| How much do Americans owe, generally? About 76 | | | | and Other Loans |
| million individuals who comprise the so-called Baby | | | | If you have monthly payments due for student loans |
| Boomer owe more than 40% more than the value | | | | consolidation, you of course have to put a limit on |
| of their liquid and illiquid assets and properties. What | | | | how much you would be setting aside for debt |
| does this mean? This simply means that many are | | | | repayment. It's not healthy to focus all your energy |
| paying for debts for more than three decades now. | | | | into repaying debt, and ignoring all the other |
| Effective Management of Debt | | | | necessities of life. |
| Is this picture encouraging? No. If we are to take the | | | | The optimum amount of money for debt payment is |
| "rule of inheritance" of generations, then the younger | | | | about 36% (this is the maximum amount) of your |
| generations of American will be put in the same | | | | gross income. If you have a mortgage, limit the |
| situation decades from now: capable of acquiring | | | | payments to about 28% (because the debt is larger). |
| assets but lack the financial know-how to settle | | | | Other installment payments should be limited to about |
| debts immediately. This is where student loans | | | | 20%. For student loans consolidation, you can set |
| consolidation enters the scene. | | | | aside from between 10% of your gross income to a |
| Student loans are but one of many kinds of debt | | | | maximum of 15% or 20%. |
| plaguing Americans around the country. Credit is | | | | To maximize the benefits of a financial consolidation, |
| often misused, and paychecks are stretched to the | | | | make sure that you avoid marketing ploys that will |
| limit. Investment cannot be part of the picture if a | | | | bury you deeper in debt. According to Roger Pauline, |
| person is buried in debt. | | | | a financial aid consultant for Sallie Mae: |
| The Importance of Getting Sound Financial Advice | | | | "Payments should not be delayed needlessly. Windfalls |
| The repayment of debt has never task for anyone. | | | | should be used to repay debt. If you can, set aside |
| According to the Federal Reserve: | | | | bonuses for the complete repayment of debt. You |
| "Americans owed $1.33 trillion, excluding mortgage | | | | will feel things easing up once the debts are all over |
| debt, at the beginning of 1999. With the average | | | | and your contract with the financial consolidator is |
| American now spending more than 10% of his or her | | | | over." |
| discretionary income on monthly interest payments, | | | | There's no doubt that interest rates of student loans |
| excluding mortgages and car leases, CPAs can | | | | would be reduced once you get your consolidation. |
| provide clients with a valuable service by helping | | | | Use the opportunity to reduce interest rates to |
| them better manage their resources." | | | | lower the actual sum of your debts. Even if you're |
| The debt of course, has already increased since this | | | | still in college, start paying off your loans by paying |
| computation of the Federal Reserve. But the good | | | | off the interest rates. That will save you a lot of |
| news here is that traditional approaches in financial | | | | money in the future, and you will be thankful that |
| planning still work. | | | | you were financially savvy at such a young age. |
| Optimal Payments for Student Loans Consolidation | | | | |