Federal Loans Are Paused for 6 Months — Should You Pay Anyway?

Federal student loan borrowers will see payments automatically suspended — without incurring interest on them — for six months, according to a measure included in federal stimulus package released Wednesday. This policy applies only to federal loans, not to private student loans.

This option, called a forbearance, will run through Sept. 30. You will be notified of the option to continue making payments toward the principal.  Contact your servicer if you have further questions.

Make no mistake: This is a pause on payments, not forgiveness. Your debt will be waiting for you when repayment begins at the end of the six-month forbearance, unless the policy changes.

And the policy could well change. The measures were made as part of the federal stimulus bill in response to the economic fallout related to the spread of coronavirus, and COVID-19, the illness it causes. Neither the outbreak nor its economic impact shows signs of slowing, and some lawmakers have proposed more dramatic measures.

“I do think there’s going to be additional waves of relief, depending on how this pandemic plays out,” says Betsy Mayotte, president and founder of the Institute of Student Loan Advisors.

Until then, here’s how to decide what to do next.

If you want to pause payments

You don’t have to do anything to get a forbearance to stop student loan payments for six months, which begin in April. You can call your servicer to request a forbearance before then, which would be retroactive to March 13. Interest won’t continue to accrue, as it normally would.

forbearance could give you breathing room to address other financial concerns.

If you are jobless or working reduced hours, a forbearance may free up cash to pay the rent and utilities or grocery bills. Even if your pay is unaffected, a forbearance could help you divert some money toward building an emergency fund or help you pay another, more pressing debt.

Usually forbearance is granted at the discretion of the servicer and interest will continue to build. In this case, the Education Department has instructed all servicers to automatically place all loans into a six-month forbearance, and due to the waiver, no interest will grow.

If you’re behind on your student loan payments (or get behind)

Payments are automatically suspended for all borrowers, including those who are more than 31 days delinquent prior to March 13 and those who become more than 31 days delinquent in the coming days. That means the loans are placed in forbearance and won’t default.

Default on federal loans happens when a payment is 270 days past due, sending your loan to collections and exposing you to damaged credit, garnished wages and seized tax refunds.

For borrowers in loan rehabilitation, each month of the forbearance period would also count toward rehabilitation.

For those with federal student loans in default, all collection activities are suspended. You can get a refund for any forced student loan payments made since March 13. If your tax refund was seized before March 13, it will not be returned.

If your loans are already in forbearance, any interest that already accrued will still be added to your loan principal when your repayment begins, but during the six-month waiver no new interest will be calculated.

If you are seeking Public Service Loan Forgiveness

A forbearance won’t undo your progress toward Public Service Loan Forgiveness, or PSLF. During the automatic forbearance, as long as you are still working with a qualifying employer, those six months will count toward PSLF.

Making payments during the forbearance won’t get you ahead on payments. You’re in the same boat whether you pay or not.

Under normal circumstances only full payments count. You also won’t lose credit for the payments you already made.

If you want to continue making payments

Borrowers might want to continue making payments on federal loans if they want to pay down their debt faster.

The stimulus bill states that borrowers will be given the option to continue making payments toward the principal, but otherwise all loans will be placed in forbearance.

If you do continue making payments, you won’t pay any new interest on your loans for six months, retroactive to President Donald Trump’s original March 13 announcement temporarily suspending student loan interest. This 0% interest rate will save you money overall, even though your payment won’t be lower.

The full amount of your payment will be applied to the principal balance of your loan once all interest accrued prior to the president’s announcement is paid.

Contact your loan servicer with any questions about continuing or restarting payments during the forbearance period.

If your income has changed

If you experience a change in income and still want to keep your payments going, the best way to lower your payment to something more affordable is to apply for income-driven repayment. You’ll get a new payment that is based on your family size and a percentage of discretionary income, and it will be in effect even after the stimulus relief has expired. You can apply online at studentaid.gov.

How to work with your servicer

If you want to restart payments during the automatic forbearance, contact your student loan servicer — it’s the private company that manages payment of your federal loans. But you don’t have to do anything to get the forbearance or the 0% interest rate.

Mayotte encourages borrowers to be patient with their servicers.

“These are unprecedented times, and I can assure you the servicers did not have a lot of notice,” says Mayotte.

To find out which loan servicer is yours, log in to studentaid.gov with your FSA ID.

You can get in touch with all of the loan servicer contact centers by calling 1-800-4-FED-AID.

For additional information visit studentaid.gov/coronavirus for forthcoming details.

Anna Helhoski is a writer at NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article Federal Loans Are Paused for 6 Months — Should You Pay Anyway? originally appeared on NerdWallet.

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Social Distancing During the Coronavirus? Take Your Banking Online

If the coronavirus has you self-isolating, you’re likely more concerned about staying in touch with loved ones and carefully planning your grocery excursions than about changing your money routine.

But if you’re concerned about how to do your everyday financial tasks from home, consider starting to bank online — especially if your bank has temporarily closed its locations. Handling your finances remotely can be convenient even after you feel safe returning to a branch.

“It’s everyone’s responsibility to prevent the spread of COVID-19,’’ says Richard Crone, a payments expert and CEO of Crone Consulting, LLC. “For the safety of consumers, the bank staff, all our families and the community, nobody should be walking into a branch. Financial services can all be obtained digitally. It’s a risk we don’t have to take.”

What is online banking?

Online banking lets you manage your accounts through your desktop or mobile devices. You can typically perform tasks such as transferring funds, paying bills, depositing checks and checking your account balances.

If you have questions that you need a human to answer, you can usually reach out to the bank’s customer service reps via phone, social media, email or online chat as well.

There are many online-only banks, but these days, most brick-and-mortar banks also have online services their customers can use from home (or elsewhere). Banking apps and bank websites allow customers to log in securely to view and manage their account balances from anywhere they have the internet.

Is online banking safe?

Banking sites and apps take many steps to keep your money secure. Mobile banking apps often offer two-factor authentication, which requires you to login with your password as well as an additional code sent via email, call or text. Smartphone logins can be protected with passwords and sometimes biometric measures, like fingerprints or face recognition. Apple users, for example, can set up Face ID on their iPhones so that the device has to recognize the user’s face before they can sign in to a banking app. Bank websites also encrypt your data to prevent third parties from accessing it.

These mobile safety features can make other financial tasks simple and secure as well, such as using your smartphone’s wallet app to make contactless payments.

“It’s much safer to bank, and pay, with your mobile device,” Crone says.

And of course, in terms of the coronavirus, banking online will help you follow isolation recommendations.

What are the perks of banking online?

Most banking services can be done remotely. The only thing you can’t do from home is deposit and withdraw physical cash. If that’s a necessity for you, most banks have large ATM networks, and you can use your bank’s website to find a nearby machine. Of course, be sure to wash your hands when you’re done.

If your current bank’s services aren’t mobile- or desktop-friendly, you can consider opening a new account with a tech-savvy bank that allows online applications. Crone anticipates that these kinds of banks will see a boom in customers in the near future as more people begin to bank remotely and avoid branches.

Banking online saves time. Instead of driving to a branch, waiting in line and talking to a teller, you can finish your banking with a few taps on your smartphone.

Sometimes you’ll get better interest rates. Online-only banks, which don’t have many (or any) branches, tend to have higher interest rates, too. They save money on operational overhead, allowing them to pass the savings on to consumers.

If you’ve been waiting to download your bank’s mobile app or tour your account services from your desktop computer, now is a good time to start.

Chanelle Bessette is a writer at NerdWallet. Email: cbessette@nerdwallet.com.

The article Social Distancing During the Coronavirus? Take Your Banking Online originally appeared on NerdWallet.

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How to Protect Your Finances and Credit in Tough Times

The quickly unfolding coronavirus outbreak is an extreme case, but any sort of hard times will test our personal finances. Many people are now facing reduced work hours and income while watching with worry as stock market upheaval continues.

Preparation is better than panic, however. And starting now is better than doing nothing.

To get your finances ready for tough times, you should know:

  • How to find savings in your budget.
  • How to make some quick cash if hours are reduced.
  • How to protect your credit score.
  • How to triage bills if you can’t cover everything.
  • How to think through your next move if you lose your job.

Take a look at your spending

A budget makes you aware of where money is going so you can adjust when needed.

Online tools can help you track your spending and set up a budget. Searching for “budget worksheet” will bring up options that can give you a framework and help you remember expenses that don’t happen every month, such as car maintenance.

Once you know where your dollars are going, you may spot categories to trim. Finding ways to save money can also help you start or bulk up an emergency fund.

About that emergency fund: You don’t need a huge amount stockpiled for it to make a difference. Even $250 in savings can help a family avoid pitfalls like missing a utility payment, according to a 2016 study by the Urban Institute, a Washington, D.C.-based think tank. Gradually building to $500 or $1,000 adds more protection against financial setbacks.

Create a Plan B to bring in cash

If the paycheck from your main job is in danger of shrinking, a side hustle can be your friend. By thinking ahead, you can have your Plan B ready to go.

Things that you may be able to do include: selling gently used clothes, trading in old electronics, taking surveys, tutoring online and selling handcrafted items on Etsy. You may not make big money, but it will be something. If you sell items that you make, now may be a good time to increase inventory.

Guard your credit score

You might find yourself putting more on your credit cards, especially if you don’t have an emergency fund or if most of your money is invested. It’s essential to pay on time if you possibly can — even if it means carrying a balance. Paying on time is the most important factor in your credit score.

Consider contacting your credit card issuer or lender if you are affected by the coronavirus. You may qualify for some leeway. For instance, Citi has emailed customers letting them know about assistance including “credit line increases and collection forbearance.”

Also, be aware that how much of your credit limits you actually use has a big effect on your score. If your credit score is good, you could prepare by asking for higher credit limits or applying for a 0% introductory rate credit card. (An exception: Avoid new credit applications if you are about to finance or refinance a large purchase, like a home or car.)

It pays to safeguard your score because having access to credit, at a reasonable interest rate, can help you navigate through rough patches.

Know what to pay first if you can’t cover everything

There are already some assistance programs available that suspend fees or cut what you have to pay. Be strategic about paying bills when you can’t pay them all.

If something has got to give, look at survival first. You need to cover food, utilities, shelter and work-related expenses, such as transportation, cell phone and childcare. Anything else can go unpaid.

Skipping some payments will damage your credit, but you can rebuild later when the crisis is over.

Have a plan for if you lose your job

A lingering downturn can lead to long-term job losses. If your field of employment is vulnerable, it’s wise to keep your resume updated and take advantage of networking opportunities.

Losing your job can temporarily put your brain in a fog so deep it’s difficult to think about what to do next. Having a game plan to handle job loss, and a schedule of sorts, can give you a leg up.

Bev O’Shea is a writer at NerdWallet. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

The article How to Protect Your Finances and Credit in Tough Times originally appeared on NerdWallet.

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Keeping (Credit) Score: Don’t Let a 3-Digit Number Define You

Your credit score makes a big difference in your life: It can help you qualify for credit cards or car loans, let you skip deposits on utilities, and even make car insurance more affordable.

But that three-digit number is not who you are.

While it’s easy to feel discouraged about a low score, it’s important to remember that you can change it.

Why a low score feels so bad

“In our culture, credit is king, and if you don’t have it or don’t have access to it …  that taps into one of our greatest fears — that we don’t have a place,” explains Ted Klontz, an associate professor at Creighton University in the practice of financial psychology and behavioral finance. No one likes feeling excluded or unworthy.

But a credit score is simply the result of an impersonal algorithm applied to information in your credit reports.

Your score doesn’t tell the backstory: It could mean you’re disorganized — or it could mean you had a baby and charged diapers and other necessities to your credit cards. It could mean that you lost your job and simply couldn’t pay all your bills — or that you borrowed money and made no effort to pay it.

My score, myself?

Just as a good score doesn’t mean you are trustworthy and ethical, a low score doesn’t mean you aren’t. If your score is lower than you’d like, keep it in perspective.

The first thing Chicago certified financial planner Kelley Long of Financial Finesse recommends has nothing to do with money: “Give yourself some grace.”  Everyone makes mistakes, and rumination and regret won’t help you move ahead.

“The past is the past,” she says.

Figure out why your score is low

Two common causes for score damage are missing payments and charging up credit cards. You can check to see if these issues are on your credit reports by using AnnualCreditReport.com.

Also, learning about how credit scores are calculated can help you know what to avoid and set realistic expectations for how quickly your score is likely to increase. A late payment, for example, casts a long shadow on your credit score — up to seven years. But a high balance on a credit card stops hurting your score as soon as you pay it down and the lower balance is reported to the credit bureaus.

Know how your habits contribute

Long says she’s seen disorganization shred the scores of high-income clients. You may always be the sort who misplaces your keys or phone, but you need to figure out how to pay bills on time, she says. If you see missed payments on your reports, try automating payments or using account alerts and calendar reminders.

If you are using a significant portion of your credit limits, try making more than one payment per month to keep the balance lower. If you’re routinely spending more than you bring in, you may need to redo your budget or find an additional source of income.

Know why you want a better score

Klontz says goals you can see, smell or touch tend to be more motivating. If you want a better score so you can buy a cabin in the woods or qualify for a rewards card that will allow you to travel more, imagining those is much more motivating than just wanting to see a higher number.

Long says it’s the difference between wanting to run a marathon because your partner wishes you would exercise more and training for a marathon because you want to run one.

Celebrate milestones

As you work to build your score, give yourself rewards at intervals of 10 to 20 points, Klontz suggests. There’s no reason to wait until your score hits the level you ultimately want to achieve. It’s unlikely to get there overnight.

Long agrees that monitoring your score can help to connect choices and behaviors with scores. Many personal finance websites and credit card issuers offer free access to credit scores; pick either a free FICO or VantageScore and stick with the same score version as you check your progress. Even when consulting the same score source, expect fluctuations, because the data on your credit reports varies from month to month.

And when you finally achieve that hoped-for credit score? Try to tack on a few more points so that a fluctuation down doesn’t move you to a lower credit band.

After that, Long suggests switching your focus. “Reaching a great credit score may feel great for a little while,” she explains. “But attaining a positive net worth and watching it grow means you’re getting closer to financial freedom, which means you can start making life decisions based on your values and not because of money.”

And nobody’s going to judge you harshly for that.

Bev O’Shea is a writer at NerdWallet. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

The article Keeping (Credit) Score: Don’t Let a 3-Digit Number Define You originally appeared on NerdWallet.

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3 Signs That Itemizing Your Taxes May Be Worth the Headache

For many people, one of tax season’s trickiest decisions is whether to take the standard deduction or itemize. Taking the standard deduction may be faster and simpler, but itemizing could save more money if you have the time and energy to fill out extra forms and dig up receipts.

Fortunately, two tax pros say it’s often easy to tell ahead of time whether itemizing could be worth the effort — if you know some of the signs.

Sign 1: You owned a home

Mortgage interest, mortgage insurance premiums and property taxes are typically deductible if you itemize, and they can easily exceed the standard deduction for many taxpayers. There’s a $10,000 limit on the amount of state and local taxes, including property taxes, you can deduct but that’s not necessarily a deal-breaker, says Matt Keefer, a certified public accountant and director of tax services at Gorfine Schiller Gardyn in Owings Mills, Maryland.

“If I know a [single] taxpayer is guaranteed to have at least $10,000 [in deductions tied to state and local taxes], then I only need another $2,200 of other types of itemized deductions to get above the standard deduction,” he says. “That’s the typical way that I look at it to see if it’s worth the effort for the clients to track down all the documents or not.”

Sign 2: You had big medical expenses

Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income can be deductible if you itemize. “So if you have $100,000 [of adjusted gross income], the first $7,500 is not deductible, but the excess is,” says Robert Karon, a certified public accountant and managing director at CBIZ MHM in Minneapolis. Eyeglasses, dental bills, doctors’ fees and other costs that insurance didn’t cover could add to the pot.

Sign 3: You donated money or goods to charity

Charitable donations are popular tax deductions, but you can only claim them if you itemize. When added to other itemized deductions, they can tip the scales toward itemizing, Karon notes. “For many people, it’s not a big number, but if it’s two, or three or four or five thousand dollars, it adds up,” he says.

Signs of things to come

The key is to view the signs cumulatively. Karon says he can get a good idea fairly quickly when people own a home and pay state income tax, for example.

“They’re going to have at least $10,000 worth of [state and local] taxes,” he says. “Second thing you look at is their mortgage interest. If they have a $500,000 mortgage at 4%, that’s $20,000 worth of interest. So already, $20,000 and $10,000 is $30,000. That person’s itemizing. And then you’re going to want to inquire about charitable donations if they didn’t list them, or medical expenses if they didn’t list them.”

Renters who didn’t have a ton of unreimbursed medical expenses or charitable deductions, on the other hand, are probably going to take the standard deduction. “You’re going to be able to eyeball that pretty quickly,” Karon adds.

Tax preparers and tax software typically run the numbers both ways to calculate which route will save the most money.

Even if you go with the standard deduction, the IRS may let you subtract a few extra things without having to itemize. A big one is business expenses from a side gig, which may go on Schedule C, Karon says. And there are so-called above-the-line deductions people may be able to take without itemizing, including for things such as certain IRA contributions, student loan interest, teaching expenses or contributions to health savings accounts.

Think about your state income tax return when deciding whether to itemize or take the standard deduction, Keefer notes.

“Here in the state of Maryland, if you take the standard deduction on the federal return, then you have to take the standard deduction on the Maryland return,” he says. “It’s something to look out for.”

Tina Orem is a writer at NerdWallet. Email: torem@nerdwallet.com.

The article 3 Signs That Itemizing Your Taxes May Be Worth the Headache originally appeared on NerdWallet.

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Booking Last-Minute Spring Break Travel? Here’s How to Get the Most From Your Miles.

A recent NerdWallet survey found that fully one-third of Americans plan to travel during spring break, which lasts from late February to early April, roughly. This means three things:

  1. Travel to popular destinations will be expensive.
  2. People will want to use their miles and points to offset these costs.


In the past, using frequent flyer miles to book last-minute travel was often a good choice, because the cost in miles stayed the same while the cash price skyrocketed. However, many airlines have switched to “dynamic” award prices, which means the cost in miles tracks the cash price more closely.

Which begs the question: Is using miles to book last-minute spring break travel a good idea?

I break it all down below, but the short answer is: Probably yes for international travel, probably no for domestic travel.

Numbers were crunched

To answer the question of whether using miles for spring break travel is a dumb idea or not, I needed two things:

  1. The average cash price of tickets
  2. The average value of award (mile) tickets.

The first one was easy. I picked three U.S. departure cities whose chilly residents are likely ready to skip town (Chicago, New York, Seattle) and four popular spring break destinations (Fort Lauderdale, Florida, New Orleans, and Los Cabos and Cancun, Mexico). Then I searched for the lowest available fare for a seven-day trip one week away.

What happened next will shock you. At least, it shocked me:

  • Average domestic round-trip airfare: $181
  • Average Mexico round-trip airfare: $527

This is a pretty small sample that only includes four destinations total, but I was amazed at the relatively high cost of the Mexico fares compared to the low cost of the domestic fares.

So my first bit of advice to anyone looking for some inexpensive vernal warmth: Skip Mexico if you can. Sorry, Mexico. Siempre te amaré. (I’ll always love you.)

Now, how about booking with miles?

This took a lot more work (and made me regret pitching this idea to my editor). I compared award bookings for three of the biggest U.S. airlines — American, Delta and United — on the same routes and the same dates as the cash bookings.

Here are the results, which you probably won’t care about unless you’re a points nerd:


  • American: 25K miles + $11
  • Delta: 28K miles + $11
  • United: 31K miles + $11


  • American: 29K miles + $97
  • Delta: 38K miles + $97
  • United: 40K miles + $94

You can tell with a glance that flights to Mexico cost slightly more miles and significantly more in fees, which is interesting. But we want to know whether using miles is worth it compared to the cash prices above.To do that, I calculated the effective value of these award tickets based on NerdWallet’s normal mile valuations (including taxes and fees) and compared it to the cash price.

Sound like gobbledygook? The payoff is:

  • Using miles to book flights to Mexico was generally an above-average redemption (saving the equivalent of $89 in value).
  • Using miles to book domestic flights was generally a below-average redemption (costing the equivalent of $97 in value).

This varied somewhat from route to route and airline to airline, as you’d expect, but overall the results were fairly consistent. Because the cash prices were so high for Mexico and so low for domestic destinations, the effective cost of using miles didn’t match up.

That said …

Check for yourself

Don’t go yelling “SPRING BREAKKK!!” and besmirching the international reputation of Americans just yet. The results I found are only averages — each flight booking will have its own relative value.

Collecting and comparing all this data was a pain in the butt for me, but your own research won’t be nearly as involved. Just look up the cash price of your last-minute flight and the award price for whichever airline program you have enough miles with. Then use a calculator like this one to determine the best option.

Your bank account will thank me later, even if your liver doesn’t.

Feeling overwhelmed about how to use your points and miles? I’m here to help. In this column, I answer your questions about the baffling world of travel rewards, cutting through the jargon to provide clear answers to real problems. Send your questions to skemmis@nerdwallet.com.

The article Booking Last-Minute Spring Break Travel? Here’s How to Get the Most From Your Miles. originally appeared on NerdWallet.

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How to Keep Your Spirits Up in the Long Game of Saving

Dreaming of a savings goal is almost always fun — a sunny vacation, the perfect home, a dazzling holiday gift. But think about how long it can take to get there, and all that fun might fade away.

Even if you’re doing the right things, such as cutting your expenses or taking a part-time job for extra income, it can be discouraging when the finish line is far away. Here’s how to stay motivated until you reach it.

Automate your savings

If you plan to save a little bit each month for the next year or so, you can simplify the process by setting up automatic transfers from your checking account to your savings. You’ll be making deposits without extra effort.

This tactic helped Marissa Ryan, co-founder of a Chicago-based digital marketing agency, when she wanted to save $25,000 for her wedding within 18 months. Using direct deposit, she split her paycheck between two different accounts, one for her wedding fund and the other for daily expenses.

She says automation helped, because there were months she didn’t feel like making the effort. “Setting up automatic deposits took ‘me’ of the equation, so I didn’t have to worry about skipping a month,” Ryan says.

To boost your savings even more with minimal effort, put your money into a high-yield savings account or certificate of deposit, which can earn 20 times more than a traditional savings account.

Celebrate small wins

Say you want to save $5,000, and you’ve set aside $500. That’s a reason to celebrate, says Joseph Polakovic, owner of Castle West Financial LLC, a financial advisory firm in San Diego.

He explains that when you have a large financial goal, it helps to see it as a series of smaller targets that are easier to meet. When you reach these milestones, celebrating them  — with an inexpensive treat, for example — can help you stay motivated.

“You don’t get just one reward at the end. You give yourself several rewards along the way,” he says.

Look at the big picture. Literally.

While you don’t want to be overwhelmed by how far away a goal seems, reminders of the goal itself can be helpful. Once Ryan picked her perfect wedding venue, she downloaded a picture of it and used it as the background image on her phone’s home screen. “It made me feel good just to anticipate the place, and that kept me going,” she says.

Polakovic agrees that this is a good strategy. You could print a photo that represents your goal and place it where you see it every day, such as on the refrigerator or bathroom mirror, he says.

Take setbacks in stride

There will probably be stumbling blocks along the way. For Ryan, it was an unexpected $3,000 car repair bill. She says she used some of her wedding fund to pay it, but was determined to rebuild the balance as quickly as possible.

If you do have a savings shortfall, there are options for getting back on track, including increasing your income. Ryan says she took on extra freelance work in order to replenish her fund.

Be accountable

Find a friend or family member who you can update on your progress. Scott Perry of Raleigh, North Carolina, says he and his wife held each other accountable when they decided to pay off $60,000 in student loans early. They made a plan to live below their means and earn extra income with side hustles. When surprise money came their way, say from a gift or job bonus, they’d use some of it to pay down loan principal, in addition to building up an emergency fund.

“There were times we would have rather gone out to eat on weekends instead of cooking at home to save money,” he says, but together, they resisted these urges. With a little time and patience, Perry says, they were able to cut their loan repayment period nearly in half, writing the last check a little more than five years after they started making payments.

Your savings goal can sometimes seem like a faraway dream. But keep plugging away, and it can eventually become a reality.

Margarette Burnette is a writer at NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article How to Keep Your Spirits Up in the Long Game of Saving originally appeared on NerdWallet.

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3 Ways Millennials Are Getting Money Right

Read almost any article about millennials and you’ll come away with the distinct impression that this generation is royally screwing up.

That they’re suffocated by student debt. That they spend frivolously. And that they’re behind on everything from owning a home to starting a family.

Don’t buy into all the gloom and doom. Millennials are killing it in some areas, thanks in part to the turbulent financial times in which they came of age.

“Millennials were given a front-row seat to the financial crisis,” says Hallie Kraus, a financial advisor with the Humphreys Group, a financial planning firm in San Francisco.

“Many of us witnessed our parents struggle to pay the bills after getting laid off or suddenly finding their home underwater,” Kraus says. “Through these experiences, we were taught a unique set of lessons about money that are actually serving us well.”

Here are just a few ways millennials — a group that today reaches from their mid-20s to nearly 40 — are getting it right when it comes to their finances.

They know their worth

Millennials are making money moves. A 2018 report from Bank of America found that millennials were far more likely to ask for a raise than those in other generations. And when millennials made the ask, they got paid.

A whopping 46% of millennials had asked for a raise in the past two years, and 80% of those who asked for a raise got one, according to the report.

Those in other generations were far less likely to say they had asked for a raise:

  • Generation Z: 19%
  • Generation X: 36%
  • Baby boomers: 39%

Advocating for better pay is an important habit to build early in your career. Not only will you increase your immediate income, but you also could boost your lifetime earning potential exponentially.

They’re saving for retirement, early

While saving for retirement is a win on its own, millennials are going a few steps further by starting early and setting aside a larger portion of their paychecks.

Among millennials who are saving (73%), 3 of 4 are putting money away for retirement, according to a 2020 report from Bank of America. Those who are saving for retirement started at age 24, on average — earlier than boomers and Gen Xers, who started at ages 33 and 30, respectively, on average — giving them a much-needed head start on their future.

“Despite common stereotypes about this generation, significantly more millennials are saving for the future,” says Andrew Plepler, global head of environmental, social and governance at Bank of America. “These habits are encouraging and build on positive trends we’ve seen in recent years.”

Millennial parents are particularly diligent about saving for retirement, contributing a median of 10% of their annual income, according to a 2017 survey conducted online by The Harris Poll on behalf of NerdWallet.

The survey found that millennial parents who were saving for retirement contributed a median of 10% of their annual income to that goal, compared with 8% for Gen X parents and just 5% for boomer parents (all respondents to this question were employed). That seemingly small difference in savings rates can have a significant impact over time.

All that good news is soured by the fact that less than half (46.5%) of millennial households have access to a 401(k) or other work-based retirement plan, according to the most recent data from the Federal Reserve.

They’re focused on credit

Tracking expenses and keeping their eyes on financial goals is helping millennials gain ground in the credit game.

Nearly 40% of millennials improved their credit score in the past year, according to Bank of America’s 2020 survey. Other generations were less likely to claim a credit boost, Plepler says, noting the figures were 29% for Gen Z, 36% for Gen X and 31% for baby boomers.

“Millennials are practicing positive money habits day-to-day, and they’re moving closer to their goals because of it,” Plepler says. “[They] are also being practical and reserved when it comes to their financial choices. They’re willing to make lifestyle sacrifices and trade-offs in the present to achieve future goals.”

These gains are important, as the average millennial’s FICO score still falls in the “good” range at 668, according to credit reporting agency Experian; that’s on par with Gen Z and X, but far behind the older boomer generation (which boasts an average score of 731).

This article was written by NerdWallet and was originally published by The Associated Press.

Kelsey Sheehy is a writer at NerdWallet. Email: ksheehy@nerdwallet.com.

The article 3 Ways Millennials Are Getting Money Right originally appeared on NerdWallet.

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