Borrowing Tips for Young Singles
CHARLOTTE, N.C., May 8, 2006 – Making smart financial decisions early in life can be an important aspect of building a successful future. Recent college graduates, as well as those just a few years in the work force, finally have the freedom to control their destiny by earning their own income and making their own financial choices.
“Wise budgeting, credit management and planning are key tools to create a solid financial foundation,” states Anthony Hsieh, president of LendingTree.com. “When you are making it on your own, no one else can tell you how to spend your money. The great part is you are free to make your own choices. Therefore, it is important that you understand every aspect of your financial situation and that you do your due diligence to become a smart borrower.”
As part of its ongoing mission to empower borrowers, LendingTree offers the following tips to help young singles reach their financial goals:
1. Start saving and investing now. Whether you are saving for a wedding or retirement, the key is making sure you know how much time you have. If you are saving for short-term goals, you can use a savings or a money market account, which provides some level of interest that will make each dollar you put away worth more when you use it later. Also, you need to begin thinking about retirement now. Understand the many investment options that you have and you will have a strong portfolio when you reach retirement age. Make sure you look into your company’s 401(k) program. A company-matched 401(k) retirement account is the smartest and easiest way for you to begin saving pre-taxed dollars now for your future.
2. Pay down smart debt like college loans slowly but surely. College loans are a great example of good debt. But, how you repay college loans directly affects your credit history so you need to ensure you choose a repayment plan that fits your budget and that you are diligent in making timely payments. You might be attracted by the longest term and lowest monthly payments you can get, but it means your total cost will be higher. Plus, do you want to be paying for college 30 years after graduation? The best advice is to get yourself on a reasonable payment plan within your budget and stick to it.
3. Know the difference between good debt and bad debt. Immediate gratification of purchases can be tempting to people at any age. However, young singles, especially just out of school, feel empowered with a new salary and often times make critical mistakes by purchasing large items on credit that they cannot afford. This is what is considered bad debt. It ultimately hurts your ability to secure a low-interest loan when it comes time for a mortgage. Pay off high-interest credit cards, live within your means and start making headway on your student loan debt.
4. Be aware of the ebb and flow of the housing market before purchasing your first home. With a recent surge in the housing market, many people are looking for a quick equity boost by using home appreciation as opposed to long-term financial planning. Investing in your first home can be an important milestone, but it is important to be sure you are financially prepared for the responsibility.
5. Create a strategy to pay down high-interest debt. The most important thing to remember when creating a plan to pay off high-interest debt, such as credit cards, is not accumulating more debt while doing so. Two additional strategies are consolidating debt and accelerating your payments. You can consolidate by paying off old debt with a low-interest loan, and you can accelerate the process by paying well over the minimum amount that is due. The key is to break the debt cycle and start investing and saving for your future.
Starting out on your own is exciting, but planning for the future with smart financial decisions is critical to building the life you want.
About LendingTree, LLC
LendingTree, LLC is the nation’s number one online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 18 million loan requests and $141 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, and credit cards via www.lendingtree.com and 800-555-TREE.
Founded in 1998 with headquarters in Charlotte, North Carolina, LendingTree, LLC is part of IAC Financial Services and Real Estate, an operating business of IAC/InterActiveCorp (NASDAQ: IACI), which also owns or operates LendingTree Loans, LendingTree Settlement Services, LLC, GetSmart®, RealEstate.com®, Domania®, and iNest®.