How do I even create assets when I have debt from my college loans?

Jesse,

Great question. A lot of young people feel overextended when it comes to balancing investments vs. student loans. While there are differing opinions, I err to the stance of building cash liquidity in your first few years after graduation. Having a "liquid fund" that can be used for emergencies, or unexpected costs can be a great asset for you, as you will not be drawn further in to debt, relying on credit cards. You want to decrease your debt amount rather than increase it, so having cash on hand will be beneficial. Stocks and bonds are not as "liquid" or easily accessible as cash. There are settlement dates, fees, etc.

You should contact your university and see what your payment plan options are, the interest rates charged over time, etc. You want to know the ins and outs of the payment plan moving forward so that you can pay what you can afford without overexerting yourself financially. If/when you are employed, your company may be able to withhold a percentage of your paycheck that is directly sent to your savings to pay off student loans. Like Gary said, with these funds being automatically withdrawn, you can budget for the number that you'll actually see on your paycheck without them.

I would take action on making a plan for paying down your debt over time before actively investing in stocks and bonds. Once you have a plan in place for systematically paying down your student debt, you can analyze your budget and spending to see if you have extra funds that could be used for investments. However, I would make it a priority to build your cash reserves and focus on creating a plan that fits your lifestyle. Don't get discouraged by the numbers - it will take some time!

Hi,
Great question and you will find many answers to this one...you have to make your own decisions on how to manage this basiclly but I will offer some advice as well. I read a lot of books by a David Bach and the Finish Rich series ... www dot finishrich dot com. One of his best pieces of advice is to pay yourself first by making your savings automatic...you can do this by having your savings come out of your pay automatically and go into a retirement, savings or other account and then you will not miss it in your paycheck. Then you can focus on paying down your debt. Another thing a lot of people do is to work a part time job or business to pay down debt along with their full time job. Hope this helps...good luck!

Remember everything takes time but with good budget and spending planning everything is possible. If you are just starting out, once you are employed after college, start a cash reserve emergency savings plan as a certain percentage of your income, also make sure that you contribute to 401 k to take advantage of the employer matching plan. You can pay your college loan over time. During this time you may need to limit your other spending. Try to take advantage of free resources and activities in your area which will help you enjoy life without negative impact on your finances.

Hello, I suggest you start preparing your budget if you don't already have one. You need to know exactly how much and how you are spending your money and make adjustments as needed. Take advantage of your employer matching contribution to your 401k and always pay your debts to protect your credit ratings. If you analyze your budget you might identify areas were you are overspending and you might consider changing few habits that will allow you to achieve savings.