CHAPTER ELEVEN PROSPER: Managing Your Money and Your Debts Wisely GUST 1270 College and Career Planning

UNIT 11 OBJECTIVES This chapter can help you:  Evaluate types of loans and grants  Make decisions about borrowing money  Construct and use a budget  Protect yourself from identity theft  Understand your credit score  Practice fiscal fitness

TYPES OF FINANCIAL AID Grants  Money you don’t have to repay Work study  Money for work you do at the college that does not have to be repaid Loans  Borrowed money that you must repay with interest

ELIGIBILTY FACTORS Have financial need Meet educational requirements Be enrolled in a degree program Be a U.S. citizen Have a social security number Make satisfactory academic progress Sign a statement of educational purpose Sign a statement of updated information Males must register with Selective Service Drug convictions can affect certain aid

Types of Financial Aid Pell Grant Federal Supplemental Educational Opportunity grant (FSEOG) Stafford Loans Unsubsidized Stafford Loan PLUS loan Work Study Hope Scholarship tax credit Perkins loan

TIPS FOR APPLYING FOR AID Pay attention to deadlines Read instructions carefully Complete all of and proof your application Submit required documentation Never lie about your financial situation Apply early Meet with a Financial Aid Officer

TIPS FOR APPLYING FOR AID (cont’d.) Look for information on private aid Apply for admission along with aid Try electronic filing Keep copies of your annual tax returns Complete the FAFSA Apply for as many sources as possible Failure to pay back Financial Aid is called defaulting

Drugs and Money If you have a felony drug conviction they you are not eligible for financial aid. You can however complete a drug conviction worksheet, for an appeal.

CREDIT CARD DEBT The worst kind of debt 76% of college students have credit cards Average balance carried is $2,169 Students with high debt have lower GPAs Students with high debt have higher dropout rates The average credit card debt for a college student is more than $ Only use your credit card if it is absolutely necessary.

Prioritizing your Finances College students typically have very little extra money to manage. You should establish a budget and live within your means. Credit card debt is the worse kind of debt.

B is for Budgeting Know where your money is going. Many people just spend and spend, without knowing where it’s going. One of the main reasons to budget is to help you determine how much you are going to need for college. You must determine how much income you earn monthly. If your total expenditures figure is larger than your monthly income (as is the case for many students), you are heading for a financial crisis.

TIPS FOR CUTTING YOUR EXPENSES Control impulse buying Carpool, take public transportation, walk Stop eating out Use coupons and buy during sales Live more simply

Borrowing Money If you need a loan the best place to borrow money is from your bank or credit union. You should not borrow from a car loan title company, rent-to own contract, pay day loan or a loan shark. These can create more financial problems

Latte Factor The Latte Factor calls our attention to how much money we carelessly throw away when we should be saving and investing for the future. For example, if you buy one McDonald’s Vanilla milk shake at $1.81. Then your Latte Factor is $ per year. Formula: ($1.81 x 7days/weeks x 52 weeks/year)

Credit Score This is the single most important factor in your life. Whatever you need or plan on acquiring you will have to have a good credit score.

MINIMIZING IDENTITY THEFT Carry only I.D. and cards that you need at the time Sign credit cards in ink (and write Check ID on back) Use only secure web sites for purchases Do not write you PIN #, SS # or passwords down Memorize passwords Have a friend check you mail when you’re away Destroy all carbon copies Watch for “shoulder surfers” at ATM machine Avoid using your Social Security # Check your credit file periodically

UNIT REFLECTION Avoid the credit card trap Know exactly how you’re spending your money Protect your credit score Learn about scholarships and grants Understand student loan requirements Don’t borrow money unless necessary Review your credit report periodically Use only one or two credit cards Pay off credit cards each month Keep credit card numbers in a safe place Seek credit counseling when necessary

JUST FOR FUN !! Character Illustration by Christian O’Brien