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Student loan forbearance ending this month: How the headlines could affect your money

The major indexes opened lower Monday.

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Julie K. | Twenty20

Markets pull back from last week's record highs, millions of student loan borrowers face repayments next month, and how to decide whether to use cash or cards. Here's how the headlines could affect your money.

Markets slide from record highs

All three major indexes opened lower and dipped Monday morning as markets gave back some of their Friday gains. Despite the recent violence at the Capitol and disappointing jobs numbers, stocks are coming off a record week.

Student loan forbearance ending this month

Student loan borrowers are expected to have to restart payments in February. Lawmakers initially planned to extend federal student loan forbearance through April 30, but that provision didn't make it into the final version of the $900 billion stimulus bill signed into law in December.

If you're making less money as a result of the pandemic, experts suggest applying for an income-based repayment plan or requesting an unemployment deferment. 

VIDEO2:0902:09
Suze Orman's 2 rules for borrowing student loans

Video by Stephen Parkhurst

Is cash or credit best for your budget?

Fewer Americans are using cash now than before the pandemic: Just 16% of consumers say they normally carry it, and 58% plan to phase out paper completely. While debit and credit cards are convenient to use and track, experts say cutting out cash altogether could be a mistake. Studies show consumers are more likely to make impulse buys with plastic rather than physical money, for example. 

Check out these pros and cons to phasing out cash and focusing on cards.

Words you've heard: impulse buy

An impulse buy, or a purchase made on a whim, can be disruptive to your budget. It can be easier to avoid these types of transactions if you spend with cash, experts say, and put a limit on the amount of money you carry with you.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

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