News Article #4 - Financial Planning for Students

JOUR 2410-504                  Dec. 4                 News 5

     Personal financial planner Luke Einerson informed students to keep a close eye on their loans, and to start planning for retirement as soon as graduation.

     Einerson is a part of the organization Red to Black, a free financial coaching service to Texas Tech students, faculty, and staff. According to the Red to Black website, they assist with money management, debt, and budgeting.

     “It’s interesting how many people come into Red and Black and they don’t even know how many loans they have out,” Einerson said, ”or who they’re with.”

     Carrington Marzett, a senior public relations major from Midland, Texas, said she does not have knowledge about her loans because her parents take care of it.

     “I transferred from Baylor after three years,” Marzett said, “and Baylor is twice as much as Tech a year. So when I finally graduate I will have close to $100,000 in student debt.”

     Going with the most inexpensive loan, Einerson said, is the best way to avoid tremendous debt out of college. He said students should plan for how much debt they will have after college.

     “I hope to have a job after I graduate where I am making enough money to make at least $1,000 or more payments each month,” Marzett said.

     Taylor Parker, a junior community, family, and addictive services major from Snyder, Texas, said her bank, Wells Fargo, has a plan set up for her to pay back her loans.

     “I can start paying back as early as I graduate from Tech,” Parker said, “so I will make monthly payments to them at that time.”

     Students are advised to start building credit, Einerson said, but it depends on the person and their understanding of credit cards for whether or not they need more than one credit card. He said students should have more than one credit card to build a good credit score.

     “I think a student should only have one credit card,” Parker said. “I only have one and I have a rough time keeping up with making payments and controlling my spending on it. I couldn't imagine having to make four different card payments each month.”

     Marzett said she is paying off her credit card and planning to get rid of it. She prefers to use debit cards.

     Einerson said planning for retirement and disasters are very important. Students should start immediately planning straight out of college.

     According to the article, “Financial Planning for Your Family’s Well-being” on Financial Planning Association’s website, beginning to plan for retirement as early as graduation is beneficial for when people reach the age where they have to care for their family and aging parents simultaneously.

     Steve Michlik, a field agent and financial adviser for a Knights of Columbus chapter in Dallas, said it is important for people to have an emergency fund.

     “You can’t go back and create an emergency fund; you need it ahead of time,” Michlik said.

Einerson said students need to know what they’re spending, and the way to do that is to track it. Then students can set financial goals and budget.

     Budgeting will not only tell students how much they are spending, Einerson said, but it will also assist students in making changes to their spending habits.

     Einerson said everyone should start putting money aside in savings now.

     “If you’re single, I would recommend about three-ish months of income set aside, Einerson said. “If you’re married, and you both have jobs, then a little bit less than six months would be easier.”

     Michlik said people do not know how to say ‘no’ to buying.

     “People just want things, the word ‘no’ is a key component in holding onto your money to plan for the future,” Michlik said.         “Oftentimes you have to say ‘no’ to certain purchases.”

Einerson said people should put away around 15% of their salary into savings.

For those who are married, Einerson said to have a discussion about each other’s budgets and possible debt from student loans.

When looking into college, Einerson said, students need to realize with rising tuition costs some degrees may be more valuable than others.

“Look at your degree, find out what the placement is like,” Einerson said. “What’s the average salary when they get out? What’s the average placement rates when you get out?”

Einerson said as a financial planner, he learns from the millionaires, and the people who are in financial crisis.

“I love learning from people,” Einerson said. “Inversely, you just learn a lot from those who are in a financial mess.”