Managing Your Money

What are your financial goals?

Whatever it is you plan to do in your future, whether work or other activities, your financial goals in the present should be realistic to enable you to fulfill your plan. Taking control of your personal finances begins with thinking about your goals and deciding what really matters to you. Here are some things to think about:

• Is it important for you to graduate from college without debt? Is it acceptable to you, or necessary, to take some student loans?

• What are your priorities for summers and other “free time”? Working to earn money? Taking nonpaying internships or volunteering to gain experience in your field? Enjoying social activities and time with friends?

• How important is it to take a full load of classes so that your college education does not take longer than necessary?

• How important is it to you to live in a nice place, or drive a nice car, or wear nice clothes, or eat in nice restaurants? How important in comparison to your educational goals?

There are no easy answers to such questions. Most people would like enough money to have and do what they want, low enough expenses that they don’t have to work too much to stay on budget, and enough financial freedom to choose activities without being swayed by financial concerns. Few college students live in that world, however. Since you will have to make choices, it’s important first to think about what really matters to you—and what you’re willing to sacrifice for a while in order to reach your goals.

Most college students work while in school. Whether you work summers only or part time or full time all year, work can have both benefits and drawbacks. The difference may result as much from the type of job you work as from the number of hours you work.

How do you manage a budget?

Budgeting involves analyzing your income and expenses so you can see where your money is going and making adjustments when needed to avoid debt. At first budgeting can seem complex or time consuming, but once you’ve gone through the basics, you’ll find it easy and a very valuable tool for controlling your personal finances.

Why create and manage a budget? Going to college changes your financial situation. There are many new expenses, and you likely don’t know yet how your spending needs and habits will work out over the long term. Without a budget, it’s just human nature to spend more than you have coming in, as evidenced by the fact that most Americans today are in debt. Debt is a major reason many students drop out of college. So it’s worth it to go to the trouble to create and manage a budget.

Managing a budget involves three steps:

1. Listing all your sources of income on a monthly basis

2. Calculating all your expenditures on a monthly basis

3. Making adjustments in your budget (and lifestyle if needed) to ensure the money isn’t going out faster than it’s coming in

How can a job can help you?

In addition to helping pay the bills, a job or internship while in school has other benefits:

• Experience for your résumé

• Contacts for your later job search network

• Employment references for your résumé

Work or internship experience related to your future career has significant value. Not all students can find such opportunities in their community, however. But even a job or volunteering outside your field can have value and say something about you to future employers. Your job may demonstrate that you have initiative, are responsible, are a team player or can work independently, and can take on financial responsibility.

Potential future employers will check your work references. Having an employer from your college years say you did a good job, were always on time to work, and were honest and responsible in doing your job definitely gives you an advantage over students who graduate without having worked at all.

Aims Community College Student Job Board - https://www.aims.edu/departments/career-services

• This is a centralized online job board for Aims students and alumni. There are job advertised that are on campus and in the community.

How can you differentiate spending on essentials versus optionals?

More people get into financial trouble because they’re spending too much than because they’re making (or receiving) too little. While spending may seem a simple matter—“I need to buy this, I’d like to buy that”—it’s actually very complex. America is a consumer society, and we’re deluged by advertisements promising that we’ll be happier, more successful, better liked by more people, sexier, and everything else if only we buy this. Companies have spent billions of dollars researching how to manipulate our buying behavior. No wonder it’s so tough to resist these pressures!

Most people spend by habit, not really thinking about where their money goes or how quickly their spending adds up.

• If you knew you were spending more than a thousand dollars a year on coffee you buy every day between classes, would that make you think twice?

• Or another thousand on fast food lunches rather than taking a couple minutes in the morning to make your lunch?

When people actually start paying attention to where their money goes, most are shocked to see how the totals grow. If you can save a few thousand dollars a year by cutting back on just the little things, how far would that go to making you feel much better about your finances?

Following are some general principles for learning to spend less. The “Tips for Spending Less” then lists specific ways you can try to follow these principles in your daily life. Remember, spending money doesn’t define who you are!

• Be aware of what you’re spending. Carry a small notebook and write down everything—everything—you spend for a month. You’ll see your habits and be able to make a better budget to take control.

• Look for alternatives. If you buy a lot of bottled water, for example, you may feel healthier than people who drink soft drinks or coffee, but you may be spending hundreds of dollars a year on something that is virtually free! Carry your own refillable water bottle and save the money.

• Plan ahead to avoid impulse spending. If you have a healthy snack in your backpack, it’s much easier to not put a dollar in a vending machine when you’re hungry on the way to class. Make a list before going grocery shopping and stick to it. Shopping without a list usually results in buying all sorts of unneeded (and expensive) things that catch your eye in the store.

• Be smart. Shop around, compare prices, and buy in bulk. Stopping to think a minute before spending is often all it takes.

What are tips for spending less?

1. Make your own lunches and snacks.

2. Read newspapers and magazines online or in the library.

3. Cancel cable television and watch programs online for free.

4. Use free campus and local Wi-Fi spots and cancel your home high-speed Internet connection.

5. Buy generic products instead of name brands.

6. Shop at thrift stores and yard sales.

7. Pay with cash instead of a credit card.

8. Cancel your health club membership and use a free gym facility on campus.

9. Compare prices online.

10. Avoid ATM fees by finding a machine on your card’s network (or change banks); avoid checking account monthly fees by finding a bank with free checking.

11. Get cash from an ATM in small amounts so you never feel “rich.”

12. With larger purchases, postpone buying for a couple days (you may find you don’t “need” it after all).

13. Look for free fun instead of movies and concerts—most colleges have frequent free events.

14. If you pay your own utility bills, make it a habit to conserve: don’t leave lights burning or your computer on all night.

15. Use good study skills to avoid failing a class—paying to retake a course is one of the quickest ways to get in financial trouble!

What are options to finance my college education?

Below are the common forms of financial aid you can access to finance your college education.

• Grants - unlike loans, grants do not need to be paid back as long as students continue to meet financial aid eligibility. Grants are awarded on a need-based system. Meaning, the initial award will be based on the household income and other family information entered into the FAFSA application.

• Workstudy - is one option many student find helpful while attending college. This option provides students with the opportunity to get a part-time job on campus (or in some cases off-campus). These students can work to make money to pay for their educational expenses, with employers who understand the needs of a student.

• Scholarships - are often considered "merit based" scholarships and typically require that you meet certain minimum qualifications to be eligible for scholarships. Scholarships do NOT need to be paid back as long as student meet or maintain the eligibility criteria, so all student are encouraged to search and apply for scholarships.

• Student Loans - this is a type of financial aid that must be paid back! While not ideal, many students end up needing to take out loans to cover the costs of college tuition, books, supplies and basic needs. If this is a route you plan on taking, it's important to know what the stipulations are when paying them back. *Note: NOT all federal student loans are the same. There are subsidized loans that the government "subsidizes"/pays the interest while you're in school at least part time or in periods of deferrment. There are also unsubsidized loans that start accruing interest as you soon as you receive the loan. You pay the interest while you're in school.

What are resources at Aims to help?