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Money Management Guide for Students: Building Financial Independence

Discover the tips and tricks for managing your money effectively as a student. Learn about sources of income, financial aid, budgeting, and saving strategies to secure your financial independence. Take control of your finances and pave the way to a successful future.

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Money Management Guide for Students: Building Financial Independence

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  1. Managing Your Money • The American economy is very complex. • Dealing with it, both in school and out, takes care, thought, and foresight. • Dealing with money is not something to be taken lightly. Manage your money, don't let it manage you!

  2. Recognize the Incredible Value of School • The majority of students who drop out of college have a GPA of 2.5 or above! • Being a great money manager frees you up to focus on your education. • Earning a degree is one of the most valuable things you can do for yourself. • Money is often a necessary sacrifice during your college experience. • Your education will pay off tremendously and make it entirely worth it.

  3. Sources of Income:Get a Job • Try to find work you like to do • Work with caution • Look for jobs with light work loads • Be your own boss • Ask about sudden schedule changes • Be assertive in seeking your ideal job

  4. Work With Caution • It takes a lot of money to go to college, but it also takes a lot of studying and hard work. • The same effort to earn the required fees may hinder one’s progress towards actually earning the degree itself. • Students who work long hours are more at risk for failing and dropping courses. • Failing and dropping courses costs money– money you cannot get back.

  5. Investigate Work Study and Internships • Work study programs are funded by the federal government • They enable you to work on campus or in the community • Awarded based on financial need • Check for internships in your chosen field of study • Good experience and respected by future employers Earn while you learn...

  6. Sources of Financial Aid • Grants • Scholarships • Loans • Win the Lottery (right!) There is money out there, but you must look for it!

  7. Grants • Gift Aid • Federal Pell Grant • Based on financial need • No academic requirements or GPA minimums • Requires filling out the Free Application for Federal Student Aid (FAFSA) • Forms and information are available in your school’s financial aid office. • Search the Internet

  8. Scholarships • Gift Aid: monetary award that is not paid back. • Rewarded on the basis of -Academic merit - A talent or skill -Group membership -Religious affiliation • Putting together scholarship applications can pay off substantially • Be wary of scholarship scams • Check with your financial aid office • Check the Internet

  9. Student Loans • Loans must be paid back. • The Stafford Loan & Perkins Loan: federal loans for students. • Based on financial need. • PLUS program for parents • Most government loans offer low interest rates and deferred payment options. • Requires filling out the FAFSA. • Loans are available through other financial institutions. Remember that loans require repayment, often with interest!

  10. Recognize Income and Acknowledge Expenses • Count it all: current and summer job income, money from parents, gifts, and financial aid. • Know where it goes: regular expenses and variable expenses • Be honest with yourself • Keep careful track of themoney

  11. Learn Ways to Save • Large scale cutbacks. • Cheaper housing. • Additional Roommates • No car–make use of public transportation. • Small scale saving methods. • Clip coupons • Shop at discount stores • Cook most meals • If you don’t have it, don’t spend it. Saving money is all about making smart choices.

  12. Balancing Your Income and Expenses To determine a budget, ask yourself questions about your financial needs: • your past and current earning • your debt • your expenses • What do you need vs. what do you want? • your plans for the future

  13. Proactive and Reactive Budgeting • Budget First, Spend Later • Anticipate upcoming expenses and make sure they don’t exceed your projected income. • Set limits on what you will spend in each expense category. • Set something aside for unexpected emergencies. • Spend and Reflect • Look back at what you earned and spent. • Assess where your money went. • Make necessary adjustments (save or recover).

  14. Where to put your hard-earned money… • Checking accounts enable you to draw money regularly from your account funds through the use of checks. • Savings accounts exist for the primary purpose of putting money in and rarely, if ever, taking it out. • Money market accounts are a more sophisticated type of savings account. • Check for bank fees associated with each type. ?

  15. Balance Your Checkbook • Use your checkbook register. • Fill in all deposits and expenditures. • Record information immediately. • Include ATM withdrawals and check card use. • Reconcile monthly statement with register. • Recognize outstanding checks. • Note closing date on statement for deposits and checks not included. • Be aware: Banks make mistakes! • Follow up discrepancies. • Remember: if you call in for your balance,your bank doesn’t know your outstanding checks! Keep it balanced: NO BOUNCING!

  16. Credit: Know the Basics • Work to establish good credit. • Handle your accounts successfully. • Remain stable in your residence and job if possible. • Make timely payments for rent, utilities, loans, insurance, and credit cards. • Co-signing a loan with anyone means you are responsible should they default. • Pay credit card bills in full. • Consider what your credit report will communicate to those who view it–such as future employers, mortgage lenders, etc.

  17. Credit Cards and College Students • If used effectively, credit cards can be beneficial, but they can also be deadly: • With a credit card, you are likely to spend one third more. • More than $400 billion is owed on active credit cards. • Credit card debt has grown in recent years by more than 10 percent per year. Before you lay down the plastic, THINK IT THROUGH!!!

  18. Avoid Problems with Credit Cards • Calculate the costs of credit. • Shop around for the best interest rates and waived annual fees. • Read the small print regarding fee and rate increases. • Pay the balance every month • Paying interest adds up quickly. • You will pay significantly more and take substantially longer to pay your balance off if you only make the minimum payment. • Use credit only in emergencies.

  19. Getting and Staying Out of Financial Trouble • Protect your financial information. • Understand the power of interest rates on credit cards. • Deal with debt collectors sooner rather than later. • Don’t work too many hours to pay off debt. • Buy what you know you need, not what advertisers say you have to have. Where does the money go?

  20. Invest for the Future • Numerous investment options exist. • You should only consider investing if you have substantial savings. • Mutual funds require only a small regular investment, yet can yield dramatic results over time. • Investments are designed for long-term financial gain.

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