Opportunities are endless for college graduates looking to start a new life on their own, but so are the opportunities to fall into debt!
Louis Gamble is all set. The 23-year-old graduated in May from the U of M, just got married, and will start a new job as a teacher in Collierville next month. There's only one problem: Louis is carrying a lot of debt.
"Yes, I am," he said, "about $20,000 in loans."
Louis tells a common tale. $20,000 is the average amount of student loan debt for college graduates. Germantown Financial Planner Jim Shoemakers says such a large amount of debt means graduates must be cautious.
"You don't want to destroy your credit rating right off the bat," he said. "If you've got student loans, be disciplined. Start a plan, and stick to your plan."
Louis says he intends to do just that. He's hoping to pay up to $300 a month on his loan. Besides a monthly rent payment, he and his bride have no other debt, including credit cards and car payments.
Shoemaker says young people have a tendency to attract debt. "One of the biggest problems with young people are furniture bills and cars. You can go and buy a piece of furniture and pay for it for next to no interest."
But if you miss one payment, you often will be forced to pay back the rest at a high interest rate.
Next week, Nick's 2 Cents will discuss how to build a budget.