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How to Avoid Being a Shopaholic! Financial Intelligence for College Students Russell Conwell Center Fall 2009 Purpose of this Presentation The purpose of this online workshop is to equip students with the knowledge and tools to be financially savvy while living and learning in the college environment! This online workshop will include a series of self- assessments to allow you to better understand your spending habits and current financial standing. What Type of Spender Are You? Let’s Find Out! http://tiny.cc/tid9a 5 Types of Spenders #1- The Avoider This person avoids making decisions about money. #2- The Collector This person enjoys making money and spending money. #3- The Spender You enjoy spending money and think little about your financial decisions. #4- The Thinker You care about others who may be less fortunate that yourself. Your level of empathy may direct your spending habits. #5- The Miser You like to save money but do not spend it. Know that you know what kind of spender you are you can utilize various techniques to improve your saving and spending habits. Question True or False Banks are willing to help college students learn to become financially intelligent? Answer True! Many banks provide college students with savings and checking accounts that allow them to build good credit and stay out of debt! Financial Intelligence In College Shop around for a bank that caters to students! ◦ Find a bank that offers free checking and savings accounts. ◦ No excess fees such as ATM withdrawals, check fees or transfer fees. Use a debit card. ◦ A debit card takes the funds directly out of your account to ensure you have the money! Balance your accounts ◦ Overdrawn accounts are charged an additional fee. Utilize free ATMs ◦ Wawa ◦ The Student Center Analyze This! Knowledge is Power! Please take several seconds to complete the following budget sheet in order to better understand your monthly budget and spending habits. Budget Calculator: http://www.youcandealwithit.com/budget ing_tools/budget_calculator.shtml Ways to Manage your Monthly Budget Record everything you purchase in one month. Highlight essential items. Try to cut back on “frivolous” items. Be smart about how you spend your money! Leave your credit card at home! Question? Name at least one advantage of having a credit card. Answer By using a credit card wisely, one can build credit thus enabling that individual to be able to take out loans for cars, houses and other larger purchases. Credit Card Intelligence Find a credit card with a low interest rate and no annual fees. ◦ Only use this card for emergency situations or large unavoidable purchases (books). Pay credit card bills on time. ◦ By paying your bill on time, you gain good credit and you avoid expensive fees. Find a credit card that will reward you for your usage (although usage should be minimal!) http://www.creditcards.com/ Don’t be fooled by Gimmicks. ◦ While some credit card offers may look appealing, make sure you understand the fine print associated with each card. What is Credit? Credit is defined as financial trustworthiness or “confidence in a borrower's ability and intention to repay”. When you take out a loan, banks want to ensure that you will be able to repay the loan in a timely manner. The credit a person has typically determines how much they will be permitted to borrow, for what purpose, for how long, and at what interest rates. (2009). Credit and credit management. Retrieved from http://www.dcu.org/streetwise/credit/what.html What is a credit score? Credit cards are a way to spend “future” money …Money you don’t have! A credit score is a statistical means to assess how likely a borrower is to repay a loan. The credit score is based on the data available in the borrower's credit report and measures the relative degree of risk a potential borrower represents to the lender or investor… An interest rate will be determined by your credit score. If you have no accrued any credit, than you will most likely have a high APR (annual percentage rate) 15% or higher. Credit card companies make their money off of your interest! So what does this mean? If you have a credit card with a APR of 16% and you have a bill of $1,000 dollars (easily accrued through book purchases ect) …then you will actually pay $1,613 dollars! If you pay the minimal balance, this will take you 6.7 years to pay off…and that is without purchasing anything else! Tips for Using Credit Cards Prioritize your spending. Before you purchase something ask yourself if you really need it. Pay the entire credit card balance when it is due. If you are unable to pay the balance, pay as much of the balance as you can. Analyze your spending habits and avoid unnecessary purchases. Never lend your credit card to a friend. And remember… Many potential employers check credit scores… They want to ensure that those professionals they hire are mature, responsible and trustworthy! Question? What are the different types of financial aid one can receive to pay for college? Answer Student Loans Grants Scholarships Work Study Work Types of Student Loans Stafford Loan ◦ Subsidized- Government makes interest payments during grace period so any payment you make goes directly towards principle balance. ◦ Unsubsidized- Loan continues to accrue interest over the grace period adding to your principle balance. Perkins Loan- ◦ Need based loan that carries a fixed interest rate of 5% for the duration of the ten-year repayment period. ◦ Loan does not accrue interest during grace period. Parent Plus Loan- ◦ A loan taken out by a parent/guardian in order to assist with paying a dependent’s undergraduate education ◦ Undergraduate student must be enrolled full- time in order for the parent to be eligible for this loan. Additional Ways to Pay! Scholarship ◦ Scholarships are awarded on various criteria usually reflecting the values and purposes of the donor or founder of the award. Grant ◦ Grants are a form of financial aid, based on need, which you do not have to repay Work Study ◦ Money that is earned through part time employment at the university or college intended to assist with the payment of college. For additional information on opportunities such as these at Temple University, visit the student financial services website at: http://www.temple.edu/sfs/ FAFSA!!!! FAFSA stands for Free Application for Federal Student Aid. One must fill out the FAFSA in order to receive loans from the government. ◦ The earlier you complete the FAFSA, the better! However, the due date is March 1, 2010. If you are late, you will receive less financial aid! The FAFSA requires the following information ◦ Social Security Number ◦ Federal Tax Information ◦ Information on savings and investments for yourself and your parents if you are providing parental information. http://www.fafsa.ed.gov/ Question True or False: It is possible to save money while in college? Answer True! By making simple changes to your daily spending habits you can save hundreds of dollars a year…while still paying for college! Want to Save Money? Take Advantage of Temple University Services Use Temple University incentives and programs to purchase large items needed for class (computers, software, etc.) http://www.temple.edu/cs/shoppersguide/shoppersguide_05.html #vendors Eat in the dining halls rather than at the food trucks or restaurants on and around campus. Take advantage of campus activities and student discounts. http://tiny.cc/oSLYQ Attend Free Food and Fun Fridays at Temple University! http://tiny.cc/LhME6 Books Rent your text books from a service such as http://www.chegg.com/ Go on half.com or amazon.com to purchase used books for much cheaper. Use diamond dollars to purchase books. ◦ They don’t charge you tax! Shop early and purchase used books at the University bookstore. Sell those books back that you will not use in the future. Be knowledgeable about cheap activities in the City! Philadelphia Restaurant Week ◦ Happens two times a year…great way to visit the expensive restaurants on a budget! Free concerts/open mic nights ◦ Penn’s Landing ◦ Milkboy Coffee ◦ World Café Live Student discounts ◦ Museums, restaurants, movies, etc. ◦ Phillycampus.com discount pass- accepted at various locations around the city. Pick yours up at Temple Fox School of Business. http://www.uwishunu.com/ Great website for events in Philadelphia Simple Ways to Save Some Cash! Go to a Matinee Movie. ◦ Movies before 6pm are cheaper Rent movies from your local library. ◦ Movie rentals from libraries typically cost much less than renting from a movie store. Brown bag it! ◦ Prepared food or convenience items cost more so bring your lunch from home! Utilize websites like freecycle.com or craigslist.com for used items. ◦ When looking for larger items such as furniture, appliances, etc. purchase used items to save money. Make your own coffee ◦ A daily $3 latte adds up so make your own coffee or fill up a thermos at the cafeteria Financial Intelligence Quiz What is the advantage to owning a credit card? What does APR stand for? Name two ways you can use a credit card intelligently? What is a credit score? Name two ways you can build good credit. What does unsubsidized mean when discussing student loans? Name three ways to pay for college. What information is needed in order to complete the FAFSA. Where is the Student Financial Services Office here at Temple University? True or False: Work Study is part of an individual’s financial aid package? Name four ways you can save money while in college. Name one free activity you can take part in over the weekend. Please answer each question fully and turn in to a student preceptor or email answers to firstname.lastname@example.org in order to receive credit for this workshop. Question? Can you be financially intelligent? Answer Yes, you can! With an awareness to your spending habits and the right tools and information you can be financially intelligent!
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