In partnership with
Don’t snooze on student loans
June is the sweet spot to start planning how you’ll cover what FAFSA doesn’t.
You’ve got time to compare options, talk it over with a co-signer, and find a private loan that actually fits your life.
Think beyond tuition—the right student loan can cover housing, meal plans, and even your laptop.
View Money’s best student loans list to find a lender, apply in as little as 3 minutes, and start the semester on the right foot.
Live: Klarna is Going For Gold
Klarna, the Swedish Buy Now, Pay Later giant, is planning to go public.
I'll translate that if there were parts you didn't understand:
Klarna is a loan service that lets you split regular purchases like a pair of shoes into smaller payments.
Buy Now, Pay Later (BNPL) is a financial service where you get to buy something immediately and then will have to pay it back over a short loan period. Popular providers include Affirm, Afterpay, and Klarna.
Going public means they are going to have stock that you can buy online, as opposed to going through a private equity or more involved purchasing process.
So what?
Hold your horses Harry! This is more than a tech IPO headline.
Klarna and BNPL services like Afterpay and Affirm have exploded on college campuses and in online shopping carts.
But behind the pastel-colored apps and zero-interest slogans lurks the real truth that the illuminati doesn't want you to know: it's debt. And when these companies grow, so does the pressure to get you to borrow more.
Learn: Buy Now Pay Later? I Barely Even Know her.
Klarna and alike companies are making bank right now. And that empire isn't necessarily built on helping people with their finances.
Let's get the low down on how a BNPL loan works:
BNPL loans are typically for middle/large purchases. Think $300 sneakers or a $1000 dress. Expensive but not a house.
The loan time frame is short. Think a couple of weeks or a couple of months.
BNPL loans are typically no-interest.
Sounds pretty sweet right? WRONG! SNAP OUT OF IT!
There are some serious risks to using BNPL.
These loans can affect your credit score! While the effect is inconsistent across each service provider (some report more information than others), don't take these loans willy nilly and expect no effect on your score. If you want to avoid an affect on your credit score you should do extra research.
If you don't repay your loans, you can be hit with late fees.
These loans may encourage you to spend more than you have.
BNPL is not always a bad idea. That said, it is best used sparingly. It’s a tool—not free money.
Think of BNPL like hot sauce. A little can be great. Pouring it all over your finances? Bad idea. I don't care if you like your food spicy.
Bottom line: Klarna’s IPO reminds us that these companies make money when we don’t pay upfront. Be aware of who’s winning in that deal.
Leverage: Rocket Money
I have mentioned Rocket Money before for budgeting. It also helps categorize spending, cancel subscriptions and see your finances in one place.
But I'm going to plug it again for one feature and one feature alone: Net Cash.
The net cash feature simply takes your checking account balance and subtracts your outstanding credit card balance to arrive at the cash you’ll have after you pay off your cards.
It's the simplest of features, but having that value in your face consistently is actually huge. The mental gap that you cross when you treat your credit cards like cash and only look at your net cash value makes a huge difference.
It's the financial ice bath that keeps your vasodilation absolutely peak.
Gif by theblock on Giphy, Yeah. Absolutely dilated. Vasolly.
You can connect all your different credit cards to your one Rocket Money account too, so it will subtract your checking by the sum of the outstanding balance you have on all your credit cards.
Here are the cons:
You have to attach your accounts which can be tedious at the start.
Sharing your financial data with another app may make some people uncomfortable.
And there are a few premium features behind a paywall (net cash is not a premium feature).
Also, quick reminder that I am not sponsored by any of the tools I note here. I wish I was! These are just the tools I use.
Launch!
Focus more on your net cash value.
Whether that means setting up a Rocket Money account, or just always looking at your credit card balances when you look at your checking account.
Whatever you got to do so that when you make that payment on your cards you're not surprised by what's left.
Half of the financial game is mental. If you focus on the right things it’s a lot easier. ;)
Hey!
Thank you so much for being a part of this newsletter. I am grateful to write to you weekly and I hope this helps you feel more confident with your finances.
If you found this newsletter helpful, please share it with a friend and invite them to subscribe.
I have a goal of helping people learn personal finance. It works better when more people get my emails.
Thank you for helping me (and your friend) out!
—Ben Brosnahan
