Tuesday, June 21, 2016

Preparing Your Finances for College

A college education can be one of life’s biggest expenses, but an education is one of life’s most rewarding experiences. Don’t let the financial burden of school deter your child. Help them learn to be financially conscious and prepared for college. Learn how you can help below:

1. Be Financially ConsciousIf you haven’t had much education in saving and spending money, now is the time to start. There are online courses, community courses, and a wealth of resources online available. This article from Dailyfinance.com can help you learn to be financially savvy. Learn how to budget, how to prioritize expenses, how to save, how to use debit and credit cards, how to use online transactions safely, and more. This can be overwhelming to the student learning to budget money for the first time, but laying down the groundwork will make the transition to college and adulthood that much easier. There are also tons of excellent phone apps to help you keep track of your spending and saving habits.

2. Save Early
Have a serious conversation about who is paying for college. Make it an expectation for your child to contribute to their education. Encourage them to get a part-time job throughout high school and college to help contribute to the cost. This can help your child develop a strong work ethic, become more disciplined with their finances, as well as help them gain professional experience and develop skills.

3. Learn How to Open and Use A Bank AccountIf your child doesn’t have a checking and savings account, teach them how to open and use each one. Learn how to use ATMs associated with your credit union or bank in order to withdraw fee-free.

4. Credit Card or No Credit Card?
It seems like the second students graduate high school, your mailbox gets inundated with credit card offers. If your child chooses to get a credit card, help them look for the best possible offer. Encourage them to sign up for a secured credit card, which helps establish a credit limit. Remind your child to use a credit card as a way of building credit, not as a way of spending money. Teach them to live within their means and use a credit card for expenses like gas or groceries - expenses which they can easily pay back each month.

5. Learn About the Financial Aid Process

Help your student complete the Free Application for Federal Student Aid (FAFSA) as soon as possible to help you and your child make financial decisions for college. Once completed, your family will receive information in the form of a Student Aid Report (SAR), an Expected Family Contribution (EFC), and a Data Release Number (DRN).

6. Research and Apply for Grants and Scholarships
Based on financial aid and/or merit scholarships, grants and scholarships are widely available and can help fund a major part of the college cost. Look for them at the national and state level in your community, through your high school, and more. There’s a treasure trove of money for higher education, you just have to put in a little elbow grease to find it.

7. Apply for Loans
The loan process can be tricky to navigate, but learn about the two federal student loan programs, the William D. Ford Federal Direct Loan program which offers four types of loans, and the Federal Perkins Loan Program, a school-based program for students with “exceptional financial need.” Although they are often associated with higher interest rates, explore the options of private student loans. Many institutions offer them, but explore your options carefully before choosing.

Picking a loan from a credit union rather than a major institution has many benefits. With a loan from a credit union, you can enjoy lower interest rates, flexible payment plans, and much more. Visit our student loan page to learn more and to get started.

A college education can be expensive, but far from impossible, and St. Cloud Federal Credit Union can help along the way. Plan accordingly and learn early on about how your family can best prepare for the financial expenses of college.

Save for the Future: High School to College

While in high school, saving money is not the top concern for many students. High school students don’t have to worry about bills, tuition, or other expenses that are sprung upon them once they enter college. Learning about financing and budgeting at an early age will come in handy when you are advancing in your life and career. Even if you are starting late, it is a good idea to make a budget and keep track of your finances, even if you are still in high school.

Get The App
A good budgeting app can help you keep track of finances and help find areas where you can cut back. Some of the most popular apps include:
  • Mint - Mint connects your bank account and automatically inputs purchases. This feature helps you spend less time entering every purchase, which is one of the hardest parts of keeping a budget.
  • Toshl - Toshl Finance is an app that makes banking simple with setting up a monthly budget. Toshl’s budgeting section has you set a max line for the month, that will give you a great view of how close you are coming to going over your set budget for the month.
  • Left to Spend - Left to Spend is as simple as it gets when it comes to a budget for the month. All you need to do is set a budget and then simply subtract from there.

Learn the Tricks
College is all about adapting to your new surroundings, learning on the fly, and stretching your budget. To stretch your dollar a little further, try some of these simple tricks:
  • Rent textbooks or sell them back at the end of the semester
  • Walk, use public transportation or ride a bike instead of using your car. Protip: Many college students ride public transportation for free with their student ID cards
  • Check your favorite stores for student discounts - many offer them
  • Look into a campus gym versus a gym in town
  • When planning meals, make dinner with friends and split the cost of groceries
  • Don’t buy unnecessary school supplies. Why buy notebooks when you can type on your laptop
  • Wait to get a pet until after college – a pet can become very expensive
  • Don’t borrow more than you need. Most often, the amount you qualify for is more than you will spend in a semester - if you’re responsible
Invest Wisely
Even the best budgeting habits sometimes aren’t enough to pay for the mountain of expenses that come with attending college, and many need to take out student loans. A good choice for students is St. Cloud Federal Credit Union’s student loans. Loans from a credit union like St. Cloud Federal offer students lower interest rates, flexible payment plans, no organization fees, more. Students can qualify for lower rates based on their grades - the better the grades the lower the rate! And if ten percent of the loan is repaid within the repayment period, the interest rate will be reduced by one percent.

Need a cosigner? Most students do. But once you graduate and make 24 consecutive payments on the principle balance, you have the option to release your cosigner, which is good news for them and helps you build your credit. You can borrow as little $2,000, or up to $120,000 for undergraduate loans - up to $160,000 for graduate loans.

Check out our Q&A page for more information, or get started on the loan process through St. Cloud Federal Credit Union.

Saving or your college career might seem like an impossible feat. It’s not impossible, you just might need a little help to get you started. That’s exactly what we like to do - help people realize their dreams.