Financial Literacy for Students and Families

1. Practice the 50/30/20 rule on a monthly basis. Common money management advice is that individuals should take their monthly income and use 50% of earnings toward necessary items, 30% toward items that are wanted, and 20% of earnings are saved.
2. Make a note of important payment deadlines. Important items that may have payment deadlines including housing and utilities (for students living off-campus), auto insurance, monthly payments and classes.
3. Review current monthly spending practices and see if any can be changed.
4. Use external resources to assist with budgeting. Such tools may include mobile apps, spreadsheets or financial advisory services.
5. Seek opportunities through BW to assist with income. For example, students are encouraged to look for on-campus employment or resident assistant positions to support paying for their education.
6. Create short-term and long-term financial goals.
7. Explore alternative opportunities to save money. Students are encouraged to check out scholarship opportunities, mobile apps for coupons, and student discounts when looking for ways to save money.

• Ohio Department of Education – Provides resources to individuals on financial literacy, budgeting, etc.
• Mymoney.gov – Gives students access to budgeting worksheets, checklists and calculators for planning finances.
• CashCourse – Helps students with financial literacy through homework and assignments; college students can register for a free account.
• Credit Karma – Students can use this app to manage money, set savings goals and create worktable budgets.
• MoneyGeek – Provides individuals insight into budgeting based on their age demographic.

When it comes to money management, students and their families are not alone. While bank systems contribute to the overall function of the economy, they also assist borrowers and spenders alike.

Deposits

Individuals can use banks to deposit their money. Usually, individuals can deposit their money into two types of accounts: checking and savings.

• Checking accounts are typically used for daily spending.
• Savings accounts typically have higher interest, which helps individuals save and increase the money they have deposited.

Lending

Banks can also help individuals who are seeking to borrow. Individuals can seek loans for many expenses, including equipment, businesses and home mortgages. College students can also seek private educational loans through banks. Learn more about private education loans.

An individual’s bank is dependent on their personal preference and financial situation. Banks will differ in terms of interest rates, online access, use of fees, branch accessibility, and more.

A credit score plays an important role in financial and spending decisions. Companies will evaluate credit scores to determine housing options, loan and credit card eligibility, interest rates and credit limits, and more.

According to the Consumer Financial Protection Bureau, a credit score is a prediction of a person's credit behavior based on information from a credit report. A "good" to "excellent" credit score is usually 670 or higher.

Best practices to achieve a strong credit score include:

1. Make loan payments and pay credit card bills on time.
2. Ask for higher credit limits and keep expenses below those limits.
3. Only apply for credit that is needed.
4. Increase available credit.
5. Become an authorized credit card user or find a co-signor.
6. Monitor credit reports and dispute errors.
7. Credit cards, when used properly, can positively impact a spender's credit score.

A credit card is a convenient lender issued line of credit that allows the spender to borrow money for purchases. Interest rates are added to the outstanding balances if not paid off monthly; the amount of interest is typically dependent on credit history and bank offerings.

In addition to the line of credit, successful use and payment of the card can qualify the borrower for certain benefits, such as travel miles, cash back, and reward points.

Learn tips for when to use or not use a credit card.

• Bankrate – Bankrate guides savers and spenders through the next steps of their financial journey. Offering free tools and resources to help you reach your goals.
• Nerdwallet – A reputable personal finance site with the goal of providing quick and simple comparisons for a wide range of financial products, offering free tools and resources to users.
• PNC Student Banking tool – As a part of BW’s partnership with PNC, this tool helps college students with money management.

1. Recognize the difference between gift aid and loans. Gift aid, such as grants and scholarships, typically do not require any reimbursement from the student. Students who borrow a loan, however, typically are required to pay the loan back, in addition to interest. It is important for students to recognize the difference between loans and gift aid in order to determine the best repayment practices and eligibility requirements for different types of financial aid.
2. Understand the conditions of financial aid support. In most cases, students must meet certain requirements to receive financial support. For example, some private organizations that grant gift aid may ask that individuals meet certain GPA requirements, submit a new application every year, etc. Additionally, students must maintain Satisfactory Academic Progress (SAP) to continue to be eligible for financial aid at BW. Understanding the student’s responsibilities with financial aid can help ensure they are meeting requirements and continuing to receive financial support.
3. Understand loan interest rates. With private and federal loans, lenders must typically pay interest in addition to the amount borrowed. Interest rates are dependent on the loan borrowed and the lenders; for example, the current interest rate for direct parent PLUS loans is above 8%. It is important for borrowers to understand the interest rates of loans and repayment plan options to ensure they are paying the correct sum at the correct time. Learn more about types of loans.
4. Keep track of next steps with financial aid each academic year. In order to receive a financial aid offer letter each academic year, students must complete a new FAFSA application. In addition to this, students who receive gift aid from private organizations may need to complete a new application process for additional aid, depending on the terms and conditions of the aid. Setting reminders for financial aid or monitoring communications regarding financial aid can help to ensure that all steps are completed to receive optimal aid. Additionally, it is important for students to notify BW One Stop in writing of any changes to student enrollment, as this may impact aid.

FAFSA College Preparation – Shares tips and resources geared toward parents and students on how to budget, borrow and save.

FAFSA Budgeting video – Federal site helping students work through the ins and outs of budgeting for college.