Building Financial Success

A budget provides a clear picture of the money you have coming in and the money you expect to spend. It helps you evaluate your spending habits, identify savings goals and determine how much flexibility you have to adjust your spending and live within your means.

Estimate Your Living Expenses

Before creating a budget, estimate your costs for housing, food, transportation, books and personal expenses. Be sure to account for everyday spending and unexpected costs to help you make informed financial decisions.

Create a Simple Budget

A budget helps you compare your income and expenses so you can make informed spending decisions and stay on track financially.

• Choose a budgeting period, such as a week, month or semester.
• List your expected income sources.
• Record your estimated expenses.
• Subtract expenses from income and aim for a positive balance.
• Adjust your spending as needed to stay within your budget.

Loans can be a great resource to help pay your education expenses, but they can also cause financial stress later in life if you do not practice responsible borrowing. Sensible use of debt can be part of a sound financial strategy. Keep these considerations in mind as you evaluate borrowing options.

• Borrow only what you need.
• Borrow for things that will provide long-term value.
• Keep track of how much you have borrowed.
• Make sure you can afford the require payments.
• Know how interest and repayment will affect your future goals.

Learn about student loans

Credit refers to your ability to borrow money and repay it over time. Your credit history and credit score can affect your ability to qualify for loans, rent an apartment and receive favorable interest rates.

Types of Credit

• Installment credit: A fixed amount borrowed and repaid over a set period. Examples include student loans, auto loans and mortgages.
• Revolving credit: Credit that can be used repeatedly up to a set limit. Credit cards are the most common example.

Credit Reports

A credit report summarizes your credit activity, including account history, payment history and credit inquiries. The three national credit reporting agencies are Experian, TransUnion and Equifax.

• These reports will typically include personal information you have shared with lenders, a summary of your credit accounts, past credit inquiries, collection accounts resulting from unpaid debts and any public records related to your credit. You can access free copies of your credit reports at AnnualCreditReport.com.

Establishing Good Credit

Your credit score is influenced by several factors, including payment history, outstanding balances, length of credit history and applications for new credit. To build and maintain good credit:

• Pay bills and loans on time.
• Keep credit card balances low.
• Maintain accounts responsibly over time.
• Apply only for the credit you need.
• Review your credit reports regularly for accuracy.

A strong credit history can help you qualify for better loan terms and lower borrowing costs.

Here are some things to consider as you plan for your financial future after graduation.

Student Loan Repayment

• Know Your Loans: Review your interest rates, determine whether they are fixed or adjustable and understand your available repayment options. This information can be found at StudentAid.gov.
• Evaluate Repayment Plans: Explore the available repayment plans and identify the option that best fits your circumstances.
• Consider Refinancing: Before refinancing, understand how doing so could affect your eligibility for federal loan benefits and repayment programs.

Set Financial Goals

• Build Your Emergency Fund: Plan to save at least 3-6 months of living expenses within the first couple of years after graduation. Keep these funds in an easily accessible account and use only for emergencies. Prioritize replacing the funds when used.
• Pay Down Debt: Commit to pay more than the minimum payment on any high-interest debt like credit cards or private student loans. Learn about strategies like the debt snowball or debt avalanche through a Financial Success workshop.
• Plan for Retirement: Begin saving for retirement once you begin earning a paycheck. Due to compounding interest, time is your greatest asset when saving for the future. Always try to meet your employer’s retirement contribution match to maximize available employer contributions.
• Save for Discretionary Spending: Think about your lifestyle goals and begin saving for large upcoming purchases such as a car, house, wedding, children, or recreational spending such as a vacation.

Through one-on-one counseling, peer appointments and presentations, Financial Success can give you the tools and resources you need to make healthy financial decisions during your academic career and beyond graduation.

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Interested in a Financial Success presentation for your class or campus organization? Our team is happy to share core financial success information with you.

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Learn more about budgeting, debt and financial planning at your own pace through the Financial Success Digital Library.

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