The educational charity has said that young people realise that going to university is going to be a costly process and that they will probably emerge with debts in the form of loans, leading to them taking a year out to save and try to reduce the impact. "There's no doubt that young people now recognise that they're going to be incurring considerable financial expenditure in the years immediately after they turn 18," said Alastair Mathews, director of policy at pfeg.
According to the charity, the decision about whether to go to university should be part of financial education taught in secondary school. A classroom debate between the benefits of going straight to university after high school or of taking a gap year could be useful, pfeg suggests, allowing issues about finance and borrowing - whether that be through personal loans, online loans or other means - to be considered. Some are taking a year off after university to financially prepare themselves, Mr Mathews suggested, which could mean there is less need for them to take out debt consolidation loans in the years after they graduate to control their debt levels.
"Young people need to be better prepared for the future by having more financial education while at school". Part of that financial education could be to look at these very questions: "What is the best way to spend these years between 18 and 21?" Mr Mathews said.
The pfeg director of policy added that going to university brings with it a number of stresses and strains on individuals when it comes to financial management, with experience of the so-called real world being picked up through being solely responsible for money for the first time. Considering the long-term financial situation is part of this, according to Mr Mathews: "At university they've got to live independently as well and make all sorts of decisions about buying, spending and saving for future needs as well as present ones."
Recent research by NatWest highlighted the trend to consider a gap year to finance university life, with 54 per cent of those pondering whether to take a year away from studying to save some money. According to NatWest figures, school leavers are set to make a combined 212 million pounds in the 12 months before heading to university.
At the beginning of October, Abbey noted that nearly a third of students starting university in 2007 were doing so without any kind of insurance in place to protect their belongings. The financial services provider found that the average student takes 3,300 pounds of belongings and equipment with them to university, suggesting the cost of replacing such items which are not covered by insurance could be very high and even result in the need for a quick loan.
Much has been said about real estate and its wonders. But do you really know the real score on how it creates wonders for your money? After all, different people hold various opinions on how much good do leverage and OPM (other people's money) have. First of all, always make a qualified mortgage professional part of your team of experts; the examples that follow may not be appropriate or even possible for your particular situation. Some people have the goal of receiving cashflow every month to supplement their incomes while others want long-term financial success through investment appreciation. In achieving your financial goals, we can look at some options you can consider. The best thing here is that you are in control when it comes to real estate. To start with, let's say you have $20,000 as a principal. If you are eyeing a $100,000 worth of property, you can deposit a 10 percent down payment. Alternatively, you can put in a 20 percent down payment for a $200,000 property. The rest is for you to decide. Maybe you want to ask: what is the difference between these two options? Considering you decided to put in a larger down payment, chances are, you will pay your mortgage at a much lower price and you do not need mortgage insurance at the 20 percent mark. Larger down payments can provide you cashflow if that is what you like. On one hand, let us say that the appreciation is set at 6 percent for both properties. (Appreciation rate varies depending on the location, type of property, etcbut for this specific article, we will assume it at 6 percent). In just a matter of one year, your $100,000 property is now worth $106,000. However, the $200,000 property becomes $212,000! The amount of appreciation for both properties ($100,000 and $200,000) obviously doubles itself year after year. All these and more, but you would not be spending any thereby saving yourself some serious bucks! Greater appreciation values mean a shorter time until you have enough to pull out some equity and use it to buy ANOTHER property and then have two properties working for you, again compounding the effects of appreciation. What are you sacrificing? Since you paid a lower percentage down payment, the cashflow might not be there on the $200K home, and maybe there are even months where you have to pay some maintenance expenses out of pocket, but look at the long term gain advantages. Moreover, you get more advantage since debt payments and maintenance costs are tax deductions (using leverage or OPM and getting less monthly cashflow) unlike cashflow that is taxable. In the case of some people who needed monthly cashflow - the solution is simple, your approach can be modified to get what you really wanted. Besides, most people would agree that extra payment every month realizes wealth building benefits in the future! With these in mind, its not surprising that you chose the better one. Start pooling your team of experts now and make the right choice!
Both Steve Smith & Alexandria P. Anderson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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