Money Saving Tips for College Students

Consider the following tips to help you save money throughout your college years.

Campus Activities:  Campus activities like movie nights or math club usually mean free food.  Take advantage of these opportunities to be involved.  You may just make a new friend or two as well.

Buying Smart:  Consider buying store brand items instead of name brand and think about buying in bulk at stores like BJ’s, Costco, and Sam’s Club.  Also, look for some second hand stores and don’t feel awkward shopping there, you are not alone!  You may be shocked by what they have and how much things cost.  For example – one of our students last year found a Coach purse for $40!

Get a Job:  You may have been given the opportunity for work-study but even if you weren’t, you can still look for a part-time job on campus or close to campus.  Working while in college is highly recommended.  Not only is it a great resume builder and networking opportunity, but you can meet friends and make some money so you won’t be hassling mom or dad.  Some on-campus and work-study jobs may even let you do your homework or get studying done when you have down time.

Bank Accounts: There are a lot of different accounts out there and many banks have student checking accounts where there aren’t any fees or charges to keep a minimum balance.  We suggest that you find a bank that has a local branch for both you and your parents.  Your parents and you should each have a debit card and access to on-line management.  Setting up joint accounts with your parent(s) as the primary account holder will help them easily deposit money as necessary.  Link your checking and savings accounts to help with overdraft protection and to help you save money. Have your paychecks and all other funds directly-deposited into your savings, then transfer spending money to your checking account and try to spend only what you have in checking. This will help you save money now to fund future large purchases such as books, a computer, or maybe even a trip for Spring Break.

Credit Cards:  Be aware of credit card hooks such as free prizes, a percent off today’s purchase for opening an account, no interest for a certain number of months, etc.  A free T-shirt may sound great now, but not so much when compared to the amount of potential credit card debt you may incur and a mark on your credit report.  You can also look into Credit Unions or AAA, but if you do decide to have a credit card, we suggest having only one if possible.  Be sure to minimize your credit card debt even after graduation; don’t forget about your student loans you will have to pay off.  Also, typically if you are under 21, you will need to show that you are able to make payments (meaning you have some sort of income) or you will need a cosigner in order to open a credit card account.  If you are under age 21 and have a card with a cosigner but want an increase in the credit limit, your cosigner must agree in writing to the increase.

Being money conscious from the start can seriously help you throughout college and you’ll be very thankful once you graduate.

Any additional tips to share?  Leave your comments!

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

About the author: Laura Guarino is the Student Services Coordinator with College Planning Strategies, LLC. Laura has a degree in Human Development from Boston College and is currently pursuing a Master’s degree in School Guidance Counseling.  She is also enrolled in a certificate program in College Admissions Counseling.  Laura is at the forefront of the college admissions process for the families of CPS and The Smart Track™ Toolkit.

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A Beginner’s Guide to Financial Aid Part II

In the last blog entry, we covered some of the basics of the college financial aid system and how it is used to determine how much money you could receive. In case you have forgotten, the key formula is “COA – EFC = NEED”. COA in this case stands for “Cost Of Attendance” and is pretty straightforward (just add up the cost of everything for one year of college). What I would like to focus on in this entry is the EFC, which stands for “Expected Family Contribution”.

The first thing to do is clearly define what your EFC is. Most colleges and universities will define your EFC as “the minimum amount your family can afford to pay for one student for one year of college”. It is important to identify key components of this definition. “Minimum” implies that your EFC is a starting point and you may actually have to pay more than your EFC (depending on the college your student chooses.) Also notice the “one year of college” part. This is because you should file for financial aid every single year, which means that your EFC will likely be different every single year. The reason financial aid is filed for every year is because situations change. Jobs are gained or lost, benefits will start or stop. Even the number of students in your family attending college at the same time could change, and all of these things impact your EFC.

Now in terms of actually calculating your EFC, college and universities will use one or two methodologies (read: formulas.) The first is the Federal Methodology (FM). This is derived with a formula the Federal Government came up with and is calculated when you submit the FAFSA. Every college in the country that awards federal financial aid requires the submission of a FAFSA, which means that all of these colleges will see your FM EFC. Some colleges will go a step further and they will use their own formula to calculate your EFC. This is known as using an Institutional Methodology (IM). This can get complicated because different institutions can use different IM formulas. However the basic IM formula was created by CollegeBoard and is calculated when you submit your CSS/Profile.

Now that you know there are two different EFCs, it’s probably best to figure out what’s included in these formulas. Simply put, the FM and IM formulas use the following: parent income, parent assets, student income, and student assets. There is a handful of other information that could be used (ages of parents, ages of younger siblings, certain monthly expenses) but income/assets of parents/students are the big players.

Keep in mind that since we’re dealing with two different formulas, income/assets could be assessed differently. One example is your primary residence. Any equity in the primary home is considered an asset in the IM formula, but primary home equity is not part of the FM formula. If you happen to have more than one property though, equity in the additional properties is considered an asset in both the FM and IM formulas.

Things get more complicated when you delve into the nitty-gritty of each formula. If you’re concerned about your EFC and how you’re going to be able to afford to send your students to college, it is usually best to consult with a professional college advisor. Much like a CPA helps you with your taxes; College Advisors (the ones worth their salt) are well versed in EFC formulas and the many different avenues for paying college bills.

Once you finish your applications and the college gets your EFC, its time to create your financial aid award. In the next series entry we’ll discuss Awards and Appeals, something you may need to utilize depending on your EFC, your award, and any extenuating circumstances you think may be affecting your ability to pay for college.

About the author: Justin Munio is a Business Development Manager and Financial Aid Consultant with College Planning Strategies, LLC. With a degree in mathematics from SUNY Geneseo and 4 years working in the CPS Financial Aid Department, Justin is at the forefront of the financial aid process for the families of CPS and the Toolkit.

                       

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

5 Things I Wish I’d Known About MONEY When I Started College

At Grockit, we’re all about education and getting you ready to move on to the next stage in your life.  But we’re not just teachers; we’re all former and/or current students, too, and we’ve got more than just test preparation tips to share with you!

There’s a good chance that you or your parents are making a significant investment in your college education from loans or savings.  The stereotype of the “broke college student” exists for a reason: many college students really are living on a TIGHT budget.  Learn from a few of the money mistakes I made in college so you can avoid them yourself!

            1.         Credit cards are not “free money,” and they can make your life miserable if you misuse them.  They might look innocuous, all decorated with Van Gogh’s Starry Night or your school mascot or whatever, but the interest rates will kill you if you’re not careful; get one for emergencies if you must, but try to pay it off in full every month and don’t let yourself get into the habit of thinking that new boots or late-night pizza orders are “emergencies.”

            2.         There are weird little opportunities to make a little extra cash all over the place at most universities and colleges.  Have a couple of hours to spare between classes one day a week?  You might be able to spend them as a model for the art school or a mock patient for med students.  Think outside the usual part-time job box to explore seasonal opportunities or small gigs that only crop up periodically.

            3.         Unless you become a celebrity or get a really plum job involving some kind of consumer goods, you will never again get as much free stuff offered to you as you do in college.  So take the t-shirts, the boxes of sample toiletries, and the promotional water bottles; a penny saved is a penny earned, right?

            4.         Speaking of free things, if you’re smart about it you can get a whole lot of free food just by going to extracurricular activities like lectures and club meetings.  It’s an opportunity to not only score some pizza (and it will almost always be pizza), but also to learn about something, whether it’s swing dancing or quantum physics, that you might never have discovered otherwise.

            5.         There are resources available to help you through the rough patches.  It probably won’t kill you to eat nothing but ramen noodles for the last two weeks of the semester, after you’ve burned through all of your loan money, but it’s not exactly great for you, either. And more importantly, it’s probably not necessary.  Many schools have emergency short-term loan programs in place to help students out of a tight spot, so if you need help, ask for it!

What kind of helpful knowledge have you picked up about your finances?  Share it in the comments!

About Grockit: Grockit is a fun and engaging learning community that encourages students to learn from group study, game play, expert tutorials and solo study. Students that prepare with Grockit have proven to achieve higher scores on college admissions tests.

About the author: Andrea Alexander is a current graduate student in the School of Information at the University of Michigan. She's been teaching test prep for about eight years and have picked up lots of helpful knowledge along the way. She specializes in the verbal aspects of test prep, since her education and career experience as an attorney, freelance writer, and editor have given her the background for that.

5 Things I Wish I’d Known About JOBS When I Started College

At Grockit, we’re all about education and getting you ready to move on to the next stage in your life.  But we’re not just teachers; we’re all former and/or current students, too, and we’ve got more than just test preparation tips to share with you!

Part-time employment and college go together like cheese and crackers; they’re a natural complement.  And as a student, I was no stranger to part-time work-- in fact, I usually had multiple jobs at the same time, doing everything from making balloon bouquets to offering tech support in campus computer labs.  Read on to learn a few tips about employment that I picked up through trial and error!

            1.         Money matters, but you’re in school, so your studies should be your first priority.  Try to find a job that understands the unique scheduling needs of a student.  You want to work somewhere that will allow you some flexibility during exams and other busy times.  These jobs may pay a little less, but they’re worth it in the long run.

            2.         Another perk to look for in student employment is downtime.  Many jobs, particularly on campus, will have time for you to study.  Some that I found were night receptionist in my dorm, computer lab monitor, and parking garage attendant; these jobs let you double-dip by making money AND getting some of your homework out of the way, leaving more time for extracurricular fun!

            3.         Don’t forget about internships-- sometimes working for free is a great investment.  The most interesting jobs often don’t pay anything at all, but they can lead to amazing paid opportunities or to valuable additions to your professional network.

            4.         A part-time job can be a great chance to explore something outside your usual academic sphere.  If you’ve always wanted to know more about urban planning but you don’t have room for it in your course schedule, check to see if there’s an opening in the departmental library, or a professor looking for some research help.

            5.         If you can get a work-study award, it’s an enormous help in finding student employment. In the U.S., work-study programs provide government funds to pay part of your wages for eligible jobs, and that makes you a very affordable employee—take this advantage if it’s offered to you!

Have you had to learn any lessons about college jobs the hard way?  Share them in the comments!

About Grockit: Grockit is a fun and engaging learning community that encourages students to learn from group study, game play, expert tutorials and solo study. Students that prepare with Grockit have proven to achieve higher scores on college admissions tests.

About the author: Andrea Alexander is a current graduate student in the School of Information at the University of Michigan. She's been teaching test prep for about eight years and have picked up lots of helpful knowledge along the way. She specializes in the verbal aspects of test prep, since her education and career experience as an attorney, freelance writer, and editor have given her the background for that.