The Path to Financial Freedom
It is essential for students to develop financial literacy skills. Decisions made before and during college will have a major impact on your future. Before making financial decisions, it is important to educate yourself. Provided below are a variety of resources aimed at helping students make informed financial decisions.
1) Apply for financial aid to determine whether you qualify for help paying for college.
- Make sure you understand financial aid basics, including the difference between loans, grants, and scholarships.
- Use online calculators to estimate the cost of obtaining an education.
- Consider work-study programs.
- Apply for LCCC and UP scholarships.
2) Monitor your student loans, avoid borrowing more money than you actually need, and know which repayment option is the best fit for you.
- View your student loan history by logging into the National Student Loan Data System.
- Be aware of the different types of student loans, loan consolidation, public service loan forgiveness programs, cancellation and discharge policies, and various repayment options, including income-based repayment
- Make sure you understand the difference between federal versus private loans, which tend to have less flexible repayment options and higher interest rates.
- Use the Debt/Salary Wizard to determine how much you should borrow and manage your student loan debt wisely.
- Use the Department of Education’s online student loan calculators to estimate your loan payments based on your current debt level and determine what your payments would be if you take on more debt.
3) Establish, build your credit, and monitor it regularly. In today’s society, having good credit is essential if you ever plan to purchase a new home or car.
- Obtain 1 free annual credit report every 12 months from each of the nationwide credit bureaus – Equifax, Experian and TransUnion.
- If you have old debts, contact your creditors and inquire about the possibility of setting up payment plans.
- If you need to establish credit, consider obtaining a secured credit card. Educate yourself about secured credit card scams before choosing this option.
- Pay bills on time. Late payments can have a detrimental effect on your credit score. Organize due dates by creating a bill schedule.
4) Educate yourself about credit cards.
- Use credit cards wisely, avoid over-using them, and pay more than the minimum monthly bill.
- Opt-out of receiving credit card offers online or call 1-888-567-8688.
- Discover how long it will take you to pay off your credit card debt and the total amount you will actually pay making minimum monthly payments by using Bankrate’s online credit card calculator or the Federal Reserve’s credit card repayment calculator.
- Learn ways to minimize credit card expenses and other tips.
- Protect yourself from credit card fraud.
5) Budget your money. Not budgeting is one of the top mistakes college students make.
- Spend your financial aid refund wisely. Open a checking or savings account so you do not have large sums of cash at your disposal.
- To help manage your money, use the student budget tool to plan for an entire academic year.
- Take advantage of student discounts, which many area businesses offer.
6) Guard your personal information in order to minimize the possibility of having your identity stolen.
- Shred or destroy all documents with personal information and exercise caution when making purchases online.
- Avoid using personal information, such as social security numbers, birthdays, or your mother’s maiden name to create passwords.
- Check your credit report annually and your bank statements frequently for accuracy.
- Visit the Ohio Attorney General’s Website, the FTC Identity Theft Website, and/or the President’s Task Force on Identity Theft’s Website for additional information.
- If you’ve been a victim of identity theft, take action immediately and then file a complaint with the FTC and your local police department.
7) Identify ways to reduce spending and save whenever possible.
- Document your spending and determine where your money goes by completing the Expense Worksheet.
- Try to set money aside for emergencies.
8) Avoid payday loans, which are known to have extremely high interest rates, rent-to-own centers, pawnshops, and check cashing stores.
9) Graduate from college.
- College graduates earn more money and have lower unemployment rates than those who do not have a degree.
Financial Literacy Resources
Financial Literacy Websites
- CashCourse – Your Real-Life Money Guide
- 360 Degrees of Financial Literacy for College Students
- Mapping Your Future
- Higher Education Solutions – Money Basics