62% of student loan borrowers 'live for today,' spending-wise, compared to 47% of the general population

Student loan borrowers are younger, more impulsive and less financially secure than the rest of the U.S., a recent study from UBS found. 

As borrowers throughout the country prepare for federal student loan payments to come due for the first time in three years, the investment bank set out to compare how borrowers fare financially with the general population.

In addition to owing loan payments each month — a burden those without student loans don't have — UBS found other common traits and behaviors that could be holding borrowers back from living well, financially.

Compared with the general population, borrowers are more likely to say they "live for today" when it comes to spending, less likely to have a rainy day fund and more likely to carry credit card debt. Additionally, student loan borrowers earn less money on average, are younger and skew slightly female, UBS found.

It can be difficult for young people who don't make a lot of money to get ahead financially. But borrowers can take steps today to put themselves in a better position down the line.

Here are three ways borrowers may be falling behind — and how they can catch up.

The majority of student loan borrowers — 62% — follow a similar philosophy when it comes to spending, UBS found: "Live for today because tomorrow is so uncertain." Only 47% of the general population, which includes both borrowers and non-borrowers, said the same.

Spending money on takeout or mindlessly swiping your card for some retail therapy can feel great in the moment. And it can be hard to hold back. "Our brains can only make so many decisions in a day and we have to make so many decisions our brains just naturally start streamlining and either making automatic decisions or not deciding at all," Tara Unverzagt, a certified financial planner and financial therapist, tells CNBC Make It.

Many of her clients struggle with impulse purchases because decision overload leaves them buying pizza for dinner instead of cooking, for example.

So how do you avoid the habit? Unverzagt encourages her clients to make rules for themselves that make spending decisions easier and, in turn, hopefully less impulsive.

"You're going to do what your autopilot says to do," she says. "So set up your autopilot to do the things you want it to do so that when you get to that decision point in a stressful moment, your autopilot takes over and it makes the right decision."

That might look like giving yourself an "allowance" of sorts, such as "I can get takeout twice a month." That way, when you're stressed about what's for dinner, you can more easily decide if takeout fits in your budget or if it's a night you need to cook.

Struggling to stash money away for an emergency fund isn't a problem unique to student loan borrowers, but borrowers are less likely to have a rainy day fund, and when they do, the balances are typically lower than non-borrowers, UBS found.

The share of all adults who have more than six months' worth of expenses saved — about 34% — is more than double the share of student loan borrowers who say they have as much. Just 14% of borrowers have reached that emergency savings milestone.

Student loan borrowers also have less money to work with, since a portion of their income goes to debt each month.

That said, there are a few ways to get started. Look for other areas in your budget where you can cut back. It doesn't have to be a permanent change. Skipping a streaming service or two for a few months and putting those membership fees in a savings account could give you a start.

You might not be able to save six months' of expenses right away, but you don't need to, either. The average emergency costs Americans about $1,400, according to a LendingClub survey from last year, so aiming to save at least that much could be a more manageable goal.

"Start small so that it's painless," Unverzagt says. "Once you get used to that, you can up it a little bit more. Every six months maybe put an [alert] on your calendar to look at your emergency fund, [and ask yourself] where is it and can I afford to put a little bit more in?"

While credit card debt is a problem facing more than just student loan borrowers, those with student debt are more likely to have one or more credit cards and less likely to pay off their balances each month than the general adult population.

Around 42% of U.S. adults say they pay off their credit card balances each month, but that number drops to 31% of student loan borrowers, UBS found.

And borrowers tend to report higher balances — the share of debtors owing $5,000 or more in credit card debt (38%) is notably larger than the share of all adults owing as much (21%).

It's plausible that student loan borrowers may rely on credit more than non-borrowers because of the additional strain their loan payments may put on their finances. 

It can be difficult to pay down credit card debt and student debt at the same time. Still, every bit helps.

Prioritizing your highest interest debt first can help maximize your efforts because it will minimize the amount of interest you pay in the long run. That might mean only paying the minimum on your student loans each month while you put any extra cash toward your credit card bill.

Once that's paid off, you can accelerate your student debt payoff by putting what used to go toward your credit card toward your student loans.

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The Best Remote Jobs for American Retirees

SmartAsset: Best work-from-home opportunities for retirees

While retirement may be associated with leaving the workforce behind, most Americans plan to work past the age of 65. In fact, a 2022 study from the Transamerica Center for Retirement Studies found that around 57% of workers plan to work either full-time or part-time in retirement. Financial reasons and a desire to remain active were cited as the main motivators. Here are eight jobs that can keep you active, boost your income and let you work remotely.

If you’d like personalized help managing your finances in retirement, consider working with a financial advisor.

8 Great Work-from-Home Opportunities for Retirees

While there is a myriad of opportunities for retirees to work from home, what follows are some of best, who might be a good fit for the work and estimated pay, per salary.com as of May 1, 2023.

Bookkeeper —

Bookkeepers maintain a business’s financial records, including purchases, sales, invoices, payments and other transactions. The job will require a high level of accuracy. And it will likely take some technological savvy given that many, if not most, businesses use software to manage their finances.

Best for:

Organized and detail-oriented workers with a solid grasp of basic accounting principles.

Average salary: $42,854

Telehealth Nurse —

If you have a nursing degree but hope to transition to remote work, the growing demand for telemedicine may be a great opportunity for you.

Telehealth nurses “see” patients via email, phone and chat. They also videoconference and answer their questions, determine the next medical steps, conduct follow-up appointments and deliver medical treatments.

If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Best for:

This is good for people who already hold a nursing degree, of course. And in a remote environment, communication skills become more important than ever for treating patients with sensitivity.

Average salary: $85,045

Administrative Assistant —

SmartAsset: Best work-from-home opportunities for retirees

You may think of an administrative assistant as someone who mans the reception desk, makes copies and orders more coffee. But the remote role has slightly different responsibilities. You can expect to answer phone calls and emails, schedule meetings and appointments and handle many of the things that keep a remote office running smoothly.

Best for:

This is good for people with excellent customer service and time management skills. Being able to multitask is a plus.

Average salary: $45,003

Paralegal —

Paralegals serve as assistants to lawyers, helping investigate and research legal cases, maintaining records, drafting correspondence and putting together documents for trials. The job descriptions for a paralegal will vary widely depending on the law firm, what type of law is practiced, its size and the paralegal’s own qualification level.

Best for:

Those who already have a certification or degree in paralegal studies—though the qualifications required to become a paralegal depend on the hiring firm and an actual degree or certification isn’t always necessary.

On the other hand, if this interests you, paralegal certification programs and associate’s degrees in paralegal studies can be relatively affordable and can require as few as 12-24 months of study.

Average salary: $58,630-117,990 (salary ranges widely vary)

Tutor

Tutoring is another job with a wide variety of possibilities, depending on the age and education level of the students, the subject or subjects taught and more. You can be a generalist who works with elementary school kids on any subject they need help with.

You can also be a specialist who works with college students on writing assignments, an ESL tutor who helps adults learn English, and all kinds of varieties in between. In the big picture, a tutor works with students outside of their classes to help them better understand and implement the concepts they’re learning.

Best for:

People who are patient, good at breaking complex concepts into simple ideas and steps and hold the required credentials. Some tutor positions only require a GED, while others may require a college degree in the subject you intend to specialize in, such as a bachelor’s degree in math for a math tutor.

Average salary: $42,422

Receptionist

A virtual receptionist serves the same role as a traditional, in-person receptionist: They ensure that all customer concerns are taken care of.

While there is some overlap with a virtual administrative assistant, a receptionist will be more focused on the customer side of the office than the administrative, answering phone calls and emails, helping customers who need assistance, scheduling appointments and more.

Best for:

This is good for those with good multitasking and people skills. And some technological savvy ensures that customers don’t slip through the cracks in a remote office.

Average salary: $41,704

Customer Service Representative

In a brick-and-mortar retail shop such as a hardware store, a customer service rep may be walking the floor, answering questions about what someone should buy for their upcoming home improvement project.

In a remote business, customer service representatives serve much the same purpose: answering customer questions, helping them with problems and troubleshooting any issues.

Best for:

People with patience, great communication skills and a solid knowledge base of the products or services being sold by their employer.

Average salary: $37,623

Transcriptionist

SmartAsset: Best work-from-home opportunities for retirees

The transcriptionist job is a straightforward one: You simply type up recordings. Some transcriptionists work exclusively in one industry. For example, they can work in legal or medical industries, which necessitates a certain level of knowledge of the terminology used in that profession. Others may do general transcription work, typing up whatever is needed.

Best for:

This is good for fast and accurate typists looking for low-intensity work. While some may find this kind of work boring, the right person may find the audio or video they transcribe interesting and value the calm.

Average salary: $41,453

Things to Consider When Looking for Remote Jobs Don’t Get Scammed

According to the Federal Trade Commission (FTC), a common scam is for a fake company to hire you. And then they send you a check to buy equipment with the caveat that you should send the extra money back. The check is bad and will be returned.

The FTC advises that you carefully review any job offers, only apply to jobs on legitimate websites and never rely on a “cleared” check your employer sends you.

Use Your Career Expertise

One of the best ways to find a new remote job is to use the skills you already have. You may be able to find a less demanding and remote version of your previous career. And going into this new job with your years of experience can be valuable to your employer. And it can potentially earn you a bigger starting salary.

For instance, if you had a career as an editor, you may be an excellent English tutor. You can help students understand the rules of grammar and how to improve their reading and writing skills.

Understand How Working Can Impact Your Social Security Benefits

Working can still be the right choice for you, but make you know how your benefits could be affected. According to the Social Security Administration, while you can work and still receive benefits, there’s a limit to how much you can earn before they begin to reduce your benefits if you’re not yet full retirement age.

In 2023, the limit is $21,240 for those under full retirement age. And it’s $56,520 for the year that you reach full retirement age.

Bottom Line

It’s common for retirees to continue working in retirement. It could be due to financial reasons or just finding ways to keep busy. However, you may not want to stay with the same career track you worked in previously. You may be looking for something less demanding, more flexible or a job you can do from home. But before you decide to work, do your due diligence in finding the right opportunities.

Retirement Tips

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