In many cases, it may be necessary to take out student loans for your college education. However, it is important to keep track of how much you will need to pay back. Suze Orman has the guideline of borrowing the equivalent of what you will earn during the first year at your new job. One of the guests on the Suze Orman Show last night had $200,000 of student loan debt, $60,000 credit card debt and other debt and was bringing home $4,500 a month after taxes. She said while in school, she was told she would be able to afford the payments because she would be a doctor, but she was a therapist of some kind and was not making the incomes that doctors do. So it important to know what kind of income to expect when taking out student loans. Along with the amount of student loans you also need to figure the amount of interest you will be paying.
Then on Princess the
Subject of the show had taken out student loans but had used a majority of the money for multiple trips and a nose job. Her parents had paid most of her college expenses and other expenses. By doing this they have put their retirement plans in jeopardy and have put off trips that they had hoped to go on.
Many people feel obligated to save for their children’s college funds, but may be important to fund your retirement funds first.