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Last week Barbara laid out a number of options for borrowers to extend or postpone student loan repayment — important information for new grads to have as they enter the real world. This is a topic that we get lots of questions on — probably second only to how to lower student loan interest rates.

But I'm going to play devil's advocate  here, because I think it's important for you to consider another perspective. I'm going to tell you not to take advantage of these options unless you absolutely have to.

Michelle Singletary, one of my most favorite and down-to-earth personal finance columnists with The Washington Post , had this to say about extended student loan repayment in a piece published on May 17, 2009:

But can I give you some hard but well-meaning advice if you're one of the many graduates saddled with student loans?

Instead of immediately opting for repayment plans that will stretch your payments out until you're in middle age, try to find other ways to handle this debt.

I know these are tough times. Nonetheless start your loan repayment as soon as possible, even if it means taking a second job, or a roommate (or two or three), or yes, dare I say, moving back home for several years.

You could handle this debt if you delay going on to graduate school, which would only pile on even more debt. If you are going to have trouble finding a job to make the monthly payments on your undergraduate debt, how in the world are you going to find employment to service tens of thousands more as a result of an advanced degree? Trust me, an advanced degree doesn't guarantee a big salary.

You don't get to buy a new car, an upgraded wardrobe, waste your money on liquor at happy hours, or take vacations until this debt is extinguished.

And don't look at me with that face. Only after you've exhaustively scanned your budget and cut every possible expense (such as deleting the texting option on your mobile phone) should you consider extended repayment options.

Tough love from Michelle, but her advice is spot-on. Here's how she ends her column:

I've met an incredible number of people -- too many -- who really could have paid their student loans under the standard payback period but because they didn't want to live frugally, saw their loan balances jump significantly over the years.

If you truly can't afford to fully pay what you owe, take advantage of the extra breathing room. But remember the more you delay, the more you may pay.

Something to think about.

Barbara

We already talked about ways you could possibly lower your monthly student loan obligations. But if you're looking for a way to postpone your student loan payments, there may be an option for you as well.

Under certain circumstances, borrowers may be eligible for a deferment or be granted a forbearance. Now, in both cases, you aren't required to make payments to your student loan for a short period of time. However, there are some differences that are important to understand. I'll give you the scoop on each:

• Deferments: These are for federal student loans. There are several types of deferments for folks in different situations.  You need to meet the criteria of these situations in order to be eligible for the deferment. If you are granted a deferment, know that in most cases, you’ll still be accruing interest. (The exception is for subsidized Federal Stafford Loans, which are based on financial need — the interest accrued during deferment for those loans is paid by the government.) If you don’t qualify for a deferment, you may be able to postpone payments with a forbearance.
• Forbearances: Forbearances are available for both federal and private student loans. These are granted at the discretion of your lender. Interest will continue to accrue on your loan during forbearance (even for the subsidized Federal Stafford Loan). Federal forbearances are available for borrowers experiencing financial hardship and other situations. Private student loan forbearances vary by lender, so ask your lender what options are available for you.

If you're having difficulties repaying your loan, it's very important to talk with your lender about options and the paperwork you'll need to apply for them. You don't want to fall behind on payments, and a deferment or forbearance could help.

Barbara

Folks, we've made it through another graduation season. The gowns and mortar boards are packed away, and now many graduates are focused on their finances during the first months out of college. Student loan repayment is just down the road.

As you look ahead to that first student loan payment, you may be realizing that it's going to be a little tough to swing. You may have borrowed more than you can afford to repay or may not have secured employment quite yet. (Side note for those of you just starting to take out student loans: Make sure you budget properly so you don't borrow more than you can repay.)

Whatever your situation, there are options available to help make it easier to pay your student loan. Here are some ways you may be able to lower your interest rate or monthly payments:

• Choose a different repayment plan. For federal loans, there are a number of repayment plans other than the standard repayment plan. You may be able to have your payment based on your income, extend your repayment if you have over $25,000 in federal loans, or start out with smaller payments that gradually get larger over the repayment term. And check with your lender to see what repayment options are available for your private student loans.
• Take advantage of discounts from you lender. Ask your lender if there are any interest rate discounts available for your loan. For example, you may be able to save money if you have your monthly student loan payment automatically deducted from your checking or savings account.
• Consolidate your loans. By combining your federal student loans  together into a new loan with a longer repayment period, you'll usually lower your monthly payment. For private student loans you may even find that your interest rate is lower if your credit situation has improved or if you bring on a cosigner with excellent credit.

Remember that if you're lowering your monthly payment by extending your repayment period or paying just the interest, you may end up paying more interest over the life of your loan. However, in the grand scheme of things, if it prevents you from missing payments and defaulting on your student loan, it might be worth it.

Looking for a way to postpone your student loan payment? We'll talk about deferments and forbearances later this week, so stay tuned!

Meanwhile, hit me up with any questions you have about different repayment options.

Karen

Have you ever been in your favorite store with a cool new pair of jeans, a new t-shirt, and a slew of other clothes in hand, ready to pay when the cashier says, "If you open a store credit card account with us today you'll get 10% off your purchase?" At that moment you consider how great it would be to have a credit card at your favorite store — without having to pay for that $500 charge right away.

Before you decide to sign up for that store credit card, you might want to consider that typical annual percentage rates (APRs) on credit cards from a retail store are about 23%. Ouch!

If you are able to pay off your purchases right away, the percentage rate might not matter to you (just remember the possible effect on your credit). But, if you think that paying a little bit each month is more your style, you should see if the savings will be worth it. To do that, you'll need to know how your rate is calculated. 

Let's break down what a 10% savings at the register for a $500 purchase looks like in one month:

1. Figure your average daily balance.  Add balances each day (purchases minus payments) and divide that by the number of days in the billing period. We'll use 30 days for this example. Say you make no additional purchases or payments for the first 15 days, and then on day 16 you make a $50 payment and on day 21 you make a $75 purchase. So your balance was $500 days 1-15, $450 days 16-20, and $525 days 21-30.

Here's the math:
($500 x 15 days) + ($450 x 5 days) + ($525 x 10) = 15,000
15,000 divided by 30 days in the billing period = $500 average daily balance

2. Calculate the interest. After you have the average daily balance, you can find out how much interest you'll pay that first month. Take your APR divided by 12 to find out how much interest you're charged each month. Then take that number times your average daily balance.

   Here's the math:
   23% APR divided by 12 = Monthly rate of .019166
   .019166 x $500 = $9.58 interest charge

3. Was the savings worth it? Back to your original sale: You saved $50 at the register (10% of $500), but after a month on your store credit card, you owe $9.58 on the balance. That lowers your savings to $40 after the first month. And unless you pay off the remaining balance, those savings will continue to drop.

While I am an advocate of using credit when it makes sense, I'm highly in favor of knowing what my rates are and what it will cost me in the long run. It's easier to make better choices when you know exactly what that retail therapy  will cost.

Barbara

Since I just talked about ways for wedding party attendants to budget, I thought it would be prudent to speak to all those brides- and grooms-to-be out there as well.

Now, I'm just a novice in the wedding planning arena, but I'm getting plenty of exposure from my sister, who's planning an October wedding. It seems like every time we're in the same room there is something new to look at. From centerpieces to cake, "save the date" cards to invitations...I've seen many options.

My sister is staying true to the "bride on a budget" mentality. She and many of the other brides in my life these days are looking for ways to lower their wedding's bottom line. Not everyone has the means to celebrate with a Platinum Wedding , and in my opinion, no couple should start their marriage with a mound of wedding debt in order to have one.

Through online sources like The Knot , brides can get great tips on everything from negotiating with vendors  to little ways to save.  Just cutting back on a few things or choosing to do something yourself can make a huge difference.

So far in my tenure as bridesmaid I've seen homemade cakes, bouquets made by the bridal party, and wedding dance music courtesy of the bride's iPod.  I even designed one of my friend's invitations so she could save on costs.

For all you young married ones out there, did you pull off a budget wedding? If anyone has some good tips, please pass 'em on — my sister will be eternally grateful!

Barbara

It's the year of the wedding — for me at least. This year I'll be a maid of honor twice and bridesmaid once. (Yes, it's a bit Jane. ) Not to mention I'll be a guest at a slew of other marriage celebrations.

As I've said before, I love a good wedding. But this year the matrimonial festivities are taking their toll on my pocketbook. Are any of you in the same boat?

When you're fresh out of college, it can be difficult to find the money you need for the basics (like rent, utilities and your student loan payment), let alone adding in a budget category for dresses, tux rentals and gifts. It can be a bit overwhelming. At first I was definitely wondering how to survive. 

However, with a little creativity on my part and some thoughtfulness on the part of some brides (thanks to a recession-friendlier industry ), I've been able to lessen the overall costs. Here are some slices of buttercream-frosted savings cake for thought:

1. Showers and parties — When you're in the wedding party, chances are you'll be hosting or helping with a shower or bachelorette/bachelor party. These, my friends, can get extreme. Think food, favors, game prizes, transportation...it all adds up. But thinking outside the box (a backyard BBQ, do-it-yourself invitations, etc.) can help you save. I was able to put together some cute favors for an upcoming shower with some items I found on sale. And instead of renting a bus for a bachelorette party, we're heading to places within walking distance of each other in Omaha's Old Market. 
2. Gifts — Here is where being creative can not only be cheaper, but more memorable, too. Staci once told me that while she was on a strict budget working in Washington, D.C., she gave couples an American flag that had been flown over the U.S. Capitol  on their wedding day. She also gave me a great idea for what has become my standard wedding gift: a basket of blessings based on a quote from the movie "It's a Wonderful Life."  Here's how it breaks down:
• Bread... that this house may never know hunger (a gift certificate to Panera Bread®  or your local bakery)
• Salt ... that life may always have flavor (coarse salt in a cute shaker)
• And wine ... that joy and prosperity may reign forever (this one's pretty self-explanatory)
3. Attire — Thanks to budget-conscious brides, I've had some savings here as well! My first wedding duty this year is as maid of honor for my best friend, who kindly chose a bridesmaid's dress by Isaac Mizrahi for Target®  (just $49.99!). Plus, we got to pick our own shoes; I made sure they were something I would wear to work, too. The other weddings I'm in? I'm getting a pretty slick deal there, too. One bride's mother purchased the bridesmaids' dresses (how nice is that?) and the other got a discount for choosing dresses at the same store where she purchased her wedding gown (bonus!).

So despite my initial thoughts, I think I am actually going to make it through this year of wedded bliss and may even still want to have a wedding of my own one day!

Anyone else have other tips to save on wedding party expenses?

Barbara

We all strive to be above average in some of the things we do. Scholars are hoping to surpass the average grades, athletes are striving for higher than average statistics, you get the picture.

Yet we tend to settle on being average in other arenas. And, yes, sometimes it's just fine to run with the pack as just your average Joe or Jane.  But there is one area that you should never find comfort in being average — your finances.

Why not? I can tell you from personal experience that finding comfort in being average can come back to bite you!

When I graduated from college, a little over $2,000 on a college credit card followed me into the real world. Now for someone who had a scholarship to cover college expenses that seems a bit high, right?

Well, here's the deal. Looking into some credit card facts  I kept hearing over and over that the average college student graduates with over $2,000 in credit card debt. So I thought, "What the heck?" If my counterparts are dealing with the same situation, I can charge a few things, too.

However, when we get stuck thinking that the debt is inevitable, we become less conscious of how much we are spending on things we don't really need. Part of that $2,000 on my credit card was for an iPod, and be sure that I whipped out the plastic for a pair of shoes or two (or three...).

So in the end, thinking average college debt was OK helped me develop some pretty bad spending habits. And unfortunately, those habits stuck with me until I started working for a bank and talking about financial education!

I challenge you to be better than average when it comes to your finances — both during college and after. Think twice about charging that sweatshirt at the campus bookstore. Resist ordering a pizza for dinner when you could use your pre-paid meal plan at the campus cafeteria.

Don't fall into the average trap with your student loans, either (the average for student loan debt is almost $20,000 ). Consider a part-time job to supplement your living expenses rather than taking out more student loans. Pay your interest during school to avoid capitalization.

Each tiny step will put you leaps and bounds in front of the students who settle for "average."

Rachel

A few years ago when I was a banker, a high school student came in looking for help. He was freaking out because he had overdrawn  his account again and his dad was going to take away his car. "You have to help me!" he pleaded.

Oh, to be in high school again and have the threat of your car being taken away. People, listen: Of all things to have your car taken away for, banking trouble should not be one of them. You got this. Here's what you can do.

1. Make sure you have overdraft protection set up. When you spend more than you have in your account and you have overdraft protection set up, money can be automatically transferred from your savings account or credit card to your checking account to cover whatever you bought. This transfer costs money but it's less than a full overdraft charge. But don't let it come to this. You still have to replenish your savings or pay off that charge to your credit card after the fact. Do what you can to prevent this from happening altogether.


2. Play a little money mind game with yourself. For most of us, if there is money in the account, we're going to spend it, right? And if you only have $5 left in your account until Friday and you really want that Red Bull , you are going to justify the purchase. Here's what I used to do: When I opened my checking account with $100, I considered my account at zero. I pretended that $100 = $0. That way I always had an emergency cushion. When I say pretended, I mean it. That $100 in my checking account was invisible to me. Very rarely did I let myself go below the $100 and when I did, it was usually for something "really important: the day before payday.


3. Set up a text message alert to send when you enter the danger zone. You can get a text you when your account gets down to a certain amount, whatever you designate.


4. When in doubt, send a text to check your balance. This way there is no guessing or assuming and you know exactly where you stand.


5. And of course, be sure you are logging in to online banking as often as you do Facebook.  Knowing what's up will help you stay out of trouble, at least with your bank account.

Barbara

Editor's note: We want to take some time to talk about one of your most important financial assets: your credit. Over the next few days, Barbara, Kathy, and our newest blogger Cheryl will be dissecting credit — why it's important, how you monitor it, and what you can do to build or fix it.

Imagine this summer. You've snagged a great internship or your first job out of college, and you're looking for a place to hang your hat after work. You find a great apartment, fill out the lease application and start thinking about how to decorate your pad. Then you get the call from the apartment's manager. Unfortunately, she says, you don't have good enough credit to live there.

Gasp! Turns out those late payments to your utility companies and spring break costs still sitting on the credit card can affect you more than you'd thought.

Your credit can affect more than just your financial life.  It's true that landlords may check your credit before allowing you to rent an apartment. Your prospective employer may look at your credit to see if you are responsible. You may even find that your credit is examined in determining your auto insurance.

And obviously, the big reason you need to be concerned with your credit situation is so you're able to secure some credit down the road! Whether you're borrowing for a car, your education, or everyday purchases through a credit card, a good credit history is key. For a little more insight into what lenders are looking for consider the "5 Cs" of credit, from the Hands on Banking® program :

• Character: When lenders evaluate character, they look at stability — for example, how long you've lived at your current address, how long you've been in your current job, and whether you have a good record of paying your bills on time and in full.
• Capacity: This refers to considering your other debts and expenses when determining your ability to repay the loan. Creditors evaluate your debt-to-income ratio, that is, how much you owe compared to how much you earn. The lower your ratio, the more confident creditors will be in your capacity to repay the money you borrow.
• Capital: This refers to your net worth — the value of your assets minus your liabilities. In simple terms, how much you own (for example, car, real estate, cash, and investments) minus how much you owe.
• Collateral: This refers to any asset of a borrower (for example, a home) that a lender has the right to take ownership of and use to pay the debt if the borrower is unable to make the loan payments as agreed. Some lenders may require a guarantee in addition to collateral. A guarantee means that another person signs a document promising to repay the loan if you can't.
• Conditions: Lenders consider a number of outside circumstances that may affect the borrower's financial situation and ability to repay, for example what's happening in the local economy.

If you don't have the greatest credit (or don't even know what your credit situation looks like), don't fret: Now is the perfect time to explore your credit.

We'll show you how to get a good picture of where you stand on the credit spectrum and what you could do to help your cause. And if there's something you definitely want to know more about when it comes to credit let us know.

Barbara

It's about that time of year when the new faces I've been seeing at the gym since the start of 2009 begin appearing less frequently. Ah yes, it's the time when those resolutions made just three short months ago fade away, and we revert back to our 2008 selves.

My health resolution wasn't about the gym, but rather eating healthier. Let me rephrase: To eat healthier while staying frugal.  Frankly, it's a difficult task, especially when those dollars seem to go further on a fast food value menu than in the produce section.

Healthy food can add up quickly, so here are some tips for those of you who, like me, find their resolution motivation is waning:

• Buy produce in season.  Fruits and vegetables that are in season will not only cost less, but they'll taste better, too.
• Grow your own food. You can get a good idea of what will work in your area with resources from your local Cooperative Extension office.  Don't forget herbs and spices, too! Even if you don't have space to grow an expansive garden, anyone can put a tomato plant by a window, right?
• Stock up on sales. Buy more of your standard non-perishable items when they're on sale. You can even make your own snack-sized servings with reusable plastic storage bags instead of paying more for pre-packaged goods.
• Freeze bulk food. If you find a sale on meat, buy more than you need and freeze some for later. Or when that garden is so fruitful you can't eat it all, freeze extra strawberries, zucchini, etc., to use later.
• Substitute a different protein. Yes, meat can be pricey. But different proteins, like beans, can be a less expensive option.
• If you have to pick fast food, make smart choices.  You can find healthier, inexpensive options, but you have to look for them.

It's nothing groundbreaking, but sometimes all us resolvers need is a little reminder. Are there any other methods you use to keep meals healthy on a tighter budget?