Working in the construction industry has allowed me to meet a lot of individuals and fellow coworkers who own rental properties because they’re in the real estate industry every day whether its commercial or residential therefore it’s a perfect synergy. I always thought that rental property was something that only rich people have but I came to see that was not the case, however, the majority of them still had mortgages on the property. This is how I found out that some people created an LLC and transferred the title over to the company to protect their own personal assets. I then discussed the topic with my parents and this is also something they wanted to do to their commercial property and asked me if I would help them. Of course I said yes and it was an awesome learning experience setting up the LLC, writing the quit claim deed and then getting it recorded with the county clerk. Here is my post about the process but it’s tailored to Oregon/Multnomah County so you might have to just exchange the websites for your own state and county.

Step 1: Verify with your Mortgage Lender
I found out through my research that there are some mortgage lenders who have a “due clause” written into the mortgage contract that if the title changes hands then they have a right to demand that the full mortgage amount becomes due. Therefore, it is imperative that you check with your mortgage lender that they’ll allow you to transfer the title from your name to an LLC before you do any of the steps below.

Step 2: Creating an LLC
In Oregon, they have an electronic filing system to register your company therefore it makes things a lot easier – it took me less than an hour. You register your company through the Oregon Secretary of State and follow the prompts. During the process, they’ll also make you sign up with the IRS and get an Employer Identification Number for tax purposes. Once you complete the process, you’ll get a confirmation from the SoS with your “Articles of Organization” and can print out a “Certificate of Existence” to display on your company’s premises – I believe the total cost was $60. Here’s my LLC’s CoE and this along with the AoO will be important documents in the next step.

Step 3: Business Checking Account
The next part is to create a checking account under the name of your business. This will help uphold the “Corporate Veil” where there is no mingling between your finances and the company’s. Any monetary transaction for the property needs to go through this account and that includes rent, improvements, salary (if you decide to pay yourself or someone else), misc. expenses, etc. The majority of banks and credit unions have a business checking option and you should shop around for which best fits the needs of your LLC.

Step 4: Transferring the Title with a Quit Claim Deed
Using a Quit Claim Deed, you’ll be able to transfer the title of the property from you to the LLC. There are specific requirements from your county’s recording office on how these need to be drafted and what information is required. These are the recording requirements for Multnomah County in Oregon:

You can draft the Quit Claim Deed yourself or look up the public deeds at the Recorder’s office and create a similar one – this is what I did. It’s all public information and the county had a nice option where you can just search for Quit Claim Deeds – all you have to do is pay a few dollars to get it printed. Here are some examples that I copied for my own Quit Claim Deed:

It’s very important that you include all the information required by the Recorder or this could mess up your documentation. Luckily, the clerks are very helpful and they helped me a lot through this whole process. Also, if you’re trying to minimize costs then you can limit it to a single page like the first example because each page was a $5 cost and that can add up quickly.

After you get all your documents completed, you just submit them to the Recorder to enter into the public domain and the transfer is complete! The property is no longer under your name but the LLC and if someone decides to sue you then only the assets in the LLC are at risk. I believe this is a very important tool that everyone who owns rental property should look in to. The overall cost of the process was $180 for me and didn’t include my time but it was a great learning experience so I enjoyed every minute of it. If you don’t want to spend the time then you can have a lawyer complete this for you but I guarantee there won’t be one who will complete if for less than $200. If you can find a lawyer who will do this for $200 then message me and I’ll PAY YOU to get it done!

Thanks for reading and good luck!

Disclaimer: This is for general information purposes only. I recommend you consult a lawyer if you want legal advice.

When I first heard about Dave Ramsey’s baby steps there were a few things that I struggled to grasp like his notion that you want to use any excess cash you have to pay off debt so that all you have in your emergency account is $1,000. The second thing was to hold off on ALL retirement investing until you are debt free. However, if you can’t pay off all your debts in 2 years then you should contribute enough to get at least the company match. I’ve read multiple conflicting views on this where some people say the idea is ludicrous and you should still invest up to the company match while trying to pay off debt because it’s a guaranteed return and free money. It’s a generic answer but I believe it is this: it depends – personal finance is PERSONAL therefore it all depends on your situation and how comfortable you are with your current financial condition.

I did a lot of research on Google and there were good arguments from both sides however I decided to run the numbers for my situation and my conclusion also depended on my current financial standing as I mentioned above. Below is a spreadsheet I used to calculate the amount I would be investing in my 401(k), the company match, and how that plays into my goal of getting debt free.

401(k) contributions are pre-tax therefore it makes the calculations for your contribution amount and company match a lot easier. As you can see from above, my annual salary is $63k and if I invested 5% of that (just enough to get the company match) I would be putting $3,154 into my 401(k) while the company would match with $1,577. The company match also varies because some companies might give you the full 5% of salary while others might be less – my company matches 50% of the 5% from years 0-4 and increases as you gain more seniority in the company.

I am losing $1,577 of free money every year by not investing 5% in my 401(k) – I suggest everyone do this calculation so that you have a concrete number that you can visualize. To be honest, I thought it was a lot more than this so I was little shocked when I saw it was only $1,500 bucks. The other big part of this equation is that I’ll also be giving up $3,154 of income (this $$ be lower due to taxes) that I could use to pay off my debt. Ultimately, my decision to stop ALL retirement investing came to 3 factors:

1. The company match was “minimal”
If it was $5,000 then this would be a different story but it was only $1,500! The amount was not substantial enough to dilute my goal of getting debt free!

2. I plan on getting debt-free within 2 years
My goal was to be debt-free by January 2017 and my current schedule shows me being a few months ahead of that. I’m also an avid saver therefore I had no fears of increasing my retirements savings once I’m debt-free.

3. I’m young and already have a decent amount in my retirement accounts.
This is probably the biggest reason because I’m 26 and I have $72k in my IRA and 401k. From my research, I know that amount is years ahead of my peers therefore I was comfortable of where I stood in regards to retirement savings.

I had a lot of trouble deciding on stopping my 401k contribution but at the end of the day I lived by this quote for my debt-free journey:

“If you really want to do something, you’ll find a way. If you don’t, you’ll find an excuse.” – Jim Rohn

I didn’t want to dilute my focus by one atom therefore I stopped my 401k contribution and never looked back. The best way to decide is to do the calculation I did above for your situation and take into the factors that I considered like your age, what’s currently in your retirement savings, and what is the company match policy for your 401k.

Good luck!

If you’re around the age of 24-32 then your Facebook feed is probably getting BOMBARDED with constant updates of babies, pregnancies, and couples who have just got married. Some people are bothered by it but I’m very happy for everyone that they’re taking a big step in their lives and growing up! It’s a fantastic feeling when you’re no longer just looking out for Numero Uno and have a crime-fighting partner who you can trust to take the shot when your life depends on it and who you are more than willing to take a bullet for. However, with the greater responsibility that inherently comes with the territory then the risk also increases. If something happens to you then it just doesn’t affect you but your family and others who are dependent on you. This could lead to more household/family duties for your significant other and a greater financial burden if you happen to lose your job or cannot work. The extreme case of this is when you cease to exist in The Matrix and get erased completely. The emotional expense it will take on your family is incalculable and if you can minimize the destruction in anyway then you should take those necessary precautions. One major consideration should be buying life insurance to at least minimize/eliminate the financial burden on your family.

I use to think I was invincible and cannot die because I am the narrator of this story and everything would end if I died. Unsurprisingly, I’ve matured and eliminated this way of thinking and embraced the fact that my family would have to go on and suffice if anything ever happened to me. Now, I have a little girl to worry about and a significant other who depends on me therefore it was a logical decision to have a safety net in place if anything does happen to me. I must thank Dave Ramsey for getting me thinking about buying life insurance because I figured that I had it through my work and therefore I was covered. THIS IS NOT THE CASE! I looked at the life insurance I had through my company and it was for 1 year of my salary – after funeral expenses, that money would last probably 1-2 years. One story that he keeps telling is the husband who buys life insurance and then a few months later is diagnosed with terminal cancer. We’re all just dust in the wind and eventually we’ll be taken to a greater plain therefore please plan accordingly even though your path is undetermined.My first question when looking to buying life insurance was, “how much do I need?”.

There are many opinions out there and you can Google for them however the one I used is called the DIME method.

• D = Debt – How much money your family will have to pay the creditors when you perish.
• I = Income – The recommendation is 10 X your income
• M = Mortgage – How much do you still owe on your home/properties before it’s paid off
• E = Education – How much does your children need to complete their education

I made a simple spreadsheet for this and determined that my rough estimate is close to $1 million dollars therefore that was the policy I was shopping for. Here is my simple spreadsheet:
The second question is, “what type of insurance should I get?”. The two most widely used out there is Whole Life and Term Life insurance. Whole Life provides you with a coverage amount you set and a higher premium where the additional dollars above your premium goes into an account that builds your “equity”. Dave Ramsey does not approve this method as you can make more money by taking those additional dollars and invest it yourself. Also, life insurance is not needed for your “Whole” life because as soon as you become fairly wealthy then your family should be financially stable enough to handle any money issues. Term life insurance is similar to car insurance where you pick an amount of coverage and a “term” of how long you want the insurance for. This is the one that I went with because, as I mentioned before, you shouldn’t need life insurance for the rest of your life and it provides the best option with the lowest premium.

The next step is to decide where to buy your life insurance. I went to the life insurance broker Zander Insurance, who is recommended by Dave, and they made the process of buying life insurance very easy. You enter in some basic information and they’ll provide you with several quotes from various life insurance companies. I just went with the lowest premium and of course I reviewed the company online to ensure they’re competent and rated a good company by others. Here is the information you’ll have to fill out:
After you choose a life insurance company, a representative will contact you to set-up the health screening and paperwork process. I spent around 30 minutes answering questions with the rep about my health history, my current health status, and if I participated in any dangerous activities like sky-diving, rock-climbing, and/or battling dragons. After that initial health phone call they’ll send a nurse to your house to get blood testing completed. This wasn’t a new process to me because my company does the same thing to determine if you’re eligible for a health insurance discount. When the lab results are complete, they’ll notify you if you’ve been approved for life insurance or not. Finally, they’ll send you your policy to review and sign. Some notable notes I have from reading my contract.

• The policy will not be active until the premium is WITHDRAWN by the life insurance company
• They will withdraw (2) months worth of premium on the initial payment
• The policy becomes incontestable after 2 years
  • If you decide to suicide within those 2 years then the policy could become void
• The company has the right to eliminate the policy without notification if premium cannot be withdrawn due to insufficient funds

Overall, after (2) years your family should have no issue with getting your policy redeemed with the proof of the death certificate. The entire underwriting process takes 3-4 weeks depending what your schedule is like to get the health screening completed.

If you are married, have a family, or have any other person depending on you then take this small step to ensure that at least they won’t have a financial burden upon your death. Nobody wants to think about their death however it’s a thought that needs to be taken seriously if you truly care about the people in your daily life.

2/5/15 and 3/7/15 Update:

I plan on updating this every 2 weeks which coincides with pay-day!

I’ve just started listening to Dave Ramsey and began reading his book “Total Money Makeover” – It has definitely opened my eyes to my financial situation and helped me start thinking about what I can achieve. The thing that he stresses the most is getting out of debt and never borrowing any money. He breaks down his debt-free method into baby steps for you to follow that will help you reach that point in your life where you are financially wealthy and independent. The first baby step is to save $1,000 for an emergency fund – I have this completed already. The second baby step is to start paying off all your debt starting from smallest to largest regardless of interest rate. I’m currently completing baby step 2. I haven’t listed my debts yet but I want to in this post so that I record my starting point and put my goal on paper! Below is my debt from smallest to largest and I will be DEBT FREE!!!

3/20/15:

I did a few things to reduce the debt quite substantially since my last update – the most notable items being taking out $4k of my savings and selling my silver at a  60% loss to pay off debts. I’ve also eliminated a means of income generation by no longer selling plasma due to my parent’s request; no longer selling plasma will cost me approximately $3,600 a year and 5 months to getting debt-free faster. But I’m a firm believer in filial piety therefore I will act per my parent’s wishes. I have also taken the drastic measure to stop my 401(k) contributions however I will re-contribute if I cannot complete this goal in 24 months. My current estimate shows me be doing in 26 months however this doesn’t take into the account the debt snowball method of compounding payments from paid off debt. Note: I don’t update the car balance or the parent loan balance until I reach them.

4/3/15:

I paid off all the student loans in my name!! I got this completed by withdrawing $5,000 from a savings account. I also made a huge dent into the Grace loan and soon I will have her in my hands officially.I’m going to need to start another way of finding additional income to accelerate this debt snowball therefore I think I’m going to start getting more serious about selling things on Craigslist and eBay. As far as progress goes, I’m quite proud of current pace and acceleration. I still have more money in a savings account which I’m saving as a final push for Grace.

4/17/15 and 5/1/15:

I found an additional source of income that is getting me approximately an extra $45/week. I also got my $171 check for selling my $200 Hyatt gift card. I also took out the cash I had in my brokerage account and put quite a big dent into car loan. If I’m moving at this pace, I should have the title for Grace by October!

5/15/15:

Got another additional income by starting to drive for Uber!! My first night I made $106 in fares and I get to keep approximately 74% of that so not bad for 3.5 hours worth of work! This should hopefully speed up my date – my new goal is to be done by December 31st, 2016.

5/29/15:

I got a nice bonus from Uber for $100 by completing 10 trips and also sold my broken Xbox 360 for $40. The other side job also netted me an astounding $150! Unfortunately, I did not work for Uber this weekend therefore that will affect next weeks debt update but perhaps I’ll make it up by working extra this Friday.

7/10/15:

I paid off my car loan!!! I finally have my first piece of property in my car and it feels great to not have another car payment even though the car was a very dumb decision by me! At least it’s a car that I absolutely LOVE! Paying off my 72-month car loan in 9 months definitely felt like a fantastic success. I don’t owe a dime to anybody underneath my name and now I’m onto erasing that debt that my parents took to put me through college. I haven’t driven for Uber in over a month but my start soon just so I can really start eroding this debt mound.

8/21/15:

I sold all the stock in my brokerage account and used the money to pay off debt. The majority of the capital to purchase those stocks came from my student loans so it was basically borrowing money to buy stocks, as Dave would say. This made a huge chunk in my debt levels ($9,500) and shortened my duration by 3 months or so. I’ve still been too lazy to drive for Uber and have been saying every week that I’ll start but I’m just so tired… My main goal now is to finish before I start my part-time MBA at PSU so that I can save up money to cash flow the books and tuition while I wait for the tuition reimbursement to come in (I don’t get it until I get a C or better in the class and provide documentation).

10/25/15:

Wow it’s been a long since I last updated! Well nothing new has really happened – I’m just keep on keep’n on. Oh, I accidentally paid $400 into the wrong student loan! This is truly a grueling physical and mental marathon but I’m so close I can see the finish line! I picture myself taking my family out to a nice restaurant after I finish because they have supported me 100% along the way and have also made many sacrifices to help me with this goal. I also envision myself going on the Dave Ramsey show and doing my DEBT FREE SCREAM!!

12/25/15:

Dang, it’s been exactly 2 months since my last update but a lot has happened in that short time that has accelerated my debt free snowball! I’m at that last 0.2 miles of the marathon and I can clearly see the finish line but your body is aching and every step is difficult but I’ve too far to give up now so I’m going to power through! The biggest snow angels I added to my snowball was a credit for my CarMax warranty, a Turner bonus, and an unexpected Ecomunnity bonus! I’m down to the last 2 months and I can’t believe I’m soooooooo close!!

01/22/16:

Holy poop!! I can’t believe I’m only 1 paycheck away from being debt free!!! I can actually be debt-free right now because I have the money in my savings account but I decided not to for a few reasons with one being that I might need it for taxes. Also, my next pay check will be on 2/5/16 which is the exact same date one year ago that I started to start this debt-free journey and change my life. My new saying for this journey is that I sacrificed a year of my life for an eternity of freedom.

1. $432 – Phone bill Paid 2/11/15
2. $1,645.05 – Student Loan Paid 3/6/15
3. $1,681.75 – Consumer Paid 3/6/15
4. $2,556.99 – Student Loan – Paid 3/6/15
5. $3,046.90 – Student Loan
5a. $1,748.43 – 3/7/15 Paid 3/17/15
6. $3,351.61 – Student Loan Paid 3/17/15
7. $4,433.71 – Student Loan
7a. $2,052.29 – 3/20/15 Paid 4/2/15
8. $18,968.45 – Car Loan
8a. $14,142.44
8b. $8,8188.63
8c. $6,572.57
8d. $4,260.49 Paid 7/6/15

9. $44,089.00 – Student Loan (It’s under my parent’s name but they gave me the opportunity to change my stars therefore I have no qualms about paying this back for them – broken out below).

9A. $4,493.34 Paid 7/24/15
9Aa. $2,867.71
9B. $8,513.88 Paid 8/21/15
9C. $9,792.23
9Ca. $5,817.24 Balance 8/21/15; Paid 10/2/15
9D. $10,354.67
9Da. $8,015.78 Balance 10/25/15 Paid 12/11/15
9E. $10,934.88
9Ea. $10,432.78 Balance 10/25/15
9Eb. $5,490.02 Balance 12/25/15
9Ec. $888.88 Balance 01/22/16

Original Total = $80,205.46

New Total (01/22/16) = $5,490.02
ETA Pay-off (02/05/16) = 2 WEEKS = 2/2016

New Total (12/25/15) = $5,490.02
ETA Pay-off (12/25/15) = 2 months = 2/2016

New Total (10/25/15) = $18,448.56
ETA Pay-off (10/25/15) = 6 months = 4/2016

New Total (8/21/15) = $26,836.38
ETA Pay-off (8/21/15) = 9 months = 5/2016

New Total (7/10/15) = $42,172.00
ETA Pay-off (7/10/15) = 14 months = 9/2016

New Total (5/29/15) = $48,312.71
ETA Pay-off (5/29/15) = 16 months = 9/2016

New Total (5/15/15) = $50.624.79
ETA Pay-off (5/15/15) = 19 months = 12/2016

New Total (5/1/15) = $52,240.85
ETA Pay-off (5/1/15) = 20 months = 01/2017

New Total (4/3/15) = $58,194.66
ETA Pay-off (4/3/15) = 23 months = 03/2017

New Total (3/20/15) = $64,509.40
ETA Pay-off (3/20/15) = 26 months = 05/2017

New Total (3/7/15) = $72,591.2
ETA Pay-off (3/7/15) = 34 months

One thing they don’t teach you about enough in high school or college is the importance of personal finance. My parents taught me a lot of what I know about personal finance but I wanted to learn more so I took time to read books on investing, retirement, banking, and the basic principles of money. I still have much to learn but I believe I’ve created a strong foundation for myself and have become very responsible when it comes to handling my money. It was easy to keep a track of my money and expenses when my income was minimal and my spending wasn’t major but now that I’ve graduated and have a full-time position I found that it was getting more difficult to see where my money was going. This is when I decided to use a few tools that has allowed me to take complete control of all my spending, savings, and investing choices. Hopefully these tools can provide you with the sense of control and confidence it has given me.
Google Drive
This tool comes with your Gmail account and is basically a place where you can create word documents and spreadsheets but also save them on your email so that you can have access to them whenever you need. I like to upload all my paychecks onto the site for quick reference and I use the spreadsheet tool to make a “Paycheck Breakdown” document. I create one every 2 weeks when I get paid and then decide where my money will go until the next paycheck. The following picture should explain a lot.

I’ve changed the descriptions and numbers but the overall message is still the same. I list my paycheck on the left side and then deduct all my bills, savings, and credit card bills from that source of income. This allows me to see where every dollar is going and to plan for the next few weeks. It also helps to make sure that all my bills are getting paid and shows me what percentage of my paycheck I’m putting towards savings. Once I pay a bill I would mark the date on which I paid it then go back and mark the date on which it was taken out of my bank account. In the comments section I put various notes to myself like what form of payment I used to pay the bills (i.e. checking account or credit card) and the confirmation section is just a documentation cell that I use for reference if I ever needed to dispute or bring up anything. Now that I have a template created, it only takes me about 15 minutes to decide what I’m going to spend my paycheck on each 2 weeks and this has really helped me stay on top of my finances.
www. Mint.com
This is an AMAZING website site that I found about after reading a personal finance post on CNN Money and it has done tremendous things for me. The greatest thing is that it allows you to see ALL of your finances in one location. You input all of your financial information (credit cards, checking accounts, IRAs, investing accounts, 401(k), etc.) and it’s protected by the same encryption that banks use so you’ll feel at ease. This saves a tremendous amount of time because I have multiple accounts which would take me at least 30 mins to check them all. Another great tool is that it allows you to create budgets for the month and we will automatically categorize your spending for you. For example, if you set a budget for gas each month then it will see the transactions that you make at any fuel stations and categorize them into the gas budget so you can see how much you have spent on gas for the month. I use to have a habit of eating out a lot so this budget helps keep me in check so that I don’t overspend. It’s truly a fantastic website that will revolutionize your personal finances and I cannot recommend it enough.
www.creditkarma.com
I’ve learned a tremendous amount of information about a credit score and its components from this website. Its a great learning source with helpful members to answer your questions and great blog posts. But the reason I signed up for the account is the ability to see your credit score on a daily basis for free instead of paying a price. The credit score report card gives you an overview of how well you’re managing your credit and gives you suggestions on how to improve. It also has a credit simulator where you can see what your credit score would be after you take certain actions like pay off a balance or close an account (not a wise choice most of the time). Your credit score might not seem that important to you now since you’re usually not in the market for a house at such young age but a few points could mean the difference between hundreds or thousands of dollars in interest on your mortgage. I’ve learned to be very meticulous about my credit score because when I do need to purchase a house, I want to be able to get the best rate possible. Knowing and improving your credit score can only help you financially and your future self will thank you dearly for taking good care of it.

So these are a few tools that I use to get a hold of my finances with the spreadsheet being something that I created from scratch. If you only do one thing from this post, I hope that you go to creditkarma.com to find out about your credit score for free because this can be an eye opener to jump start your personal finances. I truly believe that being able to properly handle your money will make you a better person and give you more confidence. I know many people worry about money and its a little taboo to speak about it, but we must break away from that and learn to have a serious discussion with our finances. I hope that this post will be that starting point.

It still comes as a surprise to me when some of my friends don’t have checking accounts! I thought that was a basic financial account that everybody would be had but you would be surprised at how many college students and even graduates don’t have one. I believe that if personal finance was taught throughout high school then it would provide young adults with the proper tool to make decisions regarding college, credit card debt, and even their own retirement. Like many other schools, the closest class that my high school had to personal finance was economics classes. If you’ve ever taken an economics class in high school then you would know how ludicrous it would be to expect a teenager to use that knowledge and apply it to their own personal finances. I had to take the onus on myself to learn as much as I can about personal finance and I believe that has been one of the main reasons I’ve been able to handle my money so well. The only regret I have is not learning more about student loan debt and paying attention to that, but you live and you learn so I will definitely teach my daughters about student loans when her time comes. Below is a list of financial steps I believe every young adult should take just to get their foot in the door and also get some person experience about how the real world operates and runs.

Checking/Savings Account. I think I opened one at age 14 with my dad being the cosigner through US Bank. It was a checking/savings account combo and taught me a lot about interest rates and other basics like the information on a check, what an ATM was, loans, and direct deposits. Personally, I wouldn’t recommend opening a savings account with a big national bank because their rates are usually very dismal, for example my interest rate use to be half a percent of one percent… just think about that for a second. Your best bet would go through an online savings account like ING (where I currently have an account) or through a credit union. They usually offer better rates but you won’t see anything incredible like 2% or higher (my ING account is at .80%). But that’s okay because you shouldn’t be focusing your money in this account anyways because there are much better ways to grow your money. My ING account is for my emergency fund and is a great option because I’m getting some interest on money that I won’t use unless I need it.

Credit Card. This one is very important for your future financial knowledge and building your credit. I was very lucky that my mom  cosigned me onto a credit card when I was 15 and that helped build up my credit so that by the time I got into college I already had a credit history. It was also beneficial to my learning because my mom sat down with me and explained many things including APRs, minimum payments, rewards, cash advances, making minimum payments, and all the questions I could generate regarding credit cards. Building my credit history was the biggest advantage I had entering college because I could apply for my own credit card and build my credit further and at the same time I was responsible and knowledgeable enough to use the card appropriately. So explain to your parents or another cosigner to have trust in you and help you build your credit history as soon as you can.

Roth IRA. IRA stands for individual retirement account and there are two main ones which are the Roth IRA and traditional IRA. Their main differences is how the taxes are incurred and their eligibility is also based on your annual income. I chose the Roth IRA because the money you put in their grow tax deferred and will get taxed when you retire or at the age of 59 1/2 which at that time you should be in a relatively lower bracket rate. You can do more research on the two options but I would go with the Roth IRA due to it’s tax advantages. I opened my account at 16 with my dad as the cosigner and my main goal was because I wanted to invest in stocks but I didn’t want to pay taxes on capital gains or dividends. So I went to my local Scottrade office and opened a Roth IRA and started trading the same week. Once again, this was a great learning experience because it introduced me to the stock market, mutual funds, stock options, different ways to buy stocks, dividends, share prices, P/E ratios, how a company is run, and so many other things. For a high school student, I was pretty savvy about the financial world and I took great pride in that so I kept reading more books and doing more research on the topic. As a young adult, it’s difficult to be thinking about retirement at such a young age but it needs to be done and has to be done consciously. The sooner you start the better. I’ve been maxing out my IRA for the last 2 years and then contribute to my employer’s 401K so I have retirement in mind and would like to contribute more but I need to pay off my student loans first.

I think those are the three main financial steps every young adult should take to get familiar with the financial world and be more cognizant about how they spend their money. Just little steps like this will help snowball your interest in the topic and next thing you know you will understand all those jargon you hear from the credit card companies and banks. And once you get multiple cards and accounts then it’s great to tie everything together through one tool. I currently use Mint.com and it’s fantastic because it provides me an overview of all my accounts in one webpage rather than having to log onto every account individually. If you’re serious about being on top of your personal finances then definitely use this tool. It also lets you create a budget, which I will post about later because you cannot financially succeed without a budget!

The only thing I regret about taking student loans is that I didn’t monitor how much I took and should have took less over my academic career. I consider myself financially savvy but I didn’t foresee that taking out student loans would have such a financial impact on my future. My debt isn’t that bad when you consider it ($21 k) but my parent’s PLUS loans are the main issues sitting at over $50k which in total is almost $80k for a PUBLIC school education. The reality is that I should be no where near this number because tuition each year is around $10k and there is no way that living expenses will reach up to another $10k. I know this because the last few years I started to learn and there was a term (11 weeks) where my living expenses were less than $2,000. One thing I am grateful for is that the student loans allowed me to fully enjoy my college career because I didn’t need money from a second job to help me stay in school. This gave me the time  to party and study without giving me the prior commitment of going to work. On the downside, it gave me a lot of free time which I didn’t always use in the most productive manner but hey, its college! So would I have traded this debt for a lesser college experience? No because I had such a blast with all my friends and I think having the loans allowed me to focus more on school and not on my surrounding finances. I’ve read that the main culprit for why people drop out of college is not because they are incapable of handling the course load but because they run out of financial funds.

Now that I have graduated and can finally see with a clear vision of what my debt truly is, I’m a little shocked at the amount I was able to amass. I decided to take on my parent’s PLUS loan because it seems only right with living at their house free of rent, car insurance payments, and grocery payments. This one is going to take the longest to pay down just because the interest rate is 7.9% compared to 5.2% for my own loans. One of the thing I hate most in this life is paying interest!! But I don’t foresee any other way around it unless I went the lottery sometime in the near future. I have decided to live a frugal life and spend the majority of my dispensable income on paying off my student loans. The loans are slated to be paid off in 25 years but I’m hoping to have ALL of my student loans paid off within 3 years. The main reason I’m attempting to do this is because of the higher-than-expected salary I was offered. Hopefully I can stick through this plan and pay off my debt as quick as possible so that I can start saving up money for retirement, buying a house someday, my daughter’s education, and some spending cash if I decide to go back to school.

So here are some things that I learned about student loans:
1. Take more money the first 2 years and then the 2 last years should only be enough for you to survive. The best years of college for me was 1 & 2 and then partying got a little boring after that and it was time to focus on studying and graduating. So take the money to be able to live your college career (you’re only young once) to the fullest and then be more mature about taking loans as college comes to an end.
2. Stick with FEDERAL loans and avoid PRIVATE loans. The good thing about federal loans is they have many repayment options and are usually more flexible when it comes to complications. I’ve heard horror stories about private loans but if you have no option then try to find one with the lowest possible interest rate and be sure to do your homework/research.
3. Take a student loan seminar to know all your rights and responsibilities so you won’t be surprised when you graduate.

Please be cautious when taking out your student loans and learn quickly about how to balance your college experience and what you can financially afford in the future. It will be difficult but you future self will thank you dearly!