Student Financial Wellness
Aside from managing your academic life, part of the challenge of being a student is learning how to manage your expenses and how to borrow and use credit wisely. We believe building basic money management skills now provides a solid foundation for a lifetime of financial success.
The goal of the successful Start program is to ensure that Boston College's students are financially literate for their lifetime by offering a series of workshops and seminars, led by Boston College employees and expert guest speakers, related to all aspects of personal financial management.
Questions? Comments? Contact Successful Start at firstname.lastname@example.org. Like Boston College Successful Start on Facebook, and don't forget to follow us on Twitter!
|February 21||Investment Basics Workshop by Edmond Ryan||4 p.m.–5 p.m.||Fulton Hall 423 (RSVP here)|
|March 14||Ace the Interview: Tips for Behavioral Interviewing Workshop by Julianne Smith||4 p.m.–5 p.m.||Fulton Hall 423 (RSVP here)|
|March 15||Time to Buy a House? Workshop by Paul Ciampa||4 p.m.–5 p.m.||Stokes Hall N103|
|March 21||Building your Investment Portfolio by Edmond Ryan||4 p.m.–5 p.m.||Fulton Hall 423 (RSVP here)|
Missed one of our workshops or events? The following is a list of the presentations used in each workshop or event.
- Money, Credit, and Loans (Virtual Workshop)
- Credit 101 (PDF)
- Credit 101 (Virtual Workshop)
- Credit 200 (PDF)
- Credit 300 (PDF)
- Evaluating Credit Card Offers (PDF)
- Improving Your Credit Score (PDF)
- Management of Consumer Credit (PDF)
- The Winning Score (PDF)
Financial Aid Workshops
Graduation Topic Workshops
- 5 Weeks, 5 Months, 5 Years After Graduation (PDF)
- Budgeting for Major Purchases (PDF)
- Getting to the Next Level (PDF)
- Graduation Boot Camp (Virtual Workshop)
- Evaluating and Negotiating a Job Offer (Virtual Workshop)
- Budgeting (PDF)
- Money Management (PDF)
- Introduction to Budgeting, Banking, and Credit (Virtual Workshop)
- Relationships and Money (Virtual Workshop)
Financial Planning Workshops
- ABC's of Financial Planning (PDF)
- A Roof Over Your Head (Virtual Workshop)
- Financial 101 for Your First Apartment (PDF)
- Financing Study Abroad (PDF)
- Introduction to Investing (Virtual Workshop)
- Introduction to Investing (PDF)
- Investment Basics (Virtual Workshop)
- Creating A Savings Plan (Virtual Workshop)
Learn about Money Management
Want to learn about money management in a one-on-one setting? Connect with a Money Mentor! Successful Start offers Money Mentors who can help you establish a budget, learn about credit, and set realistic savings goals. Mentors receive training in personal finance and then meet with students to provide individualized coaching. Interested? Send an email to email@example.com or fill out a Mentee Questionnaire below to be matched with a mentor.
Teach Money Management
If you would like to help others with money management, fill out the student application below to become a Peer Money Mentor.
If you would like to help others with money management, fill out the staff application below to become a Peer Money Mentor.
A budget can be an incredibly important resource in building stable financial habits. It can help you determine your financial resources by helping you pay attention to your monthly income and to decide ahead of time how you will spend it.
Creating a budget can help you reduce or eliminate unnecessary expenditures as you keep track of all of your expenses. This will allow you to determine the lifestyle that is most appropriate for you. Budgets are helpful for everyone, regardless of age or income. They allow you to achieve your financial goals and know exactly where you stand in terms of your finances.
The first step in creating a realistic budget is to take an honest look at monthly expenses. Keep a small notepad in your pocket and keep track of all your expenditures for one month, or figure out another easy way for you to track your money. Once you do this, it is important to examine the difference between "needs" and "wants." Identifying "need" spending versus "want" spending will allow you to see areas where you can cut spending and save money. The more detailed your budget is, the better you will be at estimating your expenses and your future savings.
There are many ways to purchase goods and services. You can use cash, debit or ATM cards, checks, credit cards, and loans. It is a good idea to know exactly how using any of these methods will affect your financial situation.
Credit cards are not funded by a bank account; they are a form of borrowed money, supplied by credit card companies. As a college student, you are a prime target for credit card companies. It is important to understand all of the costs of having a credit card. There are many extra fees and possible high interest rates.
In the future, it will be important to have a good understanding of your budget in order to plan for major purchases. Buying a car, purchasing a home, or taking out a loan requires you to know if you can afford the payments each month. By working on your budgeting skills now, you will know exactly what you can afford in the future.
It is hard to gauge how much money we are really spending per year and how much we are failing to save without a budget. With the availability of debit cards, we use less and less material cash, making it hard to notice when we are spending excessive amounts of money. With online banking, we can see how much money is going out and how much money we are putting into specific accounts.
Saving can make a huge difference in the way you see your money, your work, and your life. Starting to save today will make a big difference in the quality of life you have in the future.
Most people include a savings plan and savings goals when creating a budget. For a student or recent grad, the most important part of saving is not the amount but simply the act of beginning to put away a little each month. Putting your money to work for you as soon as possible will pay greater dividends in the long run.
Reducing your expenses on an already tight budget may seem difficult, but even a small change can make a big impact. Simply by skipping a $4 coffee or bringing your lunch 5 days per week, you can save nearly $1000 per year. Having a grocery list will help you avoid impulse buying. When buying clothes, stick to the basics, and make minor repairs instead of replacing them. Shopping at discount stores and clipping coupons will help save even more.
There are four main options for saving at banks and credit unions: checking accounts, money market accounts, savings accounts, and CDs (Certificates of Deposit).
The difference between saving and investing is time; generally, we save for short-term goals and invest for long-term goals. For example, if you have a short-term goal that you want to reach, or money you will need in an emergency, you require savings. Down payments on a car or house, or paying for a vacation, are examples of short-term goals. A long-term goal, like funding your retirement or a child's college education, requires investment with a higher risk.
When you use credit, you are borrowing money. A lender gives you cash now to make a purchase, and you agree to repay that amount over time, with interest rates and sometimes fees also applied to the borrowed amount.
Credit cards can be used during emergency situations. The card, itself, is convenient and a safer option for online purchases. Credit cards can be safer than carrying cash and may include additional benefits such as "cash back" and "buy now, pay later" options. In addition, potential landlords, car loan lenders, and employers in fields such as banking and government will all review your credit and payment histories. A good payment history demonstrates responsibility—a trait most employers seek.
The biggest risk of using a credit card is also its greatest benefit: convenience. It's very easy to make an impulse purchase, and this can lead to negative credit card habits. Many credit cards can raise interest rates up to 29.99% in just a few months. In addition, there are many fees associated with credit cards. Late fees average $29. Annual fees range from $25 to $60. If you exceed your credit limit, it can cost you as much as $25 extra per purchase over the limit. There are also cash advance fees, and transferring your balance can include a fee. Being late on one payment can increase your interest rate immediately.
Suppose you charged $100 each week for one year and made only the 3% minimum monthly payment. Because interest is also accumulating on your card's outstanding balance, your year-end balance would be $4,713. This is the total after deducting the $960 in payments you made throughout the year. By the end of the year, your reasonable payments will have grown to $146. Even if you cut up your credit card after that one year, it would take you 19 years to pay off that one year's worth of purchases, and you would end up paying $4,845 just in accumulated interest.
As a student, you will have to decide for yourself whether you can handle the responsibility of a credit card. They are easy to get but not so easy to manage, especially if you end up with a high, unpaid balance on which interest is accruing, but payments are not being made.
When making your decision about a credit card, ask yourself:
- Do I need a credit card?
- Can I afford a credit card?
- Will I be able to pay off my balance each month?
If you decide to apply for a credit card, be a smart consumer and shop around. Visit resources like bankrate.com for guidance on evaluating credit card offers. Look for a company that offers the following:
- A low fixed-interest rate, finance charges, or Annual Percentage Rate (APR)
- No annual fees
- A grace period (time during which no payments are due) before finance charges are posted
- Other benefits, including purchase warranties, free gas, airline miles, etc.
Unlike repayment on a traditional loan, such as a student or car loan, credit cards do not allow you to spread the amount you owe over a fixed period of time. Instead, you are required to make a minimum monthly payment, which is the smallest amount you can pay and still meet your cardholder agreement (the terms you agree to meet when signing up for the card). The minimum payment is usually 2–3% of your outstanding balance. As your credit balance increases or decreases, so does the minimum amount you are required to pay monthly.
Sample Credit Card Repayment
|Amount Borrowed||Interest Rate||Monthly Payment||Number of Monthly Payments||Total Amount Repaid|
|$5,000||19%||35 of balance (initially, $150)||238 (20 years)||$10,360|
Use your bank debit card if you need cash, not your credit card. The interest rate on your credit card is usually 2–3% higher for cash advances than for purchases. Cash advances don't get paid in full possibly until the balance of the credit card is paid off.
- Annual Percentage Rate (APR): APR is like a price tag on the borrowed money—it represents the rate of interest charged on credit card purchases, plus fees, expressed as a yearly rate. Federal law (under the Truth in Lending Act) requires credit card issuers to disclose their APRs as a way for consumers to compare the terms of different credit cards by using this common index.
- Interest Rate: This is the charge attributed to receiving and using the loan amount, shown as a percentage of the loan amount. For example, if I borrow $100 at an interest rate of 10%, I'll pay $10 additional for the privilege of using the borrowed $100. (Note: When you make a payment, the money is applied first to fees, then to interest, and last to the principal.)
- Fixed or Variable: Fixed rates don't change throughout the life of the loan. Variable rates, by contrast, have an adjustment period and can change annually, monthly, or quarterly. The longer the adjustment period, the less frequently the rate will change, which is more beneficial for you, the borrower.
- Grace Period: The grace period is the number of days you have before you'll be charged interest on your purchase amount, usually between 20 days and one month. It encourages you to pay off your balance within one billing period. The longer the grace period, the better off the borrower is.
A credit report is a history of your ability to manage credit. Think of it as like a transcript of your credit management skills: It summarizes your past failures and accomplishments, and it gives you an overall credit grade, known as a credit score. Lenders report your payment history, amount borrowed, credit limits, and delinquencies to credit reporting agencies every 30 days.
Your credit report has a summary of key information that pertains to you: your personal information, name, date of birth, and Social Security Number. It also includes your credit history from banks, retail stores, and finance and mortgage companies. It includes public records, tax liens and bankruptcies, and court judgments. It lists other authorized parties who have received your credit report. (Note: Your report does not mention your race, ethnicity, gender, religion, country of origin, checking or savings account information, medical history, major purchases paid in full with cash or check, or business accounts, unless you are personally liable for your business's debt.)
You are entitled to one free report each year from Equifax, TransUnion, and Experian. You can decide whether receiving one credit report every four months, or all three at once, suits your needs better. Visit AnnualCreditReport.com for more information, or call 877-322-8228.
Under the Fair Credit Reporting Act (FCRA), credit reporting companies and credit information providers are responsible for correcting inaccuracies in your credit report. You should inform the credit reporting agency in writing about the information on your report that you believe is inaccurate. You should include with this letter COPIES of any documents you may have that support your claim. Credit reporting agencies must investigate the claims within 30 days, and must also inform the credit information source of the dispute so that they may also launch an investigation.
If the information is found to be inaccurate, the credit information source is required to notify all three credit-reporting bureaus so that your report can be corrected and updated. You may also request that the credit-reporting agency send notices of correction to anyone who reviewed your report in the last 6 months, or 2 years if the report was reviewed for employment purposes.
If the investigations do not resolve the dispute, you may request that a statement of dispute be included on your report in the future. You may also request that a letter stating your dispute be sent to anyone who reviewed your report in the last 6 months, but you will likely have to pay for this service.
Think of a credit score as a test score: the higher the score, the better the grade. The more negative marks on your credit report, the more points taken off of your score.
Once a creditor has a score, they assign a letter grade. This letter grade translates directly into the rate and term you'll receive in any loan you apply for. A and B grades produce loans that are good for borrowers. Most top banks lend only to A- and B-grade people. Those with less-than-perfect credit are lumped into the subprime category. Just like bad high school grades limit your choice of colleges, bad credit grades and scores limit your choice of banks and lenders.
The two biggest determinant factors are payment history (35%) and amount owed (30%). Other factors include length of credit history (15%), new credit (10%), and type of credit used (10%). Generally, a longer credit history will increase your score. New credit is based on how many new accounts you've established, how long it's been since you opened them, and how many requests for credit you have made. The type of credit used is based on the overall mix of credit cards, installment loans, mortgage loans, etc. that you have. The more balanced the mix, the more likely this factor is to improve your score.
If you are currently in debt, have trouble paying your bills, or have accounts being turned over to debt collection agencies, there are steps you can take to improve your credit report and help rebuild your credit score. The following tips were derived from recommendations given by the Federal Trade Commission (FTC) for consumers.
Remember that there are no quick fixes for damaged credit; only time, effort, and planning can remedy past mistakes. Be wary of companies claiming they can fix accurate negative information on your credit report for a small fee—it is impossible for them to do this.
Review Your Credit Report
The first step to rebuilding your credit is reviewing your credit report. Once you have reviewed your credit report, you can begin to assess the accurate negative information and start to formulate a plan to improve your credit and decrease your debt. You should also be checking your report for inaccuracies and accounts that you believe are not yours, which you can dispute with the credit reporting agency.
Propose a realistic budget. Contact creditors as soon as you are having trouble paying your bills, explain your situation, and try to work out a modified payment plan to reduce your payments to a level that is more manageable for you.
If you feel that you cannot work out a budget, manage your bills, and work out a repayment plan on your own, you have the option of contacting a credit counseling service for help. Try to meet with a credit counselor in person if possible, and make sure to thoroughly research an agency before contacting them for credit counseling services.
Personal bankruptcy is considered the debt management option of last resort because its effects on your credit are far-reaching and long lasting. The consequences of filing for bankruptcy are significant, and the decision to do so should only be made after careful consideration of the pros and cons of such an action. For more information, you can visit the FTC website.