Friday, August 9, 2013

Incoming Freshman: Easy Stuff for Managing your Money

Cool, you have graduated high school and have moved on to an institution of higher learning aka a university or community college. Maybe you’re self funded, parent-funded, or using a variety of grants and/or student loans to make your ends meet. Over the next four years, you will likely be handling more money than at any other time in your life so far.

As you start your classes, you will find there are a lot of demands on your wallet. Books and tuition are a large part of this demand. But it is managing your living expenses and personal entertainment that calls for the most attention. Take some advice and don’t throw money out a window!

  1. Open a checking account at a credit union.
    • Why a CU? No monthly service charges. Reduced fees. More Free ATM’s.
    • Use your online banking to track your checking usage. Don’t be afraid to check your balance daily on your phone, laptop, or tablet, it’s free!
    • Open up a savings, too. Set up a small amount to automatically transfer to the savings monthly. You may not miss the money but it will be there when you need it. $20 a month can be a lifesaver down the line.
  2. Organize: Create some files for your important documents and statements. The basics will include:
    • College File: This file has your documentation for your financial aid; loans or grants. It should hold the receipts for your tuition payments.
    • Banking File: This file has all your bank statements (if you are not using your online banking). If you have a credit card you are managing, the statements would go here as well.
    • Bills: This file is where your monthly/quarterly records of bills shall be filed away; i.e. rent, cable bills, cell phone, heat/electricity.
    • Find a locking cabinet at a yard sale or second hand store to save your documentation. A simple lock is often all it takes to keep honest people honest and discourage would be identity thieves.
  3. Budget: You have a limited amount of money each semester from your student aid grant or loan receipts.
·        Use any money left over after paying your tuition and book expenses to help pay for your living expenses. That money left over after paying your school expenses is not a bonus to be spent at parties and spring break. It is what you have to feed and cloth yourself.
·        Take the amount and break it out in even amounts for the next few months until your next aid payment is expected.
·        Plan for your expected expenses by creating a budget for each month. You don’t have to wait until October to create the budget for October.
·        Saving money should be the second item in your budget after paying your rent. See #1.

  1. Avoid owning a car. This may sound crazy in “Car Culture” California, but in the big picture, owning a car is a major expense.
    • Paying for gas, insurance, maintenance, and repairs can put a major crimp in your happy fun time at college.
    • Colleges like San Jose State are close to all manner of stores and restaurants. There are lots of great shopping and eating options within easy walking or bike riding distances.
    • Besides, municipal transportation passes/bus passes are so much cheaper than gas, tires, and car insurance!
  2. Don’t get talked into applying for a credit card. You don’t need it.
    • Of course, if Mom or Dad set you up with a card that you will manage together, that is a different matter. That card is in your possession for emergencies more than likely. Emergencies involve medical issues, police issues, fire, or floods. Running out of beer or pizza does not constitute an emergency. There is no such thing as an emergency night at the movies or an emergency concert.
    • Manage the card well and, if your name is on the account, you will build a strong credit record while you are enrolled in college.
    • Mismanaged cards don’t just get you into expensive credit card debt at high interest rates, it can affect you emotionally through depression and that can affect your studies.

Some of these suggestions may make your life easier. Some of them may save you money. The final word is that only you can make decisions and manage your finances. No one will do it for you. Do it right and you will thrive. I don’t like to think about the alternative! 
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Our next free financial literacy workshops are coming August 21st and 28th. 

  • The 21st we will have our Real World Budgeting Class for Teenagers. The class is held here at our main office in our Training Center at 6:30pm. Click her to RSVP! 

  • The 28th we will be offering The Myths of Credit and Credit Repair. This class will also be held here at our main office in our Training  Center at 6:30pm. Click here to RSVP!

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