As your local community bank for more than 130 years, Clear Mountain Bank has helped our customers and communities during many challenges and uncertain times.
If you are a federal employee, government contractor, or are otherwise impacted by the current federal government shutdown, we are here to help.
Learn About Financial Literacy
Once you understand the source of your loan anxiety, it's time to examine your finances. As defined by Investopedia, financial literacy is the essential foundation for a smart relationship with money. It is the start of a lifelong journey of managing the financial aspects of your life.
Financial literacy will equip you with essential life skills, enabling them to make informed financial decisions while effectively managing their money throughout their lives. When you understand how to save money, invest wisely, and make informed financial decisions, your money can work for you, potentially leading to increased assets and greater economic security.
Know Your Loans
Once you know your loans inside and out, you will start to gain more power over them. To help you fully understand them, start by creating a spreadsheet as a summary of each of your loans, including details such as the total amount owed and monthly payments. When you write down all your loans to review, it will be easier to make payments on time and spend your money wisely overall.
DON'T IGNORE YOUR LOANS!
Sadly, ignoring your loans won't make them go away. There is a chance that your loan payments can accumulate, and you may end up owing more money than initially needed, which can negatively impact your credit score.
Missed payments can have consequences, including being denied future borrowing opportunities and increased interest rates.
QUICK TIP: Ensure that you open and read any letters or emails from lenders that detail your loan information thoroughly. This can help you stay on top of your current loans!
Track Your Spending
Every time you spend money, regardless of the item, ensure that you receive a receipt for the payment. If this is not possible, write a note to yourself listing the date of the payment, the cost, and the purpose of the expenditure.
QUICK TIP: To ensure this information remains organized, create a spreadsheet and assign each payment to a category (e.g., food, entertainment, insurance). Note each expense as either a need or a want (and be realistic!). Once the month is over, calculate the total for each category.
This will help you learn exactly where your money is going, how much you have left to spend, and overall help with overspending that commonly occurs when money is being withdrawn from your account without being tracked.
Automate Your Loan Payments
Automating your loans can be a game-changer! It can ensure you don't forget payments, which can negatively impact your credit score.
In most cases, you can arrange this through autopay (including with your Clear Mountain Bank app), where your monthly loan payment will be automatically transferred to the lender!
You will also be in charge of automated payments, which means you can let your bank know when you want to stop making these types of payments at any time.
Start the Snowball Method
If you are starting to gain control over your finances and feel that you have more than enough money to cover your loans for this month comfortably, there is an option to participate in something called the "snowball method."
In a nutshell, this means that students can make extra payments on their student loans; more of each subsequent payment will be applied to the loan balance, which will decrease your overall balance at a faster rate.
