Llégate

MONEY MANAGEMENT

“Money Matters

Things to think about…

• Education costs time and money

• The cost of education is increasing over time

• Consider your spending habits

• Different methods of financing your education have different total costs

Less time, less money

• Ask yourself…– How long will it take to complete my

degree?

Four (4) Year Plan120 Units to obtain a degree

120 ÷ 4 yrs = 30 units/yr.

30 units ÷ 2 terms = 15 units/term

Semester Plan, 12 UnitsBased on 2 semesters per academic year

120 ÷ 12 units = 10 terms or 5 yrs

$1531X 8

$12,248

$1531

X 10

$15,310

Paying for Education

• Determine education costs

• Apply for financial aid

• Build a budget

• Loan use

• Avoid credit cards

Cal State San Marcos Fees:

• 6.0 units or less, $1,003.00

• 6.1 units or more, $1,531.00

These are fees for California residents. Non-residents pay an additional $339.00/unit

Apply for Financial Aid

• Complete 2005-2006 FAFSA at www.fafsa.ed.gov– Scholarships– Grants– Employment Opportunities– Loans

Students using Financial Aid

• Apply for Direct Deposit– You will avoid long check pick-up lines in

University Cashiers– You will have quick & safe access to your

money

• What’s required?– Checking/savings account number– Bank routing number

APPLICATION ONLINE

WWW.CSUSM.EDU/SFS

Paying for Education

• Build a budget– Income vs. Expense– Track your expenses for 1 month– Write down all expenses– Include average for expenses that do

not happen monthly

– KEEP IT REAL!

Paying for Education

• Estimated Cost of Attendance (Annual)

Living with Parents

Living Away from Home

Fees (full time resident) $3,062.00 $3,062.00Bks & Suppl. $1,260.00 $1,260.00Food & Housing $3,240.00 $8,616.00Transportation $990.00 $990.00Misc./Personal $2,304.00 $2,304.00TOTAL $10,856.00 $16,232.00

SAMPLE BUDGET

Leftover=savings

Paying for Education

• Determine whether you need a loan– Who can contribute to your

education?• Financial Aid• Family• Employment• Savings• Loans???

Paying for Education

• Do you really need a loan?– TuitionPay Installment Plan

• For Non-financial aid recipients• 4-5 Monthly Payments• Interest Free• One time enrollment fee cost per

semester or annual plan

www.tuitionpayenroll.com

(800) 635-0120

Paying for Education

• Do you really need a loan?– Emergency Loans for financial aid

recipients• Works like an advance until your Financial

Aid is disbursed• Borrow up to $500, interest free• $2 Processing fee

www.csusm.edu/sfs

(760) 750-4492

Loan Use

ACADEMIC LEVELACADEMIC LEVEL

INDEPENDENT STUDENT LOAN

LIMITS

SUB & UNSUB

DEPENDENT STUDENT LOAN

LIMITS

UNSUB

First Year Undergraduate

$2,625.00 $4,000.00

Second Year Undergraduate

$3,500.00 $4,000.00

Third Year & Beyond Undergraduate

$5,500.00 $5,000.00

AGGREGATE LOAN LIMIT

SUB & UNSUB$23,000.00 $46,000.00

Loan Use

• Parent Loan for Undergraduate Students:– Unsubsidized– Dependent students ONLY– Credit check is required– Limits

• College cost – Fin. Aid = PLUS Loan• FAFSA is required

WHY NOT CREDIT CARDS?

Why not credit cards?

• High interest rates• Annual fees• Late fees• Over-credit limit fees• Penalty rates• Lost card replacement fees• Currency conversion fees• Low credit scores

GAO Report to CongressTable 1: Minimum Repayment Schedule on a $2,000Credit Card Loan at 19 PercentMonthly minimumpayment amount

Number of monthsto repay

Total interestpayment

$40 100 $1,994

$50 64 $1,193

$75 35 $619

$100 25 $424

Source: Credit Card Minimum Payment Interest Calculator, Daniel C. Peterson,www.webwinder.com

Interest savings between lowest/highest payment = $1,570; time saved = 75 months or 6.25 years!

Why not Credit Cards?

Bal.14% 16% 18% 20%

PAY-OUT

YRSPAY-OUT

YRSPAY-OUT

YRSPAY-OUT

YRS.

$500 $754 6.3 $829 6.9 $931 7.8 $1,084 9.1

$1,000 $1,954 13.3 $2,329 15.6 $2,931 19.3 $4,083 26.3

$1,500 $3,154 17.3 $3,829 20.7 $4,931 26.1 $7,084 36.5

Why not Credit Cards?

• If you absolutely have to:– Limit the number of cards you have– Keep only for emergencies– Needs vs. wants– Use LOW interest rates– Always pay more than minimum

Why not Credit Cards?

• College student statistics– 83% of students have 1+ Credit Cards– $3,000+ average credit card/s balance– 11% make minimum payment– 17% feel debt burden– SECOND Highest Rate of Bankruptcy

Filing.• Young Americans Age 25-34

Think Wise

• Apply for financial aid

• Plan ahead, make a budget

• Evaluate needs vs. wants

• Borrow only when absolutely necessary

• Use loans before credit cards

Student Loans vs. Credit Cards

• No credit check required

• Interest paid = tax deductible

• Zero due if attending school at least ½ time

• Subsidized loans = 0 interest– No interest accrued while attending

school

• Unsubsidized loans = low interest

Student Loans vs. Credit Cards

• Credit Cards– High interest rates– Annual fees– Credit check = lower credit scores– Late payment fees– Consequences

Cutting Expenses

• Changes that WON’T cramp your lifestyle:– Use a grocery list– Don’t shop when hungry– Clip coupons and buy bulk foods– Combine errands– Bring lunch to work/school a few times a

week– Leave credit cards at home

Estimated monthly savings: $75.00

Cutting Expenses

• Changes that might cramp your lifestyle:– Shop at thrift stores– Use public transportation– Eat out once a week– Cancel cable/cell service– Rent videos vs. going to the movies

Estimated monthly savings: $250.00

Cutting Expenses

• Changes that will cramp your lifestyle:– Eat out once per month– Use public transportation often– Cancel cable TV, cell, Internet– Visit the library vs. bookstore– Share living costs with roommate or two– Read books on ways to be thrifty

Estimated monthly savings: $500.00

Savings Plan

• Today’s habits pay off tomorrow– Include savings in your budget– Save for major purchases– Save for emergencies– Pay down student loans– Save for retirement

How to Succeed- Recap

• Identify financial goals

• Track your expenses/list your debts

• Create a financial plan/budget

• Save in ways that fit your lifestyle

• Start a savings plan- STICK TO IT

• Pay off debt

• Spend less!

Resources

• Financial Planning– www.edwise.org– www.studentdebthelp.org

• Credit Report Agencies– Equifax (800) 685-1111– Experian (888) 397-3742– Trans Union (800) 888-4213

QUESTIONS?