<TIP OF THE WEEK>

Tip of the Week

Week of 11/16/2009

Student Money Management Tip of the Week

Choosing the best savings account

Savings accounts generally have fewer options than checking accounts. Because the idea is to save the money in your savings account, it’s not as important that you have 24/7 access, online withdrawal options, unlimited check writing, and other conveniences that can add to the cost of the account. Instead, you'll want to look primarily at the interest you can earn, how long the account may require you to keep the money in the account, and what are the minimum balances.

Typical savings account options include:

Basic savings account: These accounts are easy to open and you have quick access to your money. They usually pay a small amount of interest, and your money is insured up to $100,000 by the federal government. Money market account: The minimum balance to open a money market account is usually more—anywhere from $1,000 to $10,000. You'll earn more interest than with a basic savings account, but you may only be able to write a few checks a month. The account may or may not be insured, so check before opening an account.
Certificate of deposit: When you open a certificate of deposit (known as a CD) you agree to have your money tied up and unavailable for a set period of time in exchange for a favorable interest rate. At the end of the term of the CD, which can range from six months to a few years, you'll receive your initial deposit plus the interest your account accrued. CDs you buy from FDIC-insured banks are insured up to $100,000.

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

Week of 10/12/2009

Student Money Management Tip of the Week

Understanding credit

You may be asking yourself "Should I get a credit card?". It depends. What are your needs? How would you grade yourself on self-discipline? While you may need one, it can get you into trouble.

According to one major student loan provider, close to 25% of today’s college students carry $3,000 or more in credit card debt, and about 10% owe more than $7,000!

You already may have resigned yourself to the fact that repaying school loans will put a damper on your post-graduation budget. Consider the consequences of adding credit card debt to that burden. Using a credit card is just like taking out a series of very small loans.

Credit card companies are not as forgiving as most student loan providers. In fact, their business models are based on the notion that many people will fall behind and develop the habit of sending in payments that cover little more than the interest on their balance. In this scenario, you're a monthly ATM for the lender because they are making money off the interest you pay.

There are, however, certain reasons you might want to carry a credit card.

You hope to establish a good credit score early in life. If this is the case, you need to have the financial resources to pay credit card balances in full each month.
You are able to regard credit cards strictly as an emergency form of money, and have the self-discipline to avoid wavering from that point of view.

Paying monthly credit card balances in full is more than good budgeting practice. It's also a way of “building your case” as a responsible credit customer who one day will want to borrow more significant sums of money.

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

Week of 10/5/2009

Student Money Management Tip of the Week

Adding up little costs

Many people in our society, no matter how much money they make, live paycheck to paycheck. They do this because they spend all the money they make rather than spending their money on what they truly need and then restraining their spending on things they want.

Living within your means doesn’t mean you have to live like a pauper. It just means making decisions in the short term that will lead to long-term results.

For example, when you examine your spending patterns, you may see that you buy a latte every day. True, a latte only costs about $3, but if you buy one every day, that's $21.00 a week. That's still not a lot of money, but over the course of the school year, that will add up to $1092. In four years of college, that's more than $4,368 you'll spend on coffee and steamed milk!

If you gave up your latte habit, or bought an espresso pot for your dorm room, you could put this $4,368 toward a car when you graduate, rent for your first apartment, or clothes you'll need for your first job.

Really, it's the little things in life that you have more control of in your spending. It's pretty hard to avoid having payments for rent, student loans, car payments and insurance, and other life necessities. It's easier to cut out or trim down the little expenses that add up to a lot of money over the long term.

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

Week of 9/28/2009

Student Money Management Tip of the Week

Most experienced credit card users would offer you the same advice: Carry a card that offers a grace period, and pay off the balance in full each month to avoid paying interest.

A grace period is a set amount of time that the credit card company grants you each month to pay off your balance completely free of interest. Credit card companies offering grace periods are required to send your bill at least 14 days before the due date so you'll have enough time to pay.

For instance, if you have a grace period of 20 days and the company credits your payment on day 17 of the monthly billing cycle, you won't be charged interest. If you pay the balance in full on day 25, however, you'll be charged five days of interest on the balance.

Smart credit card habits

Practice these five habits to prevent credit card use from getting out of control:

When you approach preset budget milestones, stop carrying and using your credit card.
Leave your card at home during mall visits.
Keep your receipts and check them against your monthly statements.
Don't use your credit card for expensive cash advances or to pay tuition.
Limit yourself to one card.

Using a credit card responsibly will send a good message to other would-be creditors about you. If you try too hard to establish credit with credit cards, however, you're liable to spend yourself into a hole.

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

Week of 9/21/2009

Student Money Management Tip of the Week

The following are five common reasons people overspend—if you recognize any of these, see if you can weed that behavior out of your financial life.

1. Peer pressure. Many students feel pressured by college friends to spend money they don’t have. Perhaps your friends want to go grab dinner, see a movie, or buy tickets for a concert. You want to go, but you don't have the money. If you can be honest and live within your means, you'll not only prevent yourself from financial troubles, but you also may find that you've helped others have the courage to make better financial choices for themselves.

2. Want to feel good NOW. Your life is full of stress, obligations, demands, schedules, assignments, and papers that are due. Sometimes you just want a break. You want a reward, so you buy some new clothes or a new video game. You might feel better for a while—until you get the bill. Not having money when the bill comes is an even bigger stressor and the cycle starts again.

3. Don't have, or ignore, financial goals. If you've never set financial goals for yourself, you may not have considered the benefits of saving or investing for tomorrow. That makes it easier to spend money now, even though every spending decision you make today will affect the quality of your future financial health.

4. Keep up with neighbors and friends. Your buddy has a flat screen TV? Your friend has the latest designer clothes? We often think we should be able to have everything our friends have, but many times we can't. Some will always have more than others, so keeping up with the consumerism of your neighbors can be an empty path. While we all need rewards and treats once in a while, you'll find a lot more joy in paying for what you can afford than stressing about your upcoming credit card bill.

5. Addictive spending. Just as people become addicted to gambling, alcohol, or the Internet, a person can become addicted to the emotional high of spending. If you find that you are having problems with spending and debt—if you feel like you can't control your spending, or how to spend money occupies a lot of your thinking—get help.

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

Week of 9/14/2009

Student Money Management Tip of the Week

As the fall semester begins, it is a great time to get your finances organized. The SHSU Student Money Management Center would like to give you a few helpful tips on the benefits of using a budget to organize your finances.

Defining your personal budget can lend structure to your spending habits. It is a way of organizing your use of money by thinking in terms of spending categories and setting priorities. A budget establishes boundaries that you can observe to pace your spending—and it helps you recognize spending limits before you exceed them.

Thinking of finances in categories helps you discipline yourself in those moments when you are tempted to choose between something you need and something you merely want. Just as a blueprint guides the building of a house, a personal budget acts as a guidance system to steer you away from costly impulses and money-burning behaviors.

Creating a budget while in college can help you:

Meet personal goals such as studying abroad
Remain better prepared for emergencies
Stay out of debt
Keep accurate and up-to-date records
Prepare to begin thinking about longer-term financial planning

Please visit the SHSU Student Money Management website, contact our office at (936) 294-2600, or visit us in person in our new location in Estill Suite 228 for more information on money management!

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