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Student Financial Aid

Personal Budgeting

A budget is a tool that helps you prioritize your spending and properly manage your money. The goal of a budget is to minimize expenses and maximize savings. It can help you identify wasteful expenditures, adapt quickly as your financial situation changes, and achieve your financial goals. By cutting down on unnecessary spending and increasing your monthly savings, you can put extra money toward important long-term financial goals. 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.

Budgeting Tips

  • Have accurate data to identify how you are spending your money.
  • Be realistic.
  • Identify sources of income (e.g., jobs, scholarships, financial aid).
  • Determine fixed and variable costs.
    • Fixed costs are a definite amount and usually do not change overtime (e.g., rent, car payment).
    • Variable costs represent changing and often unpredictable amounts (e.g., groceries, fuel).
  • Distinguish between necessities and wants.
  • Ensure that you do not spend more than what you make.
  • Set goals.

Strategies to Decrease Spending

  • Make a shopping list and purchase only what you need to prevent impulse buying.
  • Use coupons.
  • Buy in bulk.
  • Open a checking account to enable direct deposit and avoid check cashing fees.
  • Take your breakfast and/or lunch to work instead of eating out.
  • Shop around for the best deals, especially when making big purchases.
  • Control or limit the use of credit cards.
  • Pay bills on time so that you can avoid late fees.
  • Take advantage of student discounts.

students eat ice cream outside of 55 exchange

Additional Budgeting Resources

Types of Saving Accounts

Basic Savings Account

A deposit account that allows consumers to earn interest. Features include:

  • Access your money at any time.
  • Earn interest.
  • Pay no fees if you maintain a minimum balance.
  • Move money easily from one account to another.
  • No check writing services.

Money Market Account

Like a savings account but offers a higher rate of return and requires a higher minimum balance. Features include:

  • Access your money at any time.
  • Earn interest.
  • Pay no fees if you maintain a minimum balance.
  • Move money easily from one account to another.
  • May offer check writing services.

Certificate of Deposit

Interest bearing certificate issued by a bank that requires a minimum dollar amount to open the account and remains in the bank for a fixed period. Features include:

  • Earn interest during selected term (one month to 10 years).
  • Must leave the deposit in the account for the entire term or incur an early withdrawal penalty.
  • Receive the principal and interest at the end of the term.
  • No check writing services.

Factors to Consider when choosing a savings account

To determine the savings option that best fits your needs, consider the following:

  • Is there a minimum deposit required to open the account? If so, how much?
  • Is there a minimum monthly balance to maintain? If so, how much?
  • What is the interest rate?
  • How frequently is the interest compounded?
    • The more frequent the compounding, the better the return on your savings.
  • Can funds be withdrawn without penalty or loss of interest?
  • What fees apply to the account?

Emergency Fund 

The purpose of an emergency fund is to provide financial security by creating a safety net that can be used to pay emergency expenses. A fully funded emergency fund is three to six months of your personal expenses set aside in a basic savings account, money market account or certificate of deposit. If setting aside three to six months of your expenses sounds overwhelming, start small and build your way up. Ask yourself how much you need to have tucked away to feel secure and make that the amount that you save in your emergency fund. $500 is a good place to start.