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Personal Finance for College Students © 2008 BALANCE FINANCIAL FITNESS PROGRAM Use Money Wisely • Become and remain organized • Be aware of spending • Prepare for upcoming expenses Analyze Income • Total all incoming funds: • Job, student loans, grants, scholarships, financial support • Determine monthly amount: • Divide periodic income by number of months • Make cash last • Consider savings from seasonal work Set Goals • Three basic goal types: • Short-term – 1 year or less • Mid-term – 1-3 years • Long-term – 3+ years • Multiple goals – all at once/one at a time • Know goal cost and achievement date • Price/ time frame = $ to save each month • Be prepared for setbacks Develop a Savings and Spending Plan • Analyze the present/prepare for the future • Track spending • Plan for spending and savings • Expenses should never exceed income • Include savings • Decrease expenses/increase income • Understand difference between wants and needs Keep an Eye on Cash • Avoid impulse purchases • Don’t gamble your money away • Track spending Use Your Checking Account Wisely • Handle/monitor account: • Read statements for accuracy • Keep track of deposits, withdrawals, checks, purchases, fees • Use ATM/debit card wisely • Write checks responsibly • Set up automatic bill pay • Balance account • Use overdraft protection Open a Savings Account • Make savings a habit • Save for emergencies – 2-3 months worth of essential expenses • Use automatic transfer of funds Establish Credit • Use credit wisely: • Build history and score • When shopping for credit, look for: • • • • Low APR Long grace period No annual fee Low penalty fees • Get the right card type: • Secured • General purpose (unsecured) • Store and gas Use Credit to Your Advantage • Stay out of debt • Pay more than minimum payment due • Pay on time • Limit the number of cards you have • Build a good credit history: • Credit bureaus report credit activity • Companies score activity Treat Bills Responsibly • Rent – establish good relationship with landlord • Utilities – be careful with use • Telephone – be aware of minutes • Pay all of your bills on time: • Late payment fees • Collection agency • Suspended service Know Your Student Loans • Subsidized – government pays interest for a period of time • Unsubsidized – interest accumulates immediately • Loan Types: • • • • Stafford loans – subsidized and unsubsidized Perkins loans – subsidized PLUS loans – unsubsidized, made to parents Private loans – no government involvement Pay Your Student Loans • Know your grace period – 6 to 9 months • Seek a deferment or forbearance, if necessary • Avoid default • Make the right payment arrangements • Consider forgiveness programs Summary • Get into good personal finance habits now • • • • Avoid over-borrowing Live within your means Save for emergencies and goals Dedicate time to money management BALANCE BALANCE is a financial education and counseling service available as a benefit of credit union membership • • • • Money management counseling Debt repayment options Credit report review 888-456-2227 / www.balancepro.net