Suze Orman says missing this crucial monthly payment could cost you dearly – this is the first bill you should never ignore

By admin On Sep 20, 2024 0

Millions of Americans are facing a tougher time managing their bills due to inflation. According to the U.S. Census Bureau, about 40% of consumers say it is becoming “somewhat” or “very difficult” to cover their monthly expenses.

This struggle is set to deepen with the return of student loan payments, which were suspended for years during the pandemic. Add to that the cost of vacations and summer childcare, and it’s no wonder many are feeling the pinch. But there’s one payment you can’t afford to put on the back burner: your student loans.

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Financial expert Suze Ormanhost of the popular podcast “Women & Money,” warns that skipping student loan payments is not an option. “It should be a priority,” she said.

It may be tempting to let go of student loans while you have everything else going on, but ignoring them could get you into trouble. The restart of these payments in the fall of 2023 has forced many people to think about how to fit them into already tight budgets. However, Orman stresses that this is one bill that can't be swept under the rug.

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Orman offers practical advice for those feeling overwhelmed: “Make a plan or budget that will allow you to pay[your student loans]off each month.” Her suggestion? Start by cutting back on unnecessary expenses.

“Stop eating out or making other unnecessary expenses so you can start paying down your debts,” she advises. Cutting back on excess can free up the cash needed to meet loan payments and is an easy step toward regaining control of your finances.

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The positive side is that the Biden The administration has launched a new income-driven repayment (IDR) plan called the Savings for Valuable Education (SAVE) plan. This plan could offer significant relief to borrowers, especially those at the lower end of the income scale.

According to the Department of Education, single borrowers earning $32,800 or less and families of four earning $67,500 or less will not need to make any payments. Even those earning more will see some savings — at least $1,000 annually compared to previous IDR plans.

“Under the new guidelines, many people's payments will be cut in half,” Orman explained. This makes it much more manageable to keep up with monthly payments, which reduces the risk of falling behind. For borrowers who feel in a bind, this adjustment could be a lifeline.

There’s no way to sugarcoat it: Budgeting for loan payments can feel like a juggling act. But as Orman points out, it’s a necessity. “People need to remember that they shouldn’t put off paying their student loans. It’s not going away; it should be the first monthly bill you pay. You can’t declare bankruptcy on your student loan.”

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This article Suze Orman says missing this crucial monthly payment could cost you dearly – this is the first bill you should never ignore Originally appeared in Benzinga.com