Money Tips

Money, like your daily time, is a resource to manage. Financial planning involves:

• Setting goals.
• Developing a strategy to reach these goals.
• Living within your means.
• Planning.
• Taking charge of your financial responsibilities.

Follow these tips:

1. Spend less than you make.
2. Create a budget. Create a long-range budget for a year or more, one for the school term, and a short-term budget for each month.
3. Keep paperwork. Keep receipts, bills, cancelled checks, and credit card statements in a jar or box in case you want to exchange your purchase and to help you put together an accurate bugdet.
4. Keep a tax file. File all of your receipts. Be realistic and monitor your budget each month. Refine it, and then stick to it.
5. Beware of credit card debt. Credit cards are convenient and a way to establish a good credit rating. If you have one use it only for emergencies or special items like airline tickets. Pay off the balance on a credit card immediately. Interest charges are expensive. You will be tempted to buy more with credit, and it is difficult to monitor how much you spend. Make certain you have the money to pay for the items that you charge.
6. Resist wasteful habits. Little indulgences add up fast. Here are some ways you may save some money:
   
   
   • Brew your own coffee and pack a snack instead of buying a latte and a roll every morning. You'll save about $25 a week.
   • Buy a water filter and fill a water jar instead of buying bottled water.
   • Pack your lunch and save another $25 a week.
   • Don't smoke, and save thousands of dollars a year.
     
     
7. Use the power of compound interest. For example: If you start your career at 22 and are able to save around $400 a month in a Roth IRA, in diversified mutual funds, and in intermediate-term bond funds, you would have a nice nest egg by the time you're 52. Assuming 11% return for stock assets and 6% on the bond fund, in 30 years you would have $643,049.
8. Shop wisely. Have a list of items you need when you go into a store and don't buy on impulse.
9. Pay cash. Don't use a credit card. Follow this simple rule: If you don't have the money, don't buy it. Keep your money in the bank and don't carry too much with you or have too much in your apartment. You will be less tempted to spend it if it isn't so available.
10. Use critical thinking when considering an expensive purchase. Think through expensive purchases such as a stereo, or a computer. For example: Don't buy a car if you can avoid it. A car is a very expensive purchase, and the purchase price is only the initial cost. Make certain you have also considered the cost of insurance, tires, upkeep, gasoline, oil changes, repairs, and parking. The stress of trying to find a parking place on campus can add to all the other pressures of school. Instead, use public transportation whenever possible or walk or use a bike/car pool if possible.
11. Exchange room and board for work. Some students exchange room or board for lawn care, child care, housecleaning, and so on. Since rent is an expensive item in your budget, an exchange arrangement can save you thousands of dollars over a few years. Ask around and put an ad in the paper, in a community organization newsletter, or on a community bulletin board. Look also for opportunities to housesit or care for a larger home.
12. Stay healthy. It costs a lot in time, energy, missed classes, and medical bills when you're sick. You can avoid many illnesses by respecting your body and using common sense. Exercise an hour a day and avoid unhealthy snacks and poor eating habits. Fresh fruit, vegetables, beans, brown rice and whole grains are healthy and cost less than processed and convenience foods. Get plenty of exercise and rest, and do not use harmful substances.
13. Conserve energy. Save money on utilities by turning down the heat, turning off lights, taking quick showers, and turning the water off while you brush your teeth. Hang wet laundry to dry outside if possible.
14. Get a job. Working while you go to school can help earn extra money. Just make sure you are not working long hours to pay for fancy clothes or a car while neglecting your education. Check with the career center or placement office for a listing of on- and off-campus jobs.
15. Get help if you're in financial trouble. Check your yellow pages or call the Chamber of Commerce and ask if your community has a consumer credit agency that helps with credit counseling. Go prepared with all your budget information, assets, bills, resources, loans, and so forth.
16. Don't gamble. You have a better chance of being struck by lightning than winning the lottery. If you spend $200 a year on the state lottery from age 18 to 67, you will have $115,000 less to spend at retirement.

You can find more practical information about managing your money at studentadvantage.com.

If you have credit problems, you may want to consult a credit counseling agency, whicn you can find through the National Foundation for Credit Counseling, a network of 1,450 nonprofit Neighborhood Financial Care Centers.

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