Managing money is much easier said than done. There are so many confusing terms and concepts that are difficult to understand. Often, students just don't know where to start. Use the following to help get you on the right track to managing your money wisely.
The CollegeBoard offers Financial Planning Tips.
How to manage finances
Initiate a budget
- Create a budget.
- Gather paystubs and monthly bills.
- Determine your income and the amount that needs to be paid out each month.
- Sticking to a budget is tough.
- It gets better with time and practice.
- Stay motivated by making and meeting simple goals (cook a meal at home instead of eating out).
Determine and list expenses
- Rent/Mortgage, utilities
- Car payment, car insurance, gasoline
- Health insurance
Determine your priorities
- Monthly mobile/cell telephone bill
- Daily cup of coffee
Ways to increase income or trim expenses
- Get a roommate
- Get a part-time job
- Set your thermostat lower
- Do a Home Energy Check through Progress Energy
- Buy a used car instead of a new car
- Make sure tires are inflated properly
- Get regularly scheduled maintenance on your car
- Eat at home instead of a restaurant
- Make your own lunches
- Clear out a storage unit and have a yard sale
- Eliminate or lower cable or cell phone packages
- Cancel unused memberships
- Rent books/movies/video games from the library
- Use a shopping list and coupons. Buy in bulk
- Avoid impulse purchases
Saving money tips
- Put a percentage of your paycheck directly into a savings account
- Have retirement contributions withheld from your paycheck
- Plan for major purchases before it becomes an emergency
- Plan for emergencies – they will always happen
- Keep good financial records
- Live like a student now, so you don't have to live like a student when you graduate
- Pay cash – it hurts when it leaves your pocket!
Tips on borrowing money
- Borrow only if you need to
- Borrow only the amount you absolutely need
- Compare rates and fees
- Know the repayment terms – will you be charged for early repayment?
- Know what will happen if you are having trouble with repayment
- Know what will happen if you do not repay
Difference between credit cards and debit
Credit is the ability to buy an item or service with a promise to pay at a later date. Debit is using current funds to buy that item or service.
Know what to watch out for:
- Credit limit – maximum
- Available Credit Available – remaining credit
- Interest rate – Increases after a certain period of time
- APR – annual percentage rate
- Fees – annual fees, transfer fees, finances charges, late/over limit fees
- Minimum payment
- Payment due date
The CollegeBoard offers tips on Credit Card SMARTS.
Know your credit report
A report compiled by one of three major credit agencies, Experian, Equifax, or Trans Union, also known as credit bureaus. Your credit report will list organizations with which you have borrowed money or have financial interests.
- The bank where you have a checking or savings account
- The lender for your home or car loan
- The bank that issued your credit card
- Any organization you owe money to
The report for each of the three credit agencies could vary depending on which agency your creditor reports to.
The CollegeBoard offers tips for Keeping on Top of Your Credit Report.
Credit Score and you
Credit agencies look at the activity on your account and assess the amount of credit you have available to use, the amount of credit you have used so far, and how well you repay your debts. This results in a credit score.
The credit score ranges from 300 to 850. The higher your credit score, the less of a risk the borrower is to the lender and results in more favorable amounts and interest rates.
Improving a credit score over time:
- Pay your bills on time
- Reduce your credit card balances
- Do not apply for all credit cards you are offered
- Report any incorrect information to all three credit agencies
Money management information
For additional information regarding HCC policies, financial aid topics, health and safety, and student outcomes, please visit Consumer Information.