Friday, November 27, 2015

Chapter 13: managing your money

  • budget: spending plan that tracks all sources of income & expenses during a set pd. of time
  • creating a budget:
  1. gather basic info: learn more about income & spending behaviors, how much $ is coming in & when? write it all down, track spending for a couple of weeks, record every bill & purchase
  2. build a plan: make columns of income, expected cost, & actual cost
  3. do a test run: use budget plan to see how things go
  4. make adjustments: improve budget, reallocate funds
  • fixed expense: will cost you the same amount every time you pay it
  • variable expense: one that may change
  • recognize difference btwn needs & wants: need= something you must have, wants= goods, services, experiences. NEEDS BEFORE WANTS.
  • live w others & share costs
  • consider pros & cons of living closer to campus, to save gas, time, etc.
  • use lost-cost transportation
  • seek out discount entertainment options- student discounts
  • embrace secondhand goods
  • avoid unnecessary fees
  • types of financial aid:
-need based scholarships: based on talent (past accomplishments, sports, arts, potential, etc.) & financial need, don't have to be repaid
-merit scholarships: based on talent but not necessarily financial need, don't have to be repaid
-grants: based on financial need, don't have to be repaid, students meed academic qualifications for grants by being admitted to college & maintaining acceptable grades
-work study: for students w financial need, job at the school
-student loans: best option is subsidized federal student loan
  • subsidized federal student loans: backed by gov., interest paid on your behalf
  • unsubsidized federal student loans: require you to make interest payments while you're enrolled
  • ^if not, interest is added to amount you owe (capitalization)
  • parent loan for undergraduate students (PLUS) loans: applied for & owed by parents, disbursed directly to students, higher interest
  • private student loans: stricter credit requirements, higher interest than federal loans, interest payments begin immediately
  • to qualify for aid, fill out FAFSA (free application for federal student aid) 
  • to avoid losing funding, meet grade requirements, complete courses, & finish degree on time
  • file for financial aid every year
  • meet filing deadlines
  • credit score: numerical representation of your fiscal responsibility derived from credit report w info about accounts in your name
  • w a credit card, don't just make minimum payment bc the remaining balance will be charged interest
  • don't use credit card to fund a lifestyle you can't afford
  • debit cards are good form of constraint on your spending 

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