An overview of savings accounts
Throughout your life, you’re told over and over again to save as much money as possible. When you’re younger, $100 may seem like you own the world but now $100 probably feels like you don’t have that much money. Growing a savings account during college is necessary to cover personal expenses, emergencies if they arise, and things like going out with friends or travel costs. According to a survey done by GOBankingRates with 5,000 adult respondents, about 58% of Americans have less than $1,000 in a savings account and 32% with no savings at all. These are quite alarming numbers to see because if something comes up that is a significant sum, such as paying for new brakes and car tires, these people will have no choice but to wait until their next couple paychecks or likely be forced to rack up credit card debt.

Emergency fund and tracking expenses
One way to negate this problem of increasing credit card debt where interest rates can be upwards of 20% per year is beginning to save for an emergency fund. An emergency fund is when an individual, or family, will save enough to cover three to six months of personal expenses. This number would include things like rent, utilities, food, household items, travel costs, and miscellaneous expenses. Things like those new shoes or concert ticket that has been on your mind for a while is not an emergency and the emergency fund is not meant for these type of expenses. If you’re reading this, you’re probably wondering how you will save $1,000 as a college student. This number can be attained by tracking your own expense categories over a period of time such as a month to three months. After you’ve tracked where your money is going to each month, finding ways to mitigate costs per category gets a lot easier. Cutting out a $10-20 meal going out to eat each week can save you over $200 in just a few months. Buying a $5 drink from Starbucks a couple of times a week can add up very quickly and you may be spending over $60 a month at just Starbucks alone. Unnecessary clothing costs like buying new shoes or a new jacket can easily add up to a hundred bucks in one sitting.

How can you save
Students can set up a high-yield liquid savings account such as a money market account or Certificate of Deposit (CD) that has a maturity of a year or less. These types of accounts depending on where they’re set up can earn around 1.5-2% yield versus 0.1-0.5% yield in a regular savings account. Although this number may not sound like a lot, it is compounding interest and the balance will build up over time and you will earn interest on the interest that has been previously accrued. Setting aside $25 a week into a savings account will grow to $300 in just three months. Another option students can consider is going to an ATM when you receive a paycheck and only spending the cash you take out for that month and saving the remaining balance. Once saving becomes a weekly or monthly habit, it only becomes easier to do and you will likely notice unnecessary spending go down even more.

Written by : Brad Kmiec, Student Peer Mentor

What is a credit score?
Your credit score is a number that summarizes your credit report and how well you repay your debt. Banks/credit lenders are the primary reason for credit scores because it is a quicker way to see if someone will be responsible on paying back their debts. Credit scores can vary from bureau to bureau depending on who the lender reports to or who they report to first.

FICO
FICO is a type of credit score that 90% of lenders use. The FICO number is still calculated using information from credit reports. Like the credit score, it still shows lenders how likely a borrower is to repay their debts and how much of a risk a borrower might be. More information can be found here https://www.myfico.com/credit-education/credit-scores

Credit reports are different from credit scores. Credit reports show the payment history, how long the borrower has had each line of credit, the types of credit, credit limits, how much of the credit limits the borrower uses, how much total debt a borrower is in, and hard inquiries on the borrowers credit report. The score is just a summary of all of those things. It is more important to check the credit reports to make sure information is reported correctly. The three credit reporting bureaus are: Experian, Equifax, and TransUnion. A borrower can check their credit report once a year for each of these bureaus without a hard inquiry. It is best to check one of these once a quarter.
Find credit reports on annualcreditreport.com

How do I build credit?
A good way to start building credit is through a credit card. Borrowers can only build good credit if they are using it responsibly. Credit cards can build credit if full payments are made on time each month. It will show the three bureaus that the borrower is responsible with their debt obligations.

Putting regular expenses on a credit card is a good first step to building credit. This will ensure the borrower isn’t using the credit card just because they have it. For example, you can choose to put utility bills or groceries/gas purchases on the card. The next step in building credit is to keep the balance low. Unlike a debit card, the balance in the bank won’t change when purchases are made. Only when the balance is paid, does the bank balance change to reflect those purchases. It is easy to get carried away with purchasing when there is not an instant bank account balance change.
Finally, the longer the same line of credit is in use, the more responsible a borrower looks to lenders. It is better to have one credit card open for a longer period of time rather than having multiple cards for shorter periods of time. Length of credit is 15% of the FICO score so it's a good idea to not open and close lines of credit regularly.

Another good way to build credit is through student loans. Student loans are repaid post-graduation so the borrower's credit won’t improve until several months after full, on time payments are made. Meaning, the student loans aren't necessarily building your credit while you're in school. Generally, most loan repayment plans are over a 10 year period, while some are longer depending on the borrowers’ income and other debts. It's a good idea to never miss your student loan payments because that is mostly what the credit bureaus are tracking.

Other Credit Card Tips 

Tip : Look for low APR (Annual Percentage Rate) and low annual fees when comparing credit cards. Nerd Wallet is a great (free!) online tool you can use to compare credit cards based on your needs. 

Tip: If you're going to put a large purchase on a credit card, have a plan in place to pay it off quickly.

Tip: Always pay the card off in full at the end of the month! 

Tip: Leave the card at home if you'll be tempting to use it during shopping trips to keep overspending at bay.

Written by: Lillie Perry, Peer Mentor

New decade, new you? The Spring 2020 semester is about to begin and we wanted to share a few pointers regarding managing those financial aid refunds. First things first –check your Ubill! Aid most likely has applied to your bill and refunds will be appearing in your direct deposit accounts shortly.

What’s a refund? A refund is created if the financial aid applied is greater than the university bill. All financial aid, with the exception of work-study, is applied to your U-Bill first. Once the bill is paid in full, any left-over financial aid is typically refunded back to you, the student. You’ll want to make sure you establish the bank account to receive this money through your AccessPlus account. Once logged into AccessPlus, under the "Student" tab, select "Direct Deposit". There you’ll enter the bank account number and routing number where you would like the refund or credit balance deposited.

However, not all students receive a refund. If you are living on campus, you may receive a small refund for books or supplies but your housing, food, tuition and fees will be included on your Ubill. If you are living off campus, you may receive a larger refund that is intended to cover books, housing, food and utilities throughout the semester after your tuition and fees are paid. It’s important to remember that financial aid is disbursed on a semesterly basis so the refund you received in August is intended to last until January. The refund you receive in January is intended to last you until May. This is probably one of the biggest challenges students face from a money management standpoint!

If you receive a large financial aid refund at the beginning of the term, it may be tempting to spend it all very quickly, so budgeting is crucial!
Below are some tips to help ensure you manage that refund effectively:

1. If you do not need all of your refund, you can contact the Office of Student Financial Aid to return all or a portion of your aid, especially if your aid is consisted mainly of loans.

2. Create a budget to help your refund last. Only plan for your refund to cover the necessities, like books, rent, utilities and food. If you need money for something other than those items, try to find an alternative route such as using money from your part time job instead.

3. Divide your semester refund by 5 to determine how much you’ll have for a monthly budget. This will be important when determining your monthly bills such as rent, utilities and food. Don't know where to start? Check out this link to find budgeting basics.

4. Place your refund in a separate bank account other than the one you use for every day spending. That ensures you may be less likely to spend the money with the swipe of your debit card.

5. Keep in mind your cost of attendance. If you’ve been awarded the maximum in financial aid for one school year, in most cases, we will be unable to increase your financial aid if you run out of money towards the end of the semester (even if it’s a loan!)

Wishing all students a great semester in 2020 and starting the New Year off on the right [financial] foot!

Yes, Thanksgiving hasn’t even passed, but with the holidays fast approaching, many are gearing up for their holiday shopping. Hello, Black Friday deals! Between decorations, gifts, and other expenses, the holidays can take a toll on your finances if you don’t plan carefully. Overspending may leave you feeling like a Grinch long after December 25th! Avoid debt troubles this holiday season by keeping these smart budgeting tips in mind.

1. Monitor your budget and keep the personal spending low. Your holiday budget should be determined by how much money you have left over after paying all of your other monthly priorities, like rent, bills, and savings. Review your budget to determine exactly how much you will be able to spend on each person on your list. It is tempting to buy something for yourself too while holiday shopping but try to resist the urge! You can always add it to your own wish list.

2. Sell stuff! If your holiday budget is lacking, consider selling the things you don’t need! It’s easy to forget saving for the holidays in advance, along with the other commitments we have throughout the year. Here’s a little holiday spending tip: set aside money throughout the year so your budget won’t feel the heat! Selling some of your belongings is a great way find extra cash last minute for your gift fund. Take advantage of this opportunity to do a little de-cluttering.

3. Draft a budget for each person on your list. As listed above, the first step is to always analyze your cash flow, set spending limits and see how much you can afford to spend this holiday. This will help create your spending plan for each person. We love setting price limits on gifts. It’s a great way to keep the monetary value consistent, and prevents the feeling of being “out gifted” during gift exchanges.

4. Comparison shop online. With Cyber Monday approaching, don’t forget to price check before you commit to buying. You may find that certain household appliances and other goods are usually listed much cheaper on Amazon or other sites. However, be careful not to blow your budget by paying for shipping. Look for the deals that offer free shipping before racking up extra costs in that shopping cart! Also check your inbox for coupons and deals that are coming up because who wants to pay full price for anything? Not us!

5. If you can't afford it, don’t use credit cards. Yes, the meaning behind this post is how to not go into debt during the holiday season, right? Well let’s get right to the point. Buying gifts on credit will end up costing you more in the long run if you don't pay them off in full right away. It’s all because of a sneaky little thing called interest. Add in months of finance charges and you’ll ultimately pay more for your gifts than you would if you used cash or your debit card. Credit cards have a tendency to feel “limitless” and those without self-control may find it easy to overspend. If this sounds like you, refer to all of the above points! Implementing a savings plan into your budget ahead of time for your holiday gifts can make all the difference. If you do use your credit card during the holidays, be sure to have a plan in place to pay off the balance in a timely manner.

6. DIY while there’s still time. Some of the most meaningful gifts are homemade gifts. They’re not expensive, but certainly can take time. If you have a crafty talent or hobby, such as knitting or scrapbooking, you could create gifts for a least a few of the people on your list. These gifts are more likely to show how much you care and are more personable! Foster your inner Pinterest spirit :)

Do you need help with your holiday budget? Schedule your appointment with us today through ISUappointments or give us a call at 515-294-0677.

Talking about money is important. Like talking about dating, work, family, or the search for an apartment —it's a good way to relate to friends, feel understood, have fun, and get feedback from people who are in the same boat as you. Money is an often taboo subject that gets ignored for fear of offending, judging, or falling too far outside of the bell curve.

And our reluctance to talk about money — combined with our insecurity about our own knowledge in the subject — is undeniably doing no good. Personal finance is a vital, empowering part of everyone's life, and often it’s the only topic that doesn’t get covered at the Seasons dining table, and doesn’t make it to the top of the priority list at home. So let's taco bout it!

DO ask questions if you don’t know something. “Do you guys have savings set aside? Cause I’m not even sure where to begin…” is a perfectly smart, healthy way to start learning.

DO be supportive of your friends’ successes. When they land a stellar, well-paying internship, or reach a saving goal, celebrate with them! Let them have their awesome financial [life] moment.

DON’T compare your financial situation to someone else's life. You can’t know what someone's full financial story is, and even if you could, it wouldn’t affect your own. Stay in your lane. You know what they say —Every minute you spend wishing you had someone else's life is a minute spent wasting yours.

DO remember that you are not obligated to keep up. If you have friends whose lifestyle or frivolous ways with money is making you feel like you need to prove yourself or impress someone, you may need to hang out with them less often... Preserve your own mental and financial health.

DON’T keep financial awkwardness bottled up. If you have a friend who consistently tacks on an extra drink to a shared bill at dinner, or proposes spring break trips you can’t afford, have a calm, open-minded talk with them. Say, “hey, I’m really trying to save and I want to be able to hang out with you but I hate having to say no to things — can we plan some more budget-friendly things for now?”

DO have suggestions for the budget-friendly things you’d like to do. 

DO bring the topic up in a productive, positive way, so that everyone can participate. Say something about the new savings strategy you've started, or the budgeting app you read about, or something you saw on LinkedIn. Take it upon yourself to get the money talk ball rolling.

DON’T judge anyone’s situation. The quickest way to stop a productive financial discussion in its tracks is by making someone feel judged for their situation or choices. (And you know you wouldn’t enjoy someone doing that to you.)

DO accept that everyone’s situation is going to be different. There is going to be a bell curve — of backgrounds, incomes, goals, parental help, lifestyles, and financial maturity. That’s normal, and you don’t have to worry about where you fall. As long as friends are open, caring, and humble, you can overcome most of these differences.

DO help one another out if you’re trying to save, or budget. If one of you is saving up for a security deposit on a new apartment, don’t invite them out to do bouji things that weekend. The more you know about one another’s lives and goals, the more you can help each other reach them.

So bring up money with your friends. Ask questions you may think are dumb, or talk about the issues you’re currently facing. Make it a topic as common and universal as dating or weekend plans. But before you do, remember the dos and don’ts of talking about money. Better yet, come see us at the Student Loan Education Office. We would love to have a chat with you about your money questions. No judging, no uncomfortable conversations. Find us on ISUappointments!

Bros in the homes
Having roommates is a great way to save money, especially when you're splitting the cost of rent and utilities between all your bros. Sharing a house or apartment has it's perks -it may be cheaper than the dorms, and you get to live with your best friends!

Better bro-ritos
Going out to eat can cost a fortune, at least for a college student who is already broke. $10/ meal!? No thanks. Take some time to crack a few eggs, brown some meat, and cut vegetables. Learning to cook and cooking at home can save you a ton of money. Not only will you save money, but knowing how to cook could help you impress that special someone.

Load up on classes with the bros
Here at Iowa State, once you go over full time (12 credits) any additional credits are FREE (minus any course fees that might be associated with the class)! So load up on classes with a few buddies, and maybe even get out a year or semester early and save thousands in tuition.

Borrow bros books
Books are stupid expensive, and you will probably never use them after you finish the class you bought it for, so why buy and sell back for less? Rent your books for a much lower price, or if you want to own it, buy it used and save lots of money! While on this topic, ask around with people who have taken the class and see if you will actually need the book to pass the class and do well in it.

Get yoked with the bros
Stay healthy to avoid health center fees, eat right and work out. Your admission to the gyms on campus is already paid for in your Activity and Service fee so why not make the most of it? Try to fight off some illnesses by getting enough sleep, getting exercise and washing your hands during cold and flu season. Depending on your insurance, some heath center costs could be charged to your Ubill. 

Bro-ber shop now open for business
Haircuts can add up quickly, especially if you are one of those people who like to keep your hair looking fresh. With a haircut costing around $20, you can take that money and buy a pair for clippers, and then use the power of the internet to learn how to cut hair! You and your buddies can keep each other’s hair in check while allowing your wallets to grow!

Bills before bros?
College can be a great time! However, don’t think college is just a time to take it easy and darty on the weekends. A great way to set your future self up better is to work while in school. Getting that paycheck can help pay for groceries or cover part of rent, so that you don’t have to take out as much in loans. If you do that you'll have an easier time repaying them after you graduate (Yes, you have to repay your student loans! With interest...)

The mystery of the missing Benjamins
Ever thought you had money and then it turns out that your two-year old nephew has more money than you? Well no need to fear, with a budget that won’t be a problem. Making sure you know how you are spending your money can allow it to work better for you and cut down on unnecessary spending. To top it off, our office offers budgeting sessions to all students for FREE! So give us a call (515)294-0677 or go to ISUappointments to set one up and start spending smart.

Just a side note -Don’t get discouraged if your first budget sucks and you missed your mark. It’ll take some work and constant change to make it work the way you want it to and to be most realistic for you! And if budgeting means more money in your bank for a full tank of gas -celebrate the small victories! 

Written by: Jacob Barber, peer mentor