Our Colorado Springs bankruptcy attorneysknow that one of the main culprits for out-of-control debt is the overgrown mountains of student loans.
Colorado Springs bankruptcies are on the rise as students are graduating with enormous loans and little opportunity for jobs that will help them pay it off. It begins a vicious cycle of debt.
So how can you help a new college graduate, hoping to avoid drowning as they wade into this murky economy? MSN Money touched on this issue recently, with an article detailing five do’s and don’ts to helping out new graduates.
The first thing that new college graduates really need is health insurance. Hopefully, they are lucky enough to land a job that can provide this for them. However, oftentimes, even if they land a new gig, it may not be accompanied by full benefits. As of right now, parents are allowed to keep their children on their own health insurance plans until they reach the age of 26. This is important because if an unexpected medical issue arises, a graduate could quickly find themselves buried in debt.
Secondly, help them get a head start on retirement savings. Roth IRAs may be a good way to go, depending on how much you can afford to help. Having this available is going to mean a more secure future – and you’ll know they’ll be taken care of, even if you’re not around.
Thirdly, make sure they are staying up-to-date with their student loans. They have to start paying within six months. If not, the penalties start piling up fast.
The two things you really want to avoid are co-signing for a car loan or co-signing for an unsecured credit card. With a car loan, if he or she misses a payment, you are automatically on the hook for it. What’s more, that will dent your own credit. And with regard to an unsecured credit card, if he or she fails to pay up, again, you could be hounded by creditors, nagging you to pay up.
At the end of the day, you want to make sure that your new college graduate has the best start possible as they embark on his or her new career – but you shouldn’t put yourself at risk of snowballing debt in the process.