debt.