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TRiO NEWSLETTER

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1. What is financial literacy?

2. Teresa: Create a spending plan

3. Steve: Buy used

4. Julie: Prioritize

5. Talese: Take the bus

6. Johnny: Be credit smart

7. Scholarships and you: Financing your education

8. Newsletter Archive

 

 

 

 

What is financial literacy?      

The President's Advisory Council on Financial Literacy defines personal financial literacy as "the ability to use knowledge and skills to Yellow piggy bankmanage financial resources effectively for a lifetime of financial well-being." (2008 Annual Report to the President)

Financial literacy is about more than just paying your bills and saving for retirement, though. Financial Literacy is about understanding one’s own financial circumstances and developing a healthy relationship with money. Financial literacy is not necessarily about becoming wealthy, as much as it’s about Road sign reading "Financial Freedom."learning how to use one’s finances to achieve personal goals.

TRiO Student Support Services for students with disabilities is excited about embracing financial literacy as a component of our overall goal: college success. We’re here to coach participants in developing strategies for minimizing student debt while being successful in college, applying to graduate school, and/or pursuing career goals.

To kick start this new activity, we're each sharing with you in this newsletter our favorite money saving tip and/or personal financial philosophy. Feel free to come talk to any TRiO staff member if you'd like to learn more or share ideas about financial literacy.We'll also be contacting you throughout the term.

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TRiO Staff: Our Favorite Money Saving Tips

Teresa: Create a spending plan

 Money management is a lot like time management, in that there is never enough money or time to do the things we want to do. We avoid managing our money and time because it is a difficult, unpleasant experience. However, once we take control of our money and time, life doesn’t seem so scary.

In my experience, before I can set financial goals and develop a budget, I take stock of my money. The best way I know of is to inventory my saving and spending habits by creating a cash flow log of my income and expenses. A cash flow log requires keeping a record of every transaction over a set period of time.  For me, I use a small notebook that I carry around in my purse. However, a log can be kept on a calendar, on a telephone app, or with a computer program. In the log, I write down all my transactions such as wages, bills, each swipe of the debit card at Aztec Market, and those spontaneous purchases at Starbuck’s. On a cash flow log, I write down the date, who got my money or who gave me money, and the money amount. For a student, the cash flow log might look something like this:

Date

Method of Payment

Item

Cost

Deposit

8/1/11

Auto Debit

Gym Membership

$29.95

 

8/1/11

Check

Rent for Shared Apartment

$675.00

 

8/2/11

Cash

Café Latte

$3.85

 

8/3/11

Debit Card

2 Movie Tickets

$23.00

 

8/3/11

Cash

Popcorn & 2 Drinks at Movie

$9.75

 

8/4/11

Deposit

Food Server Job

 

$687.00

8/5/11

ATM

Service Charge

$2.50

 

8/5/11

Credit Card

New Shoes

$69.57

 

8/5/11

Debit Card

Groceries

$42.87

 

 

While working on the cash flow log, I also project my monthly, quarterly, and annual fixed expenses. A fixed expense may be car payment, cell phone bill, and utilities. I then look at variable or flexible expenses which include food, entertainment, and clothes. As a college student your expenses may look like this:

 

Fixed Expenses:

  1. Apartment Rent
  2. Car Payment
  3. SDSU fees
  4. Mobile phone
  5. Utilities

Variable Expenses:

  1. Food
  2. Friday night movie
  3. Monthly outfit from the mall
  4. Textbooks
  5. Smart Phone

 

Once my cash flow log is completed and I've identified my expenses, I create a budget or spending plan. In my budget, the first thing I do is put money into savings for unexpected expenses—such as car repairs—and semiannual expenses—such as SDSU fees. I then budget for fixed expenses which I pay each month. My other expenses have some flexibility, so I ask myself some questions: what do I need now, what can I put off to a later date, and what is a desire that I can live without? Here are some examples a college student might think about:

 

 

We all have limited money. Taking control of our spending allows us to avoid unnecessary debt and spend money on things that are important to us as we pursue our college education.

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Steve: Buy used!

used bicycle

It may seem obvious, but many students forget about just how much you can save by buying used instead of paying the full price of a new item. One can find just about anything used: bicycles, laptop computers, cars—anything a college student needs. Some great places to start the hunt are Craigslist and eBay (unwanted items can be sold on these sites, as well).  Why not stop by the local thrift stores and garage sales?  Many thrift stores even offer student discounts on certain days, so you can save even more!

 clothing rack at used goods store

 

For an example of how substantial the savings are, consider a pair of Lucky brand jeans, which normally sell new for $100 a pair.  I have routinely bought gently used Lucky jeans at thrift stores for $10.  Wow!  With these savings, students can put money towards something else, like maybe a computer or text books.  If buying used clothes is just not your thing, consider other items that you wouldn’t mind buying used.  Along with saving money, you’ll also feel good about saving stuff from the landfill.  Happy shopping!

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Julie: One Word: Prioritize.

Tiny car painted pinkIt's just one little word, but it really does require a committed effort. A teacher once shared with me a piece of wisdom that I’ve since weaved into my own personal philosophy: The fewer possessions you desire, the more control you’ll have over your life. Yes, I realize this philosophy can be taken to an extreme, and no I do not advocate an “off the grid” ascetic lifestyle of eschewing material wealth. I do like to keep things simple, though. For example, I drive an older compact car that gets great gas mileage. My little car has acquired a few bumps & bruises along the way, but I haven’t paid to fix any dents that are merely cosmetic. As long as the car drives well, I’m happy. Sure, I’ve had strangers tell me they can fix the dents “cheap,” or even friends tell me the car does not exactly boast “success” to the world. Perhaps not, but I try hard not to fall into the trap of confusing net-worth and self-worth. To me, being successful is about waking each morning feeling rested and grateful for the life I lead (rather than experiencing sleepless nights worrying about unpaid bills).

The concept of “success” is somewhat nebulous, though, and perhaps that’s a problem. Our collective “dream” as a society is to achieve Opulent mansonmore than we were born into. One could choose to define “life achievement” by the attainment of educational and career goals that enable one to pursue personal goals (family, house, travel, and so on). Often, though, as with the events leading to the subprime mortgage crises, the concepts of achievement and success are distorted to mean material gain, encouraging unrealistic short cuts to owning more than one can comfortably afford.

I am never one to voice the platitude that “you can’t buy happiness.” Let’s face it, if you’re already happy Happy children playing in front of small houseand surrounded by loved ones, material comforts can sure enhance that experience. I do believe, though, that money is just a tool to help us achieve our other desires. If one’s greatest desire is to own a large house or expensive car, money is definitely the key to achieving those goals. Yet, if what one truly desires is to attain an education, meaningful employment, a healthy family - and the occasional family trip to a tropical island paradise -  it might not hurt so much to sacrifice a few other material wants along the way to those goals.

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Talese: Take the bus!

smiling bus driverOne of my favorite ways to save a little cash—and frustration—is by taking the bus to school. A semester-long student-priced transit pass from the Viejas Ticket Office costs $155. Although it’s true that a semester-long parking pass costs twenty dollars less ($135), considering that gas prices are about $3.75 a gallon, I’d say it comes out about even.

 City bus under Hillcrest sign

In addition to saving some money on gas, and wear and tear on my car, I think the bus is just a lot less frustrating. I really appreciate the extra time I get every day to review my homework: sometimes I squeeze in the last couple of pages of a reading, sometimes I will work on revising a draft of a paper or brainstorm for an upcoming assignment. In addition to giving me that extra time in the morning, I also really appreciate the ability to relax on the ride home. I don’t have to deal with the glare of the sun in my eyes, the traffic leaving campus or anxious drivers rushing home from work. I just lean back and do a little reading, text my friends—sometimes I even make new friends on the bus.

City bus at Belmont ParkI also find that buying a semester-long bus pass encourages me to utilize public transportation more than I normally would—the bus pass is good for all trolleys and buses in the county.City bus under Little Italy sign

 

Mass transit offers a great way to explore the city. Getting to Old town, Balboa Park, downtown, the beach, or even the local mall, is so much easier when I don’t have to deal with navigating through traffic. You can learn more, get transit maps, and check fares online at http://www.sdcommute.com/.

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Johnny: Be credit smart

Picture of a flashy red car stuffed in a shopping cart

We have all heard the horror stories about college students falling into debt traps because of credit cards.  Stories of students maxing out their cards and destroying their credit have led many students – myself included – to avoid credit cards completely.  While it is true that the allure of credit cards can pose a potential risk for those individuals who are not careful about how they budget their finances, credit cards are also the primary way students can build credit.  Having good credit is necessary for most large expenditures, including buying a car or house, renting an apartment, buying a cell phone, or applying for credit cards.  Even if there are no large purchases in the foreseeable future, most will want the option of someday purchasing a car or house, and without established credit this can be nearly impossible. Therefore, wholly avoiding credit cards can be dangerous. Instead, credit cards should be used responsibly.

 

Picture of a traditional house made out of dollar bills I received credit card offers throughout my early twenties but was hesitant to accept any of these offers.  I reasoned that instead of paying for things on credit, I should rely solely on the money I had in my wallet and in the bank.  However, eventually the time came when I could see purchasing a condo or house in the near future and decided it was time to start building my credit.  Unfortunately, what I discovered was that because I had not established any credit, I was unable to obtain a credit card. I found myself in the paradoxical situation that I could not get a credit card because I had no credit, and I could not build credit because I could not get a credit card. There are ways through my bank that I can build enough credit to eventually become eligible for a credit card, but they are slow and require a large investment of money.  If I had begun my credit building when I was younger I would not have found myself in this situation.

 

Cartoon clipboard displaying the words "credit score"My recommendation for students hoping to build credit is to use credit cards for smaller purchases, such as filling up the gas tank or buying groceries, then quickly paying them off.  Additionally, paying all your bills by their due date will create a positive credit history by ensuring that there are no negative marks on your credit report. By doing this, students can quickly build their credit so when it comes time to apply for an apartment, purchase a car, or buy a house, your credit will help instead of hinder. 

 

To obtain annual free credit reports from the three main credit agencies, visit www.annualcreditreport.com.  More information can be found at www.cashcourse.org.

 

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Scholarships and you: Financing your education

Scholarships can help finance a college education. Students are always looking for money to help pay for books, fees, and school supplies. Yet, they often neglect to consider scholarships as part of their ovearall financial package; a common assumption exists that scholarships are only merit based. While it is true that some scholarships are based on a high grade point average, many are not. Quite a few scholarships are based on more diverse factors, including area of study, financial need, community service, and study abroad.

hand holding a bag of cashHere at SDSU, the Office of Financial Aid and Scholarships offers hundreds of scholarships. Funding for scholarships comes from private donors, professional associations, SDSU alumni, and various community groups.  To learn more about scholarship criteria and how to search and apply for them, please visit the scholarship web page at http://studentaffairs.sdsu.edu/ofas2/scholarship/index.html.

Through the TRiO Project, Teresa can teach you how to navigate the scholarship web site and talk to you about the application process. Most scholarship applications require a personal statement and the TRiO staff can guide you in writing a clear, concise statement. If you would like help in exploring scholarships, please contact Teresa at tspoulos@mail.sdsu.edu or 619-594-4401.

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Archived Newsletters

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Spring 2011


Fall 2010

Spring 2010

Fall 2009


Spring 2009

Fall 2008

 

 

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