[This is the second installment in a series examining repaying student loans. Part I was a best practices guide for repaying student loans.]
Pay As You Earn (PAYE) was introduced in December 2012 and has been widely touted as one of the best options for those struggling to pay back their student loans. Why is this? PAYE is an income-driven payment plan for federal student loans that caps the monthly payment amount at 10 percent of your discretionary income.
The U.S. Department of Education considers discretionary income to be "the difference between your income and 150 percent of the poverty guideline for your family size and state of residence." So let's do some math using the following assumptions:
Everyone's inner-optimist is a loud-mouth.
“Yes, you deserve a gigantic increase in pay.”
It's that time of year when you hear about your bonus and raise.
Want to start a fight? Announce that you'll be shopping on Thanksgiving Day.
A whole bunch of folks will likely sigh and mourn the once-was-sacred Thanksgiving dinner with family. Why, they'll ask, would anyone want to shop on this day? Why would anyone force retail clerks into manning their posts even though they'd rather be home melting marshmallows atop sweet-potato casseroles?
One such pearl-clutcher, hearing that Macy's would open at 8 p.m. on Thanksgiving, suggested to a Chicago-area newspaper that an obituary was needed. "I think this death needs to be acknowledged," she said. "It is the death of Thanksgiving."<
Post-secondary education has never been more important. Personal finance writer Liz Weston notes that “a college degree today is what a high school diploma was 60 years ago,” i.e., the bare minimum for remaining in the middle class.
Whether a teaching degree or HVAC certification, it's going to make a difference in your child's life. The big question is how to pay for that training.
Making college more affordable
Lately, life has been a little hectic. I have a full schedule of work. I'm trying to plan a surprise party. I'm working on three different passion projects. My laundry needs to be washed. Hell, I need to be washed. It's noon and I haven't even showered.
I don't mind a packed schedule, and I've learned to better manage my time. But for those moments when a lack of time gets the better of me, and my stress level rises, I've noticed something unsettling: I have a really careless attitude about money.
In short, I've been stress spending. Some of it is emotional, and some of it is spending out of convenience. Here are a few examples of my recent stress spending:
In the past few months, I've had a noteworthy number of conversations about the trend toward frugality. More of my friends seem interested in finding ways to save, I can't throw a rock at the Internet without hitting a money-saving "hack," and, during a job interview, I had a lengthy discussion about how "personal finance is now trendy."
Get Rich Slowly reader and money blogger Mrs. PoP noticed it too, and wrote about it on her blog:
"Recently I've begun to notice something a bit unusual. An interest in personal finance seems to be becoming more common, and dare I say, trendy… Maybe I'm just drawn to [friends'] comments because of our own interest in personal finance. But maybe, there's also a chance that personal finance -- in a non-gimmicky way -- is actually starting to be 'cool'."Continue reading...
Lifestyle inflation gets a bad rap, and understandably so. It's so darn tempting and so many of us seem to have a serious problem controlling it. But inherently, lifestyle inflation isn't a bad thing. Lots of Get Rich Slowly readers have made this point, and I agree: if your finances are in order, what's wrong with treating yourself to a little luxurious lifestyle upgrade?
In fact, I'd like to argue that lifestyle inflation can be done responsibly.
I live below my means, but I'm not eating beans every night, either. As I've gotten older and my finances have evolved, I've admittedly engaged in a little more lifestyle inflation. But I've always been careful and mindful of it. Here's how I feel I've handled my lifestyle inflation responsibly.
"My family's coming over for Thanksgiving," I told Kim last week. "Really?" she said. "Where are they going to sit?" Good point.
When I moved in, my condo was sparsely furnished. In the divorce, I took a handful of items that were clearly mine -- a couch, a chair, a liquor cabinet -- and let Kris keep the rest. During the year I lived alone in an apartment, I filled the gaps with inexpensive stuff. Now, in a larger home, there was lots of empty space. The dining room, for instance, was a sea of of emptiness because my IKEA table was acting as a desk in the spare bedroom. Part of this was by design. I hoped that Kim would agree to merge households, so I intentionally left parts of the canvas blank.
Sure enough: In July, she moved in, bringing her own hodgepodge collection of furniture. This meant we could use the IKEA table for its intended purpose...but we never did. After being moved to the dining room, it sat there alone and unloved. It was too small to meet our needs. We both wanted to replace it with something that allowed us to host friends for dinner parties, but it hadn't been a priority -- until I volunteered to host Thanksgiving.
Sometimes my personal-finance articles make my friends feel guilty.
“I read your article about saving money, and now I feel bad about the shoes I just bought,” says Guilt-Stricken Friend. “I don't need them. I think I should return them.”
Perhaps she's waiting for me to tell her that she's right, that she should return them. And then she should take that money she almost blew on something fun and put it into her 401K.
Editor's note: Knowing how to file a consumer complaint is a necessary part of being an informed consumer. Here's one experience from a Get Rich Slowly contributor with a list of tips and tricks anyone can use.
A few months ago, I decided that I needed new furniture. I didn't want new furniture. My 3-year-old couch and loveseat were in great condition. On the other hand, I began to realize that I had once again been blurring the lines between being cheap and being frugal.
Since we are now free of consumer debt, my husband generously offered to upgrade our current furniture. I was stoked. After shopping at a few local stores, I quickly fell in love with a reclining sectional sofa. And this wasn't just a reclining sectional, it was the fancy power-operated model. This meant that I wouldn't have to endure the jarring motion of manually reclining it myself. Of course, that probably doesn't sound like a big deal to someone who doesn't have back problems. Yet, those of you who have experienced recurring pain can probably attest to what a big deal it really is. Being in chronic pain can make almost everything a burden, and it is often something small that has the potential to set off some sort of episode. Anyway, I was thrilled to be offered the option of "push button" reclining and I eagerly bought the couch on the spot.