With closures and layoffs looming throughout the year, personal finances have been a big concern since the pandemic began.
President Biden announced today that he is extending the pause on student loans through May 1. For those with federal student loans, the pause on payments was a welcome relief, which continues now.
After taking advantage of the pause in payments last year, this additional extension allows Brittany Cannon to get back to paying what she owes.
“Certainly, it was really helpful. I’m ready, I think. I think I’m caught up in everything, so I’m at least ready to start again,” Cannon said.
Paris Groves also took advantage of the pause on loan repayments. After going some time out of work due to COVID without pay, she’s looking at her finances differently these days.
“It made me think more when I get my money, what to do with it,” Groves said.
As a single mother of four, the stimulus payments and child tax credits were only temporary. Now Groves works full time and more. Groves said his student loans would be put on hold.
“I do Uber Eats and Waitr,” Groves said.
“That would definitely put a damper on things when you’re already pinching a penny,” Groves said.
Dr. Robert Tennant, professor of finance at Texas A&M Central Texas, says anything you can pay for these student loans helps.
“It does, so you pay less interest down the road,” Tennant said. “That way you can keep more of your money instead of giving it to the government. With many student loans, the interest continues to accrue to become the principal to grow your student loan during this time of thanks. So if you can make the payment happen during that time, I encourage you to do so.”
He says making a budget is the first step.
“The harder it is to manage your money because you don’t have much, the more complete your budget needs to be because you have no room for waste,” Tennant said.
Tennant says it’s essential to keep your savings in mind. After the pandemic, Tennant advises saving 12 months of income. Although it may seem daunting, he says saving small amounts of money over time can quickly and cutting down on unnecessary expenses can help.
Monitoring your credit, paying off those credit cards, and setting up an emergency and retirement is a good place to start.
“It’s not difficult. It just takes a bit of effort and consistency over time,” Tennant said.