NOVA’s Financial Literacy Program Money Management For College Students Presented By: NOVA’s Financial Literacy Program

Topics Budgeting Saving Emergency Funds Credit Cards Compound Interest Credit Reports Credit Scores Responsible Borrowing Financial Aid Federal Student Loans Financial Coaching

Why Do You Need a Budget? Plan for short-term and long-term goals Enables you to review bad spending habits Stay on track and don’t spend money you don’t have Gain control of your finances

Creating a Budget Identify how you currently spend money. Evaluate current spending habits and set spending/saving goals based on long-term financial objectives. Monitor your spending to ensure you stay on track.

Budgeting Exercise Create a personal monthly budget. One example of a budget worksheet is available here. Discuss needs vs. wants

Reduce Expenses Reviewing your personal budget, what are ways you can reduce your expenses? Eliminate small, but unnecessary costs… they add up. Dining out Unnecessary upgrades (movie channels, newest iPhone, etc.) Reduce larger expenses Can you save by living in another place? Can you reduce your transportation expenses?

Creating a Savings Plan Try to balance your budget and save the surplus. Aim to save at least 10% of your income. How much do you need to save and by when to cover large expenses? How much is that per month? Set up an emergency fund to cover at least 3-6 months of expenses.

Selecting a Savings Account Get a decent interest rate (currently around 1.0%) No fees No minimum balance FDIC Insured Compare banks on websites like www.bankrate.com Then set up direct deposit to automatically save a portion of your pay check.

Pay Down Debts After establishing an emergency fund and setting aside enough funds for short-term expenses start paying down your debts. Usually you want to start paying off the debt with the highest interest rate first. May also want to consider: Length of the loan term (longer terms mean more interest) Impact on your budget/monthly cash flow Financial calculators can show how much interest you’re saving or paying.

Selecting a Credit Card Lowest APR A co-signer may lower your rate No annual fee Request a credit limit that meets your needs Compare Reward Programs Read the fine print! Search for cards at www.creditcards.com

Managing Your Credit Card Live within your means! Pay off your balance in full each month. Avoid fees and finance charges Compound interest Late and returned payment fees Over-limit fee Cash advance and balance transfer fees Example of just paying the minimum balance: http://www.investopedia.com/articles/01/061301.asp

Factors that Affect Your Credit Score Having good credit can make it cheaper and easier to borrow when you need a loan.

Checking Your Credit Report Get your Free Annual Credit Report at: www.annualcreditreport.com 3 Credit Reporting Agencies: Equifax Experian TransUnion You can request a free credit report every four months if you alternate between the three credit reporting agencies.

Responsible Borrowing Only borrow what you truly need and can afford to repay! Try to keep total student loan debt below the salary you expect to have your first year after graduation. Contact your loan servicer if you have trouble making loan payments to discuss your options to avoid default. “Buy what you don’t need and before long you will sell your necessities.” - Benjamin Franklin

Source: www.bankrate.com 11-30-15 Consider Federal Student Loans Before Expensive Credit Cards and Alternative Loans 3.76% is the current fixed rate on Federal Direct Stafford Loans. Stafford loans typically offer better repayment plans with deferment and forbearance options. Alternative loans often have variable rates or higher fixed rates. Source: www.bankrate.com 11-30-15

Apply for Financial Aid You may qualify for aid for your college & living expenses! Types of Financial Aid Grants Scholarships Work-Study Student Loans

How to Apply for Financial Aid Students create a FSA ID. Parents of dependent students create a FSA ID. 2) Complete the FAFSA at www.fafsa.gov Reapply each year by NOVA’s priority filing date. Check your MyNOVA “To Do List” www.nvcc.edu > MyNOVA > VCCS SIS: Student Information System > Student Center

Loan Planning Form Use NOVA’s Loan Planning Form available at: www.nvcc.edu/forms/pdf/125-346.pdf Review loan history Determine the impact of additional borrowing Review career and income projections Start planning how to repay student loans

Financial Coaching Free financial coaching services are available! Financial coaching helps link behaviors to goals and values. Coaches can help you create a personalized financial action plan. Contact Diana Yacob, AFC® for details. dyacob@nvcc.edu  

CashContest Sign Up for Financial Avenue at https://fa.financialavenue.org/sign-up/ by entering NOVA’s access code: FinLit Provide your NOVA student email address (ending in @email.vccs.edu) during the registration process and provide your 7-digit NOVA student ID# when creating your new student account. Log in to Financial Avenue as a student at https://fa.financialavenue.org/fa-login/ using the username and password you created in the step above. Under “Courses” on the left side of the webpage select the course you would like to complete.   Complete the modules with a post-test score of at least 70% to be entered in the $100 drawings. Eight $100 grants and bookstore gift cards will be awarded to current students who successfully complete the modules by their respective deadlines. CashContest Rules at: blogs.nvcc.edu/financial-literacy

Wrapping Up Write down a few things you learned today Wrapping Up Write down a few things you learned today. What will you do based on what you learned? Questions?

Making Tough Financial Choices http://playspent.org/ http://playspent.org/