15 - Money

Living on a Budget

• A budget is a spending plan that tracks all sources of income and expenses during a set period of time

Creating and following a budget allows you to:

• Pay your bills on time
• Cut costs
• Put some money away for emergencies
• Finish college with as little debt as possible

Creating a budget:

• Gather income information
• Gather expense information for college or university
• Gather information about living expenses
• Find out how you are doing
• Make adjustments

Cutting costs:

• Recognize the difference between needs and wants
• Share expenses
• Consider the pros and cons of living on campus
• Use low-cost transportation
• Seek out discount entertainment options
• Embrace secondhand good
• Avoid unnecessary fees

Understanding Financial Aid

Types of aid:

• Grant
• Scholarship
• Work-study program
• Cooperative (co-op) education

Navigating Financial Aid

The financial aid office can you help find:

• The largest amount of money that doesn’t need to be repaid
• The lowest interest rate on loans
• Work opportunities that fit your academic program
• Most pay for college with a combination of types of financial assistance

Qualifying for aid:

• Free Application for Federal Student Aid (FAFSA)
• Must be completed by the earliest deadline of the colleges you’re applying to
• Used to determine the amount of financial aid you will receive

Qualifying for Financial Aid

Steps to qualifying:

• Enroll half time or more
• Complete the FAFSA
• Complete the College Board PROFILE form if required
• Complete any additional required applications
• Follow instructions carefully, and submit each application on time
• Complete the classes and earn the required minimum GPA for the classes for which you were given financial aid

How to Keep Your Funding

• File for financial aid every year
• Meet all filing deadlines
• Talk with a financial aid officer immediately if you or your family experiences a significant loss
• Inquire every year about criteria-based aid
• Inquire about campus jobs throughout the year
• Consider asking for reassessment of eligibility

Achieving a Balance between Working and Borrowing

Advantages of working while in college:

• Earning money
• Developing a credential for graduate school
• Becoming more employable later
• Exploring career options
• Typically earning better grades if working 15 to 20 hours per week

Disadvantages of working:

• It’s very difficult to get great grades if you work full-time while trying to be a full-time student
• Part-time off-campus jobs that relate to your major or career plan are hard to come by
• On-campus jobs typically pay less than off-campus jobs

Student loans:

• Subsidized federal student loans
• Backed by the government
• Loan interest paid by the government while the student is in school
• Unsubsidized federal student loans
• May require you to make interest payments while in school
• May add interest to the amount owed

Parent Loan for Undergraduate Students (PLUS loans)

• Applied for and owed by parents
• Disbursed directly to students
• Usually charge higher interest than federal loans but lower than private loans
• Private student loans
• Offered through banks and credit unions
• Often have stricter credit requirements and higher interest rates
• Charge interest immediately

Managing Credit Wisely

Credit score:

• Derived from a credit report that contains information about accounts in your name

Understanding credit:

• Beware of making only a minimum payment
• Avoid making late payments
• Use credit cards only to build credit and for emergencies
• Managing Credit Wisely

Benefits of debit cards:

• You don’t always have to carry cash
• Your purchases will be limited to the funds in your bank

Disadvantage of debit cards:

• They provide direct access to your checking account