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Financial Know-How for College Students. Presented by Noel Brock. What You'll Learn. Setting a budget Establishing and maintaining good credit Understanding your student loans Protecting yourself against identity theft Becoming financially responsible. Setting A Budget. ?.
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Financial Know-How for College Students Presented by Noel Brock
What You'll Learn • Setting a budget • Establishing and maintaining good credit • Understanding your student loans • Protecting yourself against identity theft • Becoming financially responsible
Setting A Budget ? Did you know that 54% of college students have overdrawn their bank account? Source: www.financialeducatorscouncil.org
Budgeting — A Powerful Financial Tool • An important building block to future financial success is understanding and balancing what you earn and spend. Spend Earn
It's All About Decisions • Setting up a monthly budget to identify what you EARN and what you SPEND will help you recognize where you can make smarter spending decisions. Money coming in Money going out Saving money for an emergency savings fund is key to building a sound financial foundation.
Separating Needs Versus Wants • To stay within your monthly budget, it helps to understand the difference between a NEED and a WANT. • For example: WANT NEED Food Dinner out multiple times a week Cell phone Special ringtones and apps If you find you have a surplus after meeting your monthly needs, make sure some money is placed in a savings account before you spend money on your wants.
Establishing & Maintaining Good Credit ? Did you know 81% of college students underestimate how long it will take to pay off a credit card balance? Source: www.financialeducatorscouncil.org
Understanding Credit • First of all… what is credit? • Credit is an arrangement to receive products or services NOW and pay for them LATER. And with this arrangement, there is generally an additional cost added on to the original amount (i.e., interest). • Source: www.smartaboutmoney.org.
Establishing Credit • Tips to help you establish a good credit history. • Pay off your charges in full at the end of the month. • Pay on time. • Keep your total charges well within your credit limit. • Check your credit report for free every year . • Equifax • Experian • TransUnion • Source: discoverfinancial.com
Understanding Your Credit Score? • A credit score is calculated using information such as how much you've borrowed, how you've repaid your debts and your general borrowing behavior. Source: www.smartaboutmoney.org.
Why Is This Score So Important? • Your credit score is what is used to determine your creditworthiness. • It is used any time you apply for a loan, for insurance, to purchase a cell phone or can even be used for employment. • If your credit score is high, you may receive a higher credit line (on a credit card or for a loan) and may also receive a lower interest rate. • If your credit score is low, you may be denied for credit, insurance, etc.
The Cost Of Using Credit Here are some examples of what you might pay on a $2,000 credit card balance if you’re not able to pay it off in full each month.
Understanding Your Student Loans ? Did you know approximately two-thirds of all students graduate with student loans? • Source:www.wallstreetjournal.com.
Understanding Your Student Loan Responsibilities • Notify your lender if you: • Change your name, address, phone number or Social Security number. • Leave school, re-enroll or transfer to another school. • Change your graduation date. • Enrollment status is less than half-time. Maintain communication with your lender Make your loan payments on time • It’s important to make payments on time to build your credit history. • Delinquency and default can negatively affect your access to future credit.
The Option to Pay Now or Later • If payments are not made while in school, the outstanding unpaid interest amount is capitalized at the start of repayment. The interest is added to the principal balance of the loan. This increases the principal balance, payment amount and total amount paid. • Students who borrow $40,000 and make interest payments while in school and during their grace period can save $4,848 versus making no payments during the same time period. • Those who are able to make interest and principal payments can save even more.
Protecting Yourself Against Identity Theft ? Did you know that 50% of identity theft cases involve phone, utility, bank and employment fraud? Source:www.transunion.com
Protecting Your Identity • Tips to keep your personal information safe: • Never give out personal or financial information on the phone unless you initiated the call and know the company. • Use a different PIN or password for each account. • Always type in a URL yourself. Some email scams ask you to click a link to verify your information. • Install firewalls and anti-spyware on your computer. • When making purchases online, use sites with the prefix "https," which means they are secure. • Source: www.smartaboutmoney.org
Becoming Financially Responsible ? Did you know 41% of students learned their personal finance skills from their parents or at home? Source: www.jumpstart.org.
Establishing Financial Success ? • To learn more about budgeting and credit, visit pathwaytofinancialsuccess.org. • To learn more about Discover Student Loans, visit DiscoverStudentLoans.com. Did you know that only 34% of students report they "never" or "only when necessary" talk to their parents about money? • Source: www.finrafoundation.org .
