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Midyear Financial Checkup: Look Beyond Your Budget

By U.S. News & World Report

Every year begins with the best of intentions, but habits are hard to break, particularly when it comes to money. So, whether you’re out on your own, living with a partner or married for years, it’s a good idea to check in with your finances periodically. Halfway through the year is an ideal time to take a deeper dive to be sure everything is on track. If you’ve wavered, there’s time to get back on course before the busy fall and holiday season take over.

All too often, as people look at their finances, they start with expenses as the first step. But spending is only part of the story. A full midyear financial checkup reviews spending, savings and income. Combining all three reveals a more complete financial picture — one that ultimately helps people make smarter choices about their money.

[See: 10 Summer Savings Tips.]

Spending. “Don’t spend what you don’t have” remains the ultimate truth in managing day-to-day finances. Of course, monthly spending includes both fixed and discretionary expenses — in other words, your needs and wants. While some fixed expenses, such as a plush apartment, may be breaking the bank, it’s often discretionary spending that takes its toll.

So, consider shifting your mindset around the way you spend to be more mindful of not only where your money is going, but what you’re getting for it. First, check out a budgeting app to begin tracking expenses. If it makes sense to rein in your spending a bit, try prioritizing expenses through the lens of happiness. Think of it like Marie Kondo’s advice in “The Life-Changing Magic of Tidying Up” as a test for your wallet. Many people find that it’s dramatically easier to steer clear of overspending when considering the emotional benefit of purchases, comparing needs and wants and how they may affect short-term and long-term financial goals.

[See: 8 Big Budgeting Blunders — and How to Fix Them.]

Savings (and investments). All too often, savings are considered to be whatever is left over after bills and expenses are paid. But honestly, a more deliberate approach to savings can encourage people. With a solid savings plan — one that meets big goals and small goals– it really doesn’t matter if people choose to spend the rest on avocado toast. Knowledge is power, so having a heart-to-heart now about savings goals makes it easier to build new habits and make trade-offs. Watching savings grow is energizing while budgeting can seem like a drag, so why not stick with the positive?

The good news is that it’s now easier than ever to begin building a nest egg. New savings and investment apps, such as Digit or Acorns, may help you get over the hump and build new habits by starting in small increments and putting savings on autopilot.

And for those people who have turned to the market to invest their savings and make their money work a bit harder, midyear is also a great time to check in and make any changes to optimize investment returns.

[See: Your Month-to-Month Guide to Savings.]

Income. At the end of the day, after taking a comprehensive look at savings and expenses, a complete financial checkup includes some soul-searching on income.

While it seems basic, confirming whether the money coming is enough to cover what’s going out remains important. All too often, people are living close to the edge. Skimping on savings goals for even a few months can make a big dent that is often difficult to overcome.

Be aware of you where you stand financially — and whether or not you expect to fall short. Considering a side hustle or even a garage sale may go a long way.

The goal of any midyear financial checkup is to help people build awareness about their finances in a way that provides a combination of more choices and greater happiness in the future. All the money in the bank can’t buy happiness, and all the flexibility in the world often isn’t sustainable without money. Striking the right balance may look different, depending on your current priorities and financial outlook for the future.

More from U.S. News

11 Expenses Destroying Your Budget

12 Shopping Tricks to Keep You Under Budget

12 Millennial-Inspired Ways to Spend Less

Midyear Financial Checkup: Look Beyond Your Budget originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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