College Financial Education
Your (Financial) Life
Why are you here?
What motivates you . . . to save money? . . . To spend money?
• What financial troubles have you seen with family
• What financial problems would you like to avoid?
• What do you need to know to achieve personal
financial success? How to make money, save
money, and protect your money ?
Check out these 1 credit classes:
– GBUS 102 Personal Money Management,
– GBUS 103 Personal Savings,
– GBUS 104 Personal Credit,
– GBUS 108 Personal Investments
• Learn how to set up your personal financial goals for:
– emergencies, college funding, unexpected living expenses,
– car, wedding, house, new baby, and retirement income.
Activity -- Make 2 lists:
Financial Dreams Financial Nightmares
You are not alone. Many people have similar concerns.
•Setting Personal Financial Goals
•Learn about Spending Plan
•Credit Do’s and Don’ts
•Money saving tips
Your (Financial) Life
Your Financial Life
Income School life’s ups and
College Starting a If you’ve been good
about saving, you will
You’re starting family You move towards enter retirement debt-
$60,000 Childhood to earn money your peak earning free and comfortable
(not much) years and use this for the rest of your life.
and getting the time to grow your If you haven’t, the
You begin by education wealth. only option is to
being a financial (expensive) to Your earnings start You upgrade your Your income could continue working if
drain to your earn more. to take off and you house and save for fall well before you you can. Healthcare
$40,000 middle-class This is when settle down to start your kids’ reach retirement age. becomes a big
parents at you start with a family. With that education You continue to expense.
$10,000 a year credit cards comes your first ($100,000) and accumulate for
or $184,000 and student house (down your retirement ($1 retirement and plan
until you leave loans. payment of about million). You may how your nest egg will
the roost—and $30,000), be unemployed last for the rest of your
$20,000 that doesn’t mortgage, and the (by choice or not) life. Health issues
include college kids who now drain at times. You may start to crop up and
tuition. you $10,000 a divorce. You may you look to protect
year. You need an have to care for your health and
emergency fund of your parents. All assets. You may work
six months. You these could set longer because you
protect your assets you back. need to or because
with insurance. you want to.
10 20 30 4 40 50 60 70 80
Set Exciting Goals
• What do you want to achieve this
• Over the next year, what ONE
occurrence would have to happen for
you to feel you’ve made significant
• Write this occurrence as a goal.
• Describe why it is important to you.
• Describe how you will feel when you
have accomplished this goal.
How can you save and
what is the effect of saving every year?
• What if you cut out candy and pop, or fast food
meals, or one sit-down restaurant meal a week,
or 5 fancy coffees a week?
• Your savings would be $25 a week.
• What will you have in 40 years?
Start Saving NOW. . . Saving $25 a week for 40
years at 5 or 8 % can build quite a nest egg !
Interest Savings Number of
rate per week Years Future Value
5% $25 40 $152,602.02
5% 50 40 $305,204.03
5% 75 40 $457,806.05
8% $25 40 $349,100.78
8% 50 40 $698,201.57
8% 75 40 $1,047,302.35
• Using automatic savings deductions through work,
bank or credit unions builds a larger nest egg for future
• Take the GBUS 108 Investing class to see how to
earn higher investment returns.
• Helps you achieve all your financial goals
• It can help you get control of your life
• It can relieve stress and stop conflict in a family
• Start as a student even if you don’t have much
• It should be a lifetime habit
It’s a marathon not a sprint –
plan your saving.
How Can you Start Saving?
Develop a Spending Plan. . . .
1. List all your income.
2. Accumulate all your expenses (receipts, credit card bills,
checking account register, etc.)
3. Categorize it as fixed, variable and discretionary.
4. Create a debt reduction plan. It’s never too early to start
paying off your student loan.
5. Consolidate all these into an annual spending plan.
6. Compare your spending to the recommended student
7. Adjust your spending plan so you can meet your spending
8. Live by your spending plan for 3 months and then check
how you’re doing.
9. Check your spending plan at the end of the year. Did you
meet your budget?
10. Do it again for next year. Keep at it. It’s a marathon not a
COLLEGE SPENDING PLAN
FIXED EXPENSES Activity: Create a Spending
Rent or College Room and Board
For an online college student budget, check out:
Books, equipment, supplies, tutoring
Cell phone, long distance calls
Transportation (including trips home)
Health care (prescriptions, doctor,
Snacks, drinks, restaurant meals
Personal care (haircuts, skin care, etc.)
Compare to UW Student Budget
Live away Live at home Non-
from home traditional
Tuition and fees 6385 6385 6385
Room and board 8337 2804 11742
Books and supplies 1008 1008 1008
Personal expenses 2265 2265 2265
Transportation 396 396 1443
TOTAL 18931 12858 22843
Compare to Community College
Puget Sound Area Live at home Non-traditional
Tuition 4728 4728
Fees 75 75
Books 1000 1000
Room and Board 2804 11742
Personal Expenses 2265 2265
Transportation 396 1443
TOTAL 11268 21253
BCC estimates based on UW data
What students owe by college
Spending/Savings Tips for College Students
• Leave the car at home. Walk or use public transit.
• Buy used books.
• Comparison shop for your computer and keep it safe so
it doesn’t get stolen.
• Comparison shop your cell phone plan. Use long
distance calling cards.
• Go to free entertainment or get student discounts.
• Rent DVDs instead of going to movies.
Bucking the debt generation – good
Student Credit Card Facts
• Credit card debt is 16% of debt when students
• Students have an average of 4 credit cards
• 33% of students have over $2000 in outstanding
• Most students underestimate the amount of
credit card debt they have
• Most students don’t pay their credit card bills in
full at the end of the month
Work-spend Rat Race
Percent of Average
Work Students Balance Anxiety*
Do not work during school year but work
during vacations 19% $ 942.00 3.3
Work 1-10 hours per week 12% $ 782.00 3
Work 10-20 hours per week 34% $ 926.00 3.4
Work more than 20 hours per week 31% $ 1,661.00 2.4
Do not work at all 5% $ 714.00 2.8
Lower score means higher anxiety!
Don’t work to spend, it can hurt your grades and your
chances of finishing college on time or at all.
Source: Nellie Mae 2005 Study of undergraduate students
and credit cards 18
Students who work a lot of hours feel:
• They can’t select courses they need
because conflicts with work hours
• They study less
• Work hurts their grades
• They are more stressed
• They are more likely to drop out or fail out
Learn More. . .
Are you ready to play the Credit Game?
Credit Card Do’s
1. Credit cards encourage you to spend. So if you have problems with
spending too much, use cash.
2. Credit cards are a very expensive way to borrow money. Pay all credit
cards on time and in full. If at all possible, do not maintain outstanding
balances. Do not use features such as cash advance.
3. Do not spend up to your credit limit.
4. Opt out of credit card offers by calling Opt out 888-567-8688 or going to the
5. Before you sign on to a credit card, use the credit card evaluation form to
evaluate all fees and charges.
6. Keep only two credit cards on you to minimize loss.
7. Keep a record of your account numbers, their expiration dates, and the
phone number and address of each company in a secure place. Some
fraud experts recommend that you photocopy the cards you carry with you.
Credit Card Do’s
8. Protect your card and your account number. Sign your credit card when it
arrives. Don’t lend your card to anyone. Don’t give out your account number
unless you know you are calling a company that is reputable. Destroy
incorrect receipts and copies.
9. Save receipts to compare with billing statements. Open bills promptly and
reconcile accounts monthly, just as you would your checking account.
10. Report any questionable charges promptly and in writing to the card issuer.
Do not pay for purchases where product was not delivered or defective.
11. Correct any billing errors by contacting your credit card company as soon as
12. If you use your credit card to shop online, experts advise installing and
periodically updating virus and spyware protection and a "personal firewall" to
stop thieves from secretly installing malicious software on your personal
computer remotely that can be used to spy on your computer use and obtain
13. If you lose your credit or charge cards or if you realize they've been lost or
stolen, immediately call the issuers. Many companies have toll-free numbers
and 24-hour service to deal with such emergencies. By law, once you report
the loss or theft, you have no further responsibility for unauthorized charges.
Managing student loans
• 55% of borrowers felt burdened by the
• 54% would have borrowed less if they had
to do it again
Student Loan Do’s
1. Save as much as you can using tax-advantaged educational savings plans
before you go to college.
2. Make sure that you have a good chance of earning the income you need to
pay off the debt.
3. Only borrow as much as you need.
4. Fill out the Free Application for Federal Student Aid (FAFSA) for federal
loans first. They are the cheapest and have the most options.
5. Comparison shop for private loans and evaluate APRs. Check out the
maximum monthly payment if you are considering a variable rate.
6. Ask for loan features that will help you if you miss a payment or if you have
a good on-time record.
7. Create a plan for repaying your loan when you take out the loan.
Maintaining Good Credit
1. Check your credit report annually by
requesting a free credit report from Computing your credit score
www.annualcreditreport.com or contacting credit used
the three credit reporting services. Ask to
correct any errors in writing to the credit New credit
rating service. history
2. Opt out of pre-approved credit offers by
calling 888-5-OPT-OUT (888-567-8688).
3. Pay all your bills on time and don’t spend to Length of
your credit limit. Check to make sure that 15%
your creditors post your payments in a timely
4. Establish an emergency fund of 3 to 6 Amounts
5. If you’ve been denied credit, check to see if
the lender has violated any laws. File a Source: www.myfico.com
complaint if you feel this is the case.
6. Maintain accurate records and reconcile your
Coping with Credit Problems
1. Stay calm and work your way slowly and surely through the problem.
Don’t delay. Take action now and make it a priority.
2. If you feel that an error caused your credit problem, tell the credit rating service. Be
diligent about monitoring your credit report.
3. Seek financial counseling right away. Use free counseling services that are listed in
www.usdoj.gov/ust. Be aware of credit counseling services (even though they claim
to be nonprofit) that charge you fees.
4. Make a list of all the debts you owe with the creditor names and addresses. Call your
lenders and creditors. Let them know you're having financial difficulties.
5. Prepare a realistic spending plan to pay down your debt.
6. If you have savings, consider using it to pay as many bills as you can. Consider
selling some assets. Consider getting a second job to pay off your debt.
7. It might take longer than you thought for your financial crisis to go away. Be
persistent with your creditors and payment plan.
8. As you start to pull yourself out of the financial crisis, remember to set aside money
Protect your money.
Protect your Money--Do’s
• Protect all your financial information. Don’t give out your social security number
unless absolutely necessary. Most places will give you another identity number if you
ask for it.
• Keep track of your credit card spending and check your statements very carefully. If
you find a charge for something you did not buy, contact your credit card company
• Watch your debit card charges and balance your checkbook every month. In general
keep good records.
• Burn your mail, or use a shredder to cut up the receipts and other papers you throw
into the garbage. Don’t leave outgoing mail in unlocked mailboxes.
• Avoid filling out forms for contests and clubs. The ―contest‖ may simply be a way for
someone to collect your private information.
• Protect your computer with anti-virus software and firewalls especially if you use it for
online banking or purchasing.
• Don’t store financial information on web services.
• Check your credit report every year.
Learn More. . .