The Frugal Feminista offers tips on how young adults can build wealth.
I grew up thinking that a college degree would be my ticket to wealth or at least entry into the upper echelons of the middle class. But after taking most of my twenties to dig myself out of $65,000 of student loan debt amassed after a B.A. in Political Science, a MSEd in Bilingual Education, and an EdM in Organizational Leadership, I realized that the correlation between a college education and building wealth is pretty weak.While my credentials positioned me to earn more--my income nearly tripled from my first degree to the third--my degrees did not position me to save more, invest more, or be more discerning about credit use; only strong skills in money management could position me do that. Here are six wealth-building strategies and principles that I used to build a strong financial foundation for myself over the last fifteen years. Get organized and knowledgeable about your student loans. Part of being a millennial college graduate is being responsible and informed about your student loans. Take several weekends to educate yourself on the ins and outs of your student loans. Create virtual and/or real folders to organize the following information. a) The type and number of loans that you have. Do you have subsidized and/or unsubsidized loans? Do you have federal loans, private loans, or both? Keep the name and number of your lender(s) in your phone, on an Excel file on your computer, and in hardcopy form for easy access. b) The amount of the principal and the monthly interest that is accrued.You need to know how much money you owe and the amount that is accrued monthly to the penny so that your efforts to eliminate debt are grounded in accurate numbers instead of approximations. c) The repayment loans and options. Have you educated yourself on loan forgiveness programs, the Pay As You Earn repayment plan, and the discounts applied to student loan payments for setting up automatic withdrawals from your checking or saving accounts? Researching these options can save you hundreds, if not thousands of dollars, on your student loan payments. d) The life of the loan in years. How long will it take to repay your loan if you only make the minimum payment? How long do you want to carry this debt? What are the opportunity costs of prolonging the repayment process? Will extending the life of your loan delay purchasing your first home, quitting a job, starting a family or new business, or paying for a wedding?