UNL Student Money Management Center

1. UNL Student Money Management Center Money Smart

2. Introduction Erin Wirth, Accredited Financial Counselor Peer Money Coaches Dr. Kathy Prochaska-Cue, Program AdvisorPh.D., Accredited Financial Counselor, Extension Family Economist Building a Financial Education Brand & Marketing Communications Outstanding Planning Education & Financial Counseling Center

3. Why Are We Here? • Committed to encouraging students to take responsibility for their financial futures • Students to build good relationships with money • Students have confidence in their financial futures • Are able to meet their financial goals • Creating and upholding a culture of financial empowerment among the student body through financial education

4. Personalized Money Management Sessions • One-on-One Money Management Coaching SessionsWith an Accredited Financial Counselor or Peer Money Coach, a UNL Student Common Session Topics: * Spending Plans * Financial Goals * Organizing Finances * Establishing Credit * Saving Money * Debt Repayment * Investment Education * Understanding Financial Aid * Selecting Employee Benefits * Major Purchases

5. Introduction Purpose: • To inform you how we answer your students’ financial questions. • To give you some reminders about financial education so if your students come to you with financial questions, you’ll be prepared. The 6 $$$ Questions We Get Asked Most by UNL Freshmen

6. Stories from UNL Parents • Remember: • You are a great educational resource for your students • By talking about your financial mistakes, you can help prevent your student from making the same mistakes • Know financial mistakes don’t mean you raked up huge debt or foolishly spent your money • NOT getting basic financial education is a mistake!

7. #1 UNL Freshman FAQs It’s always in the media that students are in lots of debt. How can I minimize my debt load?

8. Checklist for Minimizing Debt • EVERY YEAR!Complete the Free Application for Federal Student Aid at: http://www.fafsa.ed.gov/* Will need parents tax information* Can use IRS data retrieval process* Do this close to Jan. 1st Some need is first-come, first-serve • UNL Will Inform You What You Qualify ForWill be listed at: https://myred.nebraska.edu • Understand How Many Grants & Scholarships You Are GettingFinancial aid you DO NOT pay back • ONLY BORROW WHAT YOU NEED!

9. UNL Costs

10. Checklist for Minimizing Debt • Look At SUBSIDIZED Loans = 3.86% AND Perkins Loans = 5%Student DOES NOT pay interest while in school or during 6-month grace period • Then Look At UNSUBSIDIZED Loans = 3.86%The loans that DO accrue interest while you’re in school • Consider Parent PLUS Loans 6.41% & Private LoansHowever, know the disadvantages of these loans

11. Checklist for Minimizing Debt

12. FAFSA FAQs How Child Assets are Assessed • Assets listed under the student’s name are weighed at 20% of their value when calculating the expected family contribution (EFC) • Parent’s Assets - weighed at 2.6%- 5.6% of their value (based on a sliding income scale and after certain allowances)

13. FAFSA FAQs Taking Retirement Funds Distributions • Retirement funds are sheltered from the need analysis process • If you withdraw funds before the financial aid application is filed, you will have converted those funds into an included asset

14. Common FAFSA Mistakes • Incorrectly filing income taxes as head of householdIf there is an error in the head of household filing status, you’ll need an amended tax return • Listing parent marital status incorrectlyIf the custodial parent has remarried, you'll need the stepparent's information as well • Failing to count the student as a member of the household • Including retirement assets on the FAFSA • Inflating parents’ educationIf parents didn't graduate from college, select "high school" as the highest education attainment

15. Best Student Loan Tips:Student Loan Cancellation Programs • Public Service Loan Forgiveness Program • The borrower must be employed full-time in a public service job for 10 years • Cancellation of the remaining balance due on eligible federal student loans after the borrower has made 120 monthly payments under the Income-Based Repayment Plan

16. Best Student Loan Tips:Student Loan Cancellation Programs • Public Service Loan Forgiveness Program • Emergency management • Government • Military service • Public safety & law enforcement (police and fire) • Public health • Public education • Early childhood education • Social work in a family service agency • Public services for individuals with disabilities or the elderly • Public interest legal services • Public librarians • School librarians

17. Student Loan Fees • Deducted proportionately from each loan disbursement you receive • You're responsible for repaying the entire amount you borrowed and not just the amount you received • Here are the current loan fees for federal student loans: • 1.051% for Direct Subsidized Loans and Direct Unsubsidized Loans • 4.204% for Direct PLUS Loans for parents and graduate and professional students • There are no loan fees for Perkins Loans

18. #2 UNL Freshman FAQs So, if I don’t want to be in debt forever, how much financial aid should I take out?

19. Expert Guidelines for Debt Load • No more than 10%-15%of the expected monthly income from your first job going for repayment of all loans • Over 15% means you probably won’t be able to afford car payments • 20% is the start of the "danger zone" when loan debt is out of control

20. Guidelines Using Your Monthly Gross Salary When You Graduate We Recommend - Debt Payments = 10% Nutritionist Salary = $29,347 Max to Borrow = $21,217 Elementary Teacher Salary = $33,765 Max to Borrow = $24,476 Accounting Salary = $39,062 Max to Borrow = $28,314

22. Tips for Reducing Amount Borrowed Avoid Student Bill Late Fees • Due the 12th of every month • Bill emailed on 25th of every month • Use electronic check optionCredit costs you! • NOTE: Your student DOES have to giveyou permission to access their MyRedAccount. • Use Campus ServicesUNL student fees pay for themExamples: Lied Center discounts, UPC Programming

23. Tips for Reducing Amount Borrowed • Never Stop Applying for Scholarships • UNL General Scholarship FormOn MyRED - Due February • Individual Colleges - CBA, Arts & Sciences • Private – Fastweb.com • Get a Part-Time Job with Education BenefitsSome employers, Americorps, ROTC • Lower Interest PaymentsIf you have the money, make interest payments on unsubsidized loans while you’re still in school

24. Mistakes Students Make VERY COMMON: Not Knowing How Much They’ve BorrowedEx. One student had $60,000, thought had $25,000TRACK AT: unl.edu/smmc Know Some Scholarships are Taxable • Tax Free = Tuition & fees • Taxable = Room & board, travel, research Reduce ExpensesCreating a spending plan is a great way to discover ways to free up money that can be put towards education expenses

25. Mistakes Students Make • If student receives more in student loans, grants, and scholarships than they have to pay in to UNL • Extra is deposited in the bank account you set up in MyRed • They should know it’s important to:SAVE IT! - In a savings account- Only transfer over when they need it

26. #3 UNL Freshman FAQs • Do I need to have my taxes done?

27. Tips for Students & Taxes • Discuss if You are Claiming the StudentPerson is under 19 years old or is under 24 and a full-time student AND the taxpayer provided over half of their support – You get deductions & credits • If They Are a Dependent, Still FileIf you earned more than $5,950, you must file a tax returnIf you had income tax withheld from your pay, file • Know the Current Education CreditsEx. The American Opportunity Credit is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year

28. Tips for Students & Taxes • Find on MyRedForm 1098-T - Tuition Payments StatementIncludes Proof of Scholarships & Grants and Amounts Billed • Know Textbook AmountsTextbook purchases can be applied to taxes for educational tax credits • Note: Students can get free tax help every year through UNL VITA

29. #4 UNL Freshman FAQs • But how do I know how much money I’ll need each year?

30. From Survey of Students: Per Academic Year Eating Out $400 - $3,000+ Entertainment $300 - $2,000+ Clothing/Personal Items $300 - $1,000+

31. Figuring Out How Much to Work Example Real-Life Budget: Living in a 2 Bedroom with a Roommate Rent = $325 Electricity = $50 Cable = $20 Internet = $20 Groceries = $165 Eating Out = $60 Clothing = $40 Laundry = $10 Toiletries = $40 Gas = $65 Entertainment = $50 Medical needs = $15 Renter’s insurance = $15 Car insurance = $45 Cell phone = $45 Total Cost Per Month = $965 Most students would need to work around 25 hours per week to cover this cost – with taxes taken out.

32. Personalized Spending Plans UNL Student: Leah Lives: On-CampusWeekly budget after major expenses: $ 140

33. Personalized Spending Plans UNL Student: Sarah Lives: On-CampusBudget after major expenses: No idea

34. Personalized Spending Plans By having a plan and making good choices, this week Leah spent: $ 125.93 less than Sarah. That adds up to: $ 6,044.64 per year

35. Personalized Spending Plans • Mint.com • Get organized • Track expenses – Reduce expenses • Track income – Figure out reduce/increase income • Get help saving for financial goals

36. Good Habit: Creating Financial Goals • Why develop financial goals? • Don’t Miss Out on Opportunities, such as studying abroad • Help Them Achieve Larger Life GoalsBuying a house, Buying a car, Going to graduate school • Control SpendingWithout goals, daily spending on unimportant things can keep students from achieving the really important things in life

37. Impulse Spending Tricks Think about your financial goals – Instead of spending, put money into savings Take $20 out each week and only spend that Plan for little purchases Get 2 lattes a week instead of 5 and save: $2,080 per year Get 1 well-made new shirt once a month instead of 3 cheap shirts and save: $1,300 per year

38. Emergency Fund • Dave Ramsey recommends even college students save for: • Emergency Fund (3 months living expenses, $500) • Financial Goals • By Paying Yourself First • Including savings in your budget • Automatically having funds deposited in your savings • Building good habits Dave Ramsey’s “Foundations in Personal Finance” Program for College Students Available for FREE at UNL SMMC

39. #5 UNL Freshman FAQs • What are some other things that see UNL students do to waste money?

40. Banking/Credit Union Fees • Read the Account Contract! • Some things many people don’t realize: • Overdraft fees (Ex. $35 per day for up to 4 items) • Transfer feesFees if you transfer from savings to checking too often • ATM feesFees for using another bank’s ATM • International transactions (usually around 3%)

41. Not Having Adequate Insurance Renter’s Insurance • Ask your insurance agent if your family’s current homeowners or renters insurance policy also protects belongings in the dorm • Most policies limit a student’s coverage to 10% of the family’s coverage • For example, if your family’s policy has a personal property limit of $300,000, student belongings will be covered up to $30,000, after the deductible • In most cases, buying separate renters insurance is less expensive than increasing the coverage limits on your family’s homeowners insuranceAverage = $150 per year

42. Car Expenses Think About Cost of Car on Campus Parking $396 Oil changes $120 Gas $720 Insurance $600 Registration $150 TOTAL = $1,986 Bus = FREE Rent Zip Cars = $75 membership fee $7 per hour Locksmiths = $200 Towing = $200 Solution = Triple AAA Primary - $60 Family - $14

43. Becoming a Victim to Identity Theft Basic Tips: • Copy the front & back of all credit and debit cards and keep the copies in a safe locationThis enables you to cancel the card ASAP • Keep credit/debit card receipts in a safe place - If any transactions are in question, call the card issuer • Call it in ASAPCredit Card - $50Debit Card - $500

44. Moving Off Campus Without Research • These are estimates. Actual figures will vary from student to student. • Initial costs = $840 (with roommate, no furniture costs)

45. Rentping.com

46. Affordable, Quality Housing Goal = $ 350 • Will need a roommate • Stay within 5 miles from campus

47. #5 UNL Freshman FAQs • Do I need a credit card?

48. Should Students Have Credit Cards? Not Necessarily! • If they want to have it in case of emergencies(However, a cash emergency fund can work) • If they understand the importance of credit scores • If they want to start building a credit scoreEx: If they want a mortgage or car loan when they’re a Junior or Senior Experts say: Better to have no credit than to come away from college with a ruined credit score!

49. Should Students Have Credit Cards? Do you need a credit card? If You Want a Credit Score Predicts the risk that you will not pay your credit obligations - Loans, credit cards, rent, etc.Note: Many students wait till they are Sophomores 740 To get your dream job Many employers check credit scores to determine if you’re responsible To borrow money from banks or credit unions for auto loans, business loans To rent an apartment without having a cosigner

50. Should Students Have Credit Cards? Most Important: Understand their credit management habits will affect their credit score & their financial future People with low credit scores will pay more for: • Health/Dental/Vision Insurance • Car loans • Car insurance • Mortgages • Rent Low credit scores can prevent you from: • Getting an apartment • In some cases, getting a job