MoneyManagementfor Students

How to get the most from your money and

prepare yourself for the future!

As you begin college, this is the perfect time to learn important skills that will help you manage your money now and in the future. This brochure will cover a variety of money management topics, including budgeting, credit cards and credit rating, debt management, how to identify financial troubles and finding resources to help.

Monthly budgeting in college

• Keeptrackofwhatyouearnandwhatyouspend.Createamonthlybudgetandtracktoseeifitisaccurate (see example on the inside page).

• Beawareofwhenyouarebuyingtofulfillaneedsuchasfood,comparedtoawantsuchasthelatestCD.Skippurchasingsomewanteditemstoshowyoucandoit!

• Findwaystocutcosts:Useabicycle,getaroommate,learntocookandbuyusedbooks.

• Getorganized:Establishamonthlybill-paymentroutineandsetupafilingsystem.

• Trackyourbankaccount.Becarefulwithyourdebitcard–don’tgointhered.

Credit card tips

• Keepingdebtatbayisthe#1ingredientforfinancialsuccess.Startnow!

• Realizethatthespendingpatternsyousettodaywillhaveanimpactontherestofyourlife.

• Don’thavemorethanone.

• Readallthefineprintofacreditcardoffer,includinginterestrateinformationandwhentheratecanincrease,amountoflatefees,over-the-limitfees,balancetransferfees,etc.

• Itisgoodtouseyourcreditcardsparinglyandbettertouseitonlyinanemergency.

• Trytopayofftheentirebalanceeachmonthtoavoidunnecessaryinterest.Alwayspaymorethantheminimum due.

• Calculatetheannualamountofinterestyouarepaying;multiplytheinterestratebythetotalbalance owed.

• Avoidpenaltiesandfeesastheycanaddupquickly.

• Alwayskeepyourbalanceatleastone-thirdbelowyourcreditlimitincaseofemergency.

Uponrequest,thisdocumentisavailableinalternativeformatsbycallingoneofthesenumbers:

TwinCities:651-296-8012Tollfree:1-888-667-2848

TTY:651-282-2660

TheMinnesotaStateCollegesandUniversitiessystemisanEqualOpportunityemployerandeducator.

BUSO99BR

May2013revised

Sample Budget Based on a $40,000 salary(see ISEEK.org for salary information)

Monthlyincomeaftertaxes $2480 Housing -1000 Transportation -500 Food -400 Otherhousehold -100 Entertainment -200Remainingforstudentloan $280

Student Loans

Total borrowed Estimated Monthly Payment

$10,000 $116

$20,000 $233

$30,000 $349

(Based on 6.8% interest rate, 10 year standard repayment)

In financial trouble?

Herearequestionstodetermineifyouhavetoomuchdebt:

1. Doyouhavetroublepayingyourbillsontime?

2. Doyouonlymaketheminimumpaymentson your credit card?

3. Areyouneartothemaximumonyourcredit card limit?

4. Doyouworryaboutmoneyallthetime?

5. Haveyoueverneededtoborrowmoneytopay your bills?

6. Arecreditorscallingyou?

Seek help

Ifyouansweredyestoanyoftheprecedingquestions,itisimportanttoseekhelp.VisittheWebsiteslistedbelow.Beforedecidingif a financial planner is right for you, do your research. Talk with trusted family and friends tofindafinancialplanner.Consideranon-profit financial counseling services such as www.cccs.org.

Further information

The Web sites below provide further information oncreditanddebtmanagement.Explorethem!

• money.cnn.com/magazines/moneymag/ money101/index.html• bankrate.com• Showmethefuture.org• Yourmoney.cba.ca• Smartmoney.com• Youcandealwithit.com• Smartaboutmoney.org/40moneytips

Types of debt

How you repay debt determines your credit rating, so knowing about the types of debt is important.

Installment loansareforbig-ticketitemssuchascarsorhomes.Installmentloansarepaidinmonthlyfixedamounts and are normally secured (i.e. backed by something of value, such as a car). Payments should be manageable in your budget. Make payments on time as this will help improve your credit rating.

Credit cardsanddepartmentstorecardsarerevolvingcreditlines.Creditcardsareheavilymarketedandthetermsoftenlookbetterthantheyreallyare:Proceedwithcaution!Creditcardshaveamonthlypaymentthatvariesbasedupontotalamountowed.Poorhandlingofcreditcardscanquicklyhurtyourcreditrating.

Student loansareunsecuredinstallmentloans.Exploreallyourfinancialaidoptions,focusingfirstonscholarshipsandgrantsthatdon’thavetoberepaid.Borrowonlytheamountyouneedtogetthroughcollege.Ifyouareconsideringanyprivate(student)loans,besuretofirstapplyforfederalandstatestudent loans. You will be happy to have a lower student loan payment when you begin your career and wanttobuyahomeandacar.SeeISEEK.orgforinformationoncareersandsalaries.Basedonthatsalaryinformation,estimatetheamountofdebtyoucanafford.Ideally,studentloanpaymentsshouldbe10percentorlessofyournetmonthlyincome.Totaldebt,includingyourmortgagepayment,shouldnotexceed36percentofyourgrossincome.

Yourcreditrating

Acreditscoreisbasedonmanytypesofinformationinacreditfile.Lendersuseacreditscoretohelpdeterminewhetherapersonqualifiesforacreditcard,loan,orservice.Generally,thehigherthescore,theless risk the person represents.

• Agoodcredithistorycanmeanlowerinterestrates,ajobofferoradecentapartment.

• Abadcredithistorywillstayonyourrecordforyearsandwillmakeobtainingamortgageorcarloan very difficult.

• Beawareofwhat’sinyourcreditreport.Youcangetyourcreditreportfreeonceayearfrom www.annualcreditreport.com. Your credit report includes your name, current and past addresses and

employment, and all credit (debt) you have, including the current outstanding balance and whether you’veeverbeenlateforapayment.Thereportalsolistsanycompaniesthathavemadecreditinquiries.Challengeanyinformationthatyoubelieveisinaccurate.

• Makingstudentloanpaymentsontimeisoftenthefirststepinestablishingagoodcredithistoryandwilllikely help you when applying for a car loan or home mortgage down the road.

• Payingyourrent,utilitybillsandcreditcardbillsontimeisimportantastheyarealsoconsideredpartofyour credit history.