The Hardest Part in Being a Student
Many people think that one of the hardest thing in being a student is thinking of ways to save money. I agree with those who holds this position, however, I believe there is one thing harder than saving money, especially for student – Investing money and time today, in order to save in the future. Examples for that are going to college and university, Networking with your colleagues, creating a meaningful social life and buying insurance like health insurance or a home warranty.
It is not common to find students that calculate every step thinking about the future, and I am thankful this is situation. However, when taking some decisions in life, we must think of future consequences. If not, we will find ourselves wasting money instead of saving it.
In some cases, when taking an important decision, we automatically think about the future. However, in some cases we do not, and it will make us spend more money in time in the future. Here are some example:
The perfect example for an automatic decision most people do while thinking about the future. One of the main reasons people are going to college for, except of interest, is to learn how to manage in the future. Learning a profession is basically investing time and money now in order to earn more more of them in the future. If you haven’t decided yet what you should study in college here are some tips
Sometimes we don’t have the strength to do a efficient networking with our colleagues, but this is a good example for an important skill that will help us in the future. “Friends brings friends” is a common method of recruitment nowadays. A friend’s recommendation is perhaps the best way to find the perfect job for you. Investing time in networking and even investing some money and going to conferences that you find interesting to get to know the companies and their atmosphere can be very beneficial in the future. Linkedin is wa of the best platform that can help you with networking. If you don’t have a linkedin account, you can open. Click here.
Most student believe insurance is for grownups. Actually, when it is done at a young age, it costs less. Two common and very important insurances are health insurance and home warranty insurance. The first one is more known, but a home warranty coverage which contains a home appliances insurance can save you unexpected costs and hassle. ReviewHomeWarranties.com offers a list of the top rated home warranty insurance companies in AZ, TX, GA, NJ, and the rest of the US as well.
Friend are more important than work. Studies show that social life are crucial to get happiness. As you know, keeping a healthy social life is spending time with your family and friends. Sometimes it involves spending money as well when going out and even when inviting friends to your home. Without investing time and money in your social life, succeeding in life will be much harder.
It can be hard being a student but I believe you must have the comprehension and realise that in some decisions in our life we must think about the future to come. Studying, investing in networking and buying insurances like a health insurance or join a home warranty plan are only examples for action you can take to save you time and money in the future. Protect your future by thinking about it and planning it today.
Personal finance tips are a dime a dozen these days, especially for students. It’s almost too easy to learn about money, as it can be found no farther than a simple google search. If you are an advanced saver or someone who is diligent with their finances, the first page results may seem a bit redundant.
We all know we should budget and yes, we all know we should pay our bills on time. What’s the next level? What more is there to learn? Is there something that a student can use? See below for 5 unique tips for those who are tired of the same old advice.
Using Credit Cards to Your Advantage
There I was eating lunch with my boss, 8 years into an accounting career and I thought I had it all figured out. I was dealing with billion dollar companies, of course I had my own finances figured out. There was little debt to pay off (just a car loan) and I had my emergency and retirement funds all set up. As I normally do, I like to pick the brain of those more successful than me (and many times those who are not. I am a big believer that you can learn anything from anyone at anytime.) Somehow we got to talking about how he just got an extravagant hotel booked for almost no money. Like anyone else, I was intrigued. He told me that it was all done through credit card points. He had accumulated so many points because he was achieving them systematically. Here was his very simple system.
- Pick out a credit card that offers a reward system relevant to your desires (i.e traveling)
- Pay for as many bills as possible with this card. I’m talking everything (cable, utilities, gum, etc)
The points WILL accumulate. If you are not using credit cards to your advantage, whether it be for cash back or some free movie tickets, you are leaving money on the table. The rewards are waiting for you!
My recommendation is to look for a deal. For instance, I recently signed up for the Bank of America Travel Rewards Card. If you spend $1,000 in the next three months, you’ll get 20,000 bonus points. That right there is worth a couple hundred dollars. It was a breeze since I signed up right around the holidays, which was not an accident.
Why Fintech is for Advanced Savers
Fintech is a fun new industry sparking a lot of startup investment. All this money equals more product for us consumers. Fintech is short for, you guessed it, financial technology.
There is money to be saved in its creation. One example of saving money through fintech can be exemplified in your stock trading account. While many are content paying, let’s say $7 a trade, there are alternatives such as Robinhood. It’s an app that doesn’t charge you for making a trade.
Imagine the compound interest on the savings of these fees?
Health Savings Accounts
Health Savings Accounts are rarely mentioned but they are a valuable vehicle for savings. The It’s most valuable asset is it’s triple tax benefit and students benefit
- First, it’s deductible on your individual tax return. If deposited through a payroll deduction (your paycheck), the money will be put in pre-tax.
- The second tax benefit is that the interest and dividends earned on the principle will be tax free.
- Third, any withdrawals that are deemed “qualified medical expenses” will be free of tax.
Pre-tax or Post-tax Retirement Savings?
A common question for any financial professional is the following: “Should I make my retirement contributions pre-tax or post-tax?”
For students this question is extremely importing. Starting saving money for retirement at young age will benefit your future. Since future circumstances are hard to predict, it’s hard to give a concrete answer to that question. My advice is to do both! For instance, my employer gives me the option. I contribute 6%, 3% to a ROTH 401K and 3% to a 401K. It’s my best solution to get the best of both worlds.
Save on Money Transfers
Transferwise is one alternative that you may want to consider. As Nerdwallet reports:
“Banks and other providers generally profit off transfers by marking up the exchange rates they give consumers, but TransferWise makes a point to avoid this. It charges a small percentage of the transfer amount as its fee. Delivery can take several business days”
Technology is evolving and making it easier AND cheaper to do things financially. I’ll leave you with something a wise man once told me – never pay full price!
Bitcoin is a cryptocurrency that has also made waves in the international payment space but that is a story for another post.
One of the biggest myths pertaining to travel is that it has to be expensive. The key to traveling on a budget as a student is to know what to spend your money on and what you should be not spending your money on. If you master this, you will be able to see double the locations in your travels. Here are my tips for how to travel abroad as a low-budget student:
- The Hostel vs. the Hostal: For those going to the Spanish and Portuguese speaking world and do not necessarily want a low budget hostel, consider a hostal. Many non-Spanish speakers do not realize that a hostel and a hostal are not the same thing. A hostal in Spanish refers to a family owned bed and breakfast that is safe and economically. Additionally, these will give you more interaction with the locals. For example, in Madrid, one can get a Hostal for 25 Euros per night with a private room and bath that is one block from the Plaza Mayor. This is a hidden way to have the low-budget travel experience without having to stay in a room with six bunk beds.
- Consider the Budget Airlines: If you are going to Europe or Southeast Asia, do not be afraid to go on the budget airlines. The key to be careful is with your luggage. Ideally, only bring a backpack and then you will not have to pay to check your luggage. Also, always print a physical copy of your boarding pass in order to avoid the fee by the airline. If you use these sometimes you can get a $1 ticket from Marseille to London or a $200 flight from Kuala Lumpur to Paris. Yes, these deals do exist and with a little creativity and intelligence, you will surely find them.
- Hop-On-Hop Off Bus: These busses are in most cities that range from Europe to African cities. Where they are beneficial to a young traveler on a budget is that they eliminate transportation costs during the day that can save a great deal of money. For example, in Berlin or Cape Town, the sites are very spread out. What is best is to buy the unlimited one day or two-day pass for a set price and use the bus to get to the main sights. Usually, the bus will be positioned to hit the major points of the city and will allow you to get the lay of the land before going off on your own.
- Look For the Menu of the Day: In many European countries they have lunch specials that include an appetizer, entrée, dessert, and a soda or glass of wine. Usually, you can find these specials for 10 EUR. This allows you to eat better, try the local food, and even wine taste in the process. Thus, avoid the fast food and get out there and eat good food for an affordable price.
What is important to remember as a student is that there is a cheap way to travel that is very different from traveling with your family. If you use this to your advantage, then you will absolutely be able to see a great deal of the world at a young age and add a great deal of depth to your life experiences.
Gambling is one of the worst thing you could do for your personal finances as a whole. Nonetheless of you are a student who is struggling financially, or a parent that has to bear the heavy costs of college enrollment. In fact, it is scientifically proven that the “problem gambling” group (people who gamble excessively to a point it has a tremendous financial and mental costs) mainly consists of poor individuals, so the fact you have little money in your possession doesn’t make you any less prone to become an addict.
The above is my “don’t gamble, kids!” disclaimer. I am by no means encouraging anyone to wager their money through gambling (ESPECIALLY if its against the law where they live).
After we have established the fact that gambling can be the root of all evils, we have to withstand the fact gambling is a highly popular recreational activity, and especially for college students who are able to set foot inside a casino for the first time in their life. Although they can develop issues as a result of uncontrolled gambling, it’s no less of a risk than cigarette or drug consumption which incredibly trendy at this age.
Below are 7 tips that will help you control your gambling spending, decrease associated fees, and improve your chances of actually winning something back.
1. Use a set budget
Easier said than done, I know, but you need to have a stringent budget for gambling purposes, else even a one wild night can cost you dearly. The budget should be a number that you would make you feel comfortable to lose in one evening, if you occasionally gamble (once every few weeks or more seldom than that). If your frequency is higher than that, you should decide on a weekly or a monthly budget, but that’s far more difficult to track.
The best tip I have for you is to use cash when you go to a brick-and-mortar casino, without a debit or a credit card. This way, you won’t be exceeding your limits even if you really, really, want to.
2. Spend time playing in demo mode
If it’s boredom that drives you into gambling, and you need endlessly click to slot’s re-bet button, why won’t you play online on demo mode without risking any money? Although it turns things from gambling to gaming, some people can get to similar levels of enjoyment from this activity without putting any money at risk.
3. Online casinos offers lower stakes
Playing online casino games for real money can be quite destructive because you cannot set limits in the same way you can when going to a land-based casino. It’s also a non-social activity, unlike going out to a casino with your mates, which has higher risks of becoming addictive (or so I believe, found no evidence to that). On the other hand, online casinos offer a lot more variety. Variety of games, variety of promotions, variety of competitions, and also variety of stakes. While the average US casino had a $1-5 minimum per hand in blackjack, online casino enable lowballers to wager as little as $2c per hand.
4. Avoid credit and payment fees on deposit
If you are going to a brick and mortar casino, do not use credit card to make payments for your chips as it will incur additional costs in comparison to cash/debit. If you are going to gamble abroad, do not exchange your money in the casino, as the exchange rates will be drastically worse to a standard exchange bureau. If you are playing online, check the casino’s specific fees for usage of different payment methods, and consider using eWallets that sometimes have unique promotions of if you use them to deposit (eWallets you can use for gambling: Paypal, Neteller, iDebit, Siru and a bunchload more).
5. Utilize bonuses and loyalty club memberships
Online and landbased casinos will go above and beyond to preserve you as a customer. This is exactly why casino membership cards are so great – they accumulate bonus points that you can use in the bar, restaurant or on the felt! The same applies to online casinos. The more you play, the more of your bonus you redeem. The more you deposit, the more VIP points you accumulate. This is free money that you should use, just be sure to read the fine print and understand online casino bonuses can also be a hassle because they limit your withdrawal if you have won any money (until you have fully redeemed the bonus).
6. Focus on low-house-advantage games
If you are indifferent towards the gaming experience in a casino and just enjoy the thrill of gambling on money, why won’t you try games that you have better chances of winning at? Of course that in the long run, you will end up losing money if you play casino games*, but if you play a game like blackjack or baccarat, you are likely to consume your funds at a much more sufficient pace than with slots.
* If you specialize in games like Texas Hold’em poker you might end up even winning! This is not a casino game but rather a skill game with 10-20% lifetime winners (who made more money than spent). Same thing applies to sports-betting – if you are an expert punter using a sophisticated strategy, you might win in the long term.
7. Don’t play to win
If you want to have a night evening out (or in your dorms) playing casino games, do it for the sake of entertainment without telling yourself you can win, because you can’t. It’s not a question of luck, but rather simple statistics. With every single die roll, statistics balance out. If you are playing blackjack that has an advantage of about 0.5% against optimal strategy (assuming you do use it), that means that roughly 0.5% of the total turnover will be won by the casino. So if you bet $10 a million times, you should be about $50,000. That all there is to it, maths. You can win on a single night, or a week, or a month or even a year, but you won’t be winning in the long term.
Hope this was helpful to you young gamblers. Just note that in the USA online gambling is not only prohibited but also quite impossible. Online casinos that accept Americans aren’t the ones you want to be wagering your money in. For concluding words, I will refrain from using the banal “good luck” wish, and just advise you to gamble responsibility.
When children start university, their parents might have bought them a bar fridge, a laptop, and probably some new clothes as well. Many of these freshmen come to university armed with their very first credit card too, and although there are several risks involved with giving a young adult the responsibility of handling their own credit card, there are some advantages too. So, what are the pros and cons of student credit cards?
There are numerous benefits to taking out a credit card as a student, such as:
- Convenience in case of emergencies
- It’s a safer way to pay for things instead of carrying around cash
- More secure online shopping
- Helps to develop money-management skills
- Helps to start building a good credit history for later in life, when loans will be needed for things like cars and homes
One plus for parents, is that if they’ve co-signed on the card, they should get a statement at the end of every month too, so they will be able to monitor their child’s spending habits during the month. This will allow them an opportunity to see if their money is being spent irresponsibly, and to help offer guidance through their children’s first few years of financial independence.
Of course, with all forms of lending there is a downside as well. One of the biggest downsides of students having their own card is that the majority of young people graduate with a large student loan debt. This already heavy burden is increased significantly when there is also money owing on a credit card.
These sizable debts can also prevent the student from learning to save while they’re still at school, which can have an impact on their financial situation for years to come. Bills that aren’t paid on time can cause a lot of damage to a student’s credit score, and the same applies too, to parents who have co-signed for the card.
Some credit cards have high annual fees and interest rates, so it’s important to compare online credit cards to make sure you get a good deal. Taking the time to find a good offer could save you a significant amount of money down the line.
How Parents Can Help
Parents give their children credit cards when they start university, mainly for the convenience that the card provides. However, students need to be taught how to use their cards responsibly, to avoid overspending and building up unwanted debt. There are several things parents can do to help their children improve their money management skills.
Set down the rules and regulations and stick to them. By letting them know what the card should be used for you can establish the ground rules. If the rules are broken, the card can easily be taken away.
Limit the card’s usage to only school expenses such as books and so forth, rather than entertainment, and let your child know too, that you expect them to use it to pay monthly bills regularly.
Talk to your child about using the card wisely to avoid high interest rates by paying off the balance in full each month. Make them aware of identity theft and the things to be aware of when using the card online and in stores.
Students must understand how important it is to only use the card to charge for amounts that they can afford to pay, and that the key to responsible credit management is to keep their charges to at least 30% lower than their credit limit.
Students must learn that using their credit card wisely while they’re still in school will help build strong credit record. This will open many doors for them in the future, such as when they need to borrow money to buy their first house or car, making their financial future much more straightforward.
College education is not cheap; the cost seems to increase each year and the level of debt as recorded by student loan statistics confirm this. The $1 trillion involved is truly staggering. That of course excludes details of the money lent to students by their parents and other revenue raised to allow students to complete their education as a prelude to career. The chances of a successful career are perceived to increase for graduates but they mostly face repaying their debts as their pay checks begin to come in.
It is essential that a student and his or her parents do some research to obtain the money required unless it has already been safely saved anticipating the future needs. That can be difficult and the recession certainly destroyed many family’s savings.
Alternative Loans Specific to Education
The Federal Stafford Loan is competitive. Those who qualify get subsidized; the interest is paid by the Government for the time the student is still at college. Unsubsidized loans are available to all and interest deferred. The loan rate is capped at 8.25% but is variable. The amount that can be borrowed varies from student to student but is never more than $31,000 in total. Parent PLUS Loans and Perkins Loans are two other avenues of finance while private loans generally require a co-signatory. The latter are particularly aimed at needy students and their numbers have also increased since the recession struck a few years ago.
Other Revenue Sources
Parents can re-mortgage their homes as another alternative though the problems that the real estate market experienced during the recession has meant that the level of equity that many families owned was reduced and is just recovering. There is sometimes a cash element to an insurance policy or the chance of withdrawing a sum from the 401K Retirement Fund though the latter has an impact on retirement provisions and that can be a dangerous move.
That should be a last resort. Everyone needs to make proper provision for retirement and keep making contributions. That is a discipline that should lead to a comfortable retirement and that is less likely to happen if people draw money back out for other use.
Pay Off Expensive Debt
If you have a child in his or her mid-teens who is almost certain to continue on to college before starting to work then you should be making the suitable preparations to ensure their time can be funded. If recent years have been difficult because of the recession then it may be a challenge. What is certain is that if you are to help in any significant way then you need to look at your financial position and make some appropriate decisions. Certainly you need to get rid of any expensive debt you may currently funding. A common example is a credit card balance that incurs a high rate of interest each month. You can pay such amounts off with a personal loan at a much lower rate of interest if you have a regular income and appear capable of making the repayment instalments throughout the agreed term of the loan.
A Good Budget
It highlights the absolute need for everyone to have a budget and the discipline to follow it. It must show you are ‘balancing the books’ to start with mindful that if there are imminent education costs to add there may be the necessity to make economies elsewhere. The personal loan is one part of that. Certainly other household expenditure may be reduced by seeking more competitive utility suppliers, insurance premiums and telephone network costs.
The budding student can perhaps contribute as well? There are part-time jobs available now that the economy is improving. Those parents who have instilled the value of money into their children at an early age may well find that as teenagers they are more than willing to do a little work and they may have saved money themselves in addition.
There is certainly great merit in continuing education and with a little financial prudence it should be affordable. The benefits should come in the future with the prospects of a higher paid job as a result of graduating before going into the jobs market.
A few weeks ago I posted a review of Dave Ramsey’s College Planning Service. You all had mixed reviews of the product, and many people have come down hard on Dave for the product.
So, because I am not Dave, and because I do not have a cushion of millions to fall back on if a product/idea goes bust, I wanted to float an idea by you all before pursuing it any further.
Considering a FAFSA Prep Service
A coworker of mine was talking to me recently about how the lines at our local community college’s financial aid office are out the door each semester. Their office is woefully understaffed and the people who truly need help filling out a FAFSA, or answering their financial aid questions, are swamped.
Do you think these same people would pay to have help completing their FAFSA? Rather than wait in a long line in a financial aid office, would they rather go sit in a cushy chair across from a personalized advisor, and pay to have help filling out the FAFSA?
Consider this, FAFSA.com, the non-government entity run by Student Financial Aid Services, Inc. completes tens of thousands of FAFSA applications each year and they charge $79 for each application. People still pay this fee even though the FAFSA can be completed for free at www.fafsa.ed.gov.
Why do people pay this? To be fair, I know that many folks stumble across FAFSA.com and think it is the official government site, even though it clearly states it is not. SO a portion of these customers are there because of a lack of knowledge.
The rest however, have made it very clear that they are willing to pay for this professional service, and to have personalized assistance in completing their FAFSA.
In talking with a number of these folks, they view it as no different than paying someone else to complete their taxes each year. They know they could do it themselves for free, but they are too busy/confused/lazy to do it themselves.
Does it Defeat the Entire Purpose of Financial Aid?
Does a service of this kind defeat the entire purpose of financial aid? Most often, the people submitting a FAFSA application are the ones who need to qualify for need-based aid. They don’t have $79 lying around to throw away on professional FAFSA assistance.
Would it be highway robbery to provide this service at a cost to college students and their parents?
These are the questions that I am wrestling with. There are many other physical limitations to a service of this kind, but before I move any further in the planning phase of this business, I need to iron out the ethical dilemmas.
I am looking forward to hearing your thoughts!