Connect with us

Digm Piece (Op-Ed)

Money Rules for Back to School

Published

on

Photo credit iStock by Getty Images

Now that you’re settling in for the new term, it’s a great time to review your cash flow and make a plan to get through the semester on a full tank. Here are some tips for a smooth ride!

Review your financial aid package

Make sure you understand the difference between grants, which you don’t have to pay back, and loans, which you DO have to pay back—even if you don’t complete your degree. Make sure you are borrowing only what you need to cover tuition, fees and essential living expenses.

Figure out your income for the semester

Add up your summer earnings and any grant, scholarship and/or student loan funds you may receive as a refund after your required tuition and fee bill has been paid. If you will be working during the semester, multiply your estimated take-home pay for each month by the number of months in the semester (e.g., September through December = 4) and add that amount to your previous total—that’s what you have to live on for the semester. It may seem like a lot of money, but it will go quickly if you’re not careful with your spendingHere’s a tip: To make your summer earnings last for the entire school year, divide them by two and set one half aside.

Develop a spending plan

The very idea of budgeting probably makes your eyes glaze over, but it is one of the most important exercises you can undertake to put yourself on a solid financial footing. Creating a simple monthly plan will let you see where your money goes—monthly bills such as rent, car insurance, internet or cell phone — and how much you may have left over for miscellaneous expenses such as food and entertainment.

Use a budget worksheet to make the process easier, and be sure to check it often during the semester and make adjustments as needed. If you’re not sure how you have been spending your money, go through your bank statements, bills and other receipts for the last three to four months and tally up the totals in each category (restaurants, entertainment, coffee, bills, etc.). You’ll be amazed at some of things you’re spending money on and how quickly small amounts add up!

Plug the leaks

As you review your expenses, identify those things that you really could have done without. Ask yourself questions such as:

  •  What do I spend money on that I don’t really need?
  • Are there ways to reduce my fixed expenses, such as rent or cell phone charges?
  • Can I reduce the amount I spend on groceries without sacrificing good nutrition?

This will help you understand your priorities and clarify needs versus wants.

Set aside funds for emergencies

You never know when life is going to get in the way, so it’s important to have some funds on tap for an emergency. Unexpected expenses such as home or car repair can easily crop up, and the last thing you want to do is rely on credit cards or additional loans to bail you out. While most financial planners recommend an amount equal to three to six months of your living expenses, this may not be realistic for most college students. The key is to start small. If you’re receiving a financial aid refund, for example, plan to set aside a few hundred dollars and make a pledge not to spend it.

Be careful with credit!

If you have a credit card (or several), only charge what you know you can pay off each month. If you are commuting to school and charging your gas, for example, make sure you include the estimated cost in your budget so you have enough each month to pay off the total bill and avoid interest charges. Whenever possible, avoid making large purchases—such as a new computer or TV—with credit. Instead, set aside money until you have enough to pay cash.

Remember, it’s about finding the right balance between what you want and what you can reasonably afford. Every small sacrifice will help develop good money habits and pay off big time in the long run!

 

 

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

Digm Piece (Op-Ed)

Top Ten Freshman Money Myths

Published

on

Photo credit iStock by Getty Images

Starting college is one of the most important and exciting times of your life. Now that you’re all “checked-in,” enjoy your college experience without worrying about where your next meal will come from by chasing away these common freshman money myths. (more…)

Continue Reading

Digm Piece (Op-Ed)

Do What You Love for Free – Here’s Why

Published

on

This is ParadigmMoney.Com, right? So, speaking about a paradigm shift should come as no surprise. In science and philosophy, a paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. When speaking about money, most believe it is something you work for and not something that works for you. In all truth, the one percenters understand this concept quite well. In order, to wake up and do what you love, you too must shift your thoughts when it comes to finances.

Doing what you love for free allows you to create freely. You can come up with disruptive, out of this world, never seen before creations that will rock this planet. Take Elon Musk from South Africa, founder of X.com which went on to become PayPal and sold to eBay for 1.5 billion dollars. Musk is also the CEO of SpaceX which designs, manufactures and launches advanced rockets and spacecraft. The company was founded to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. You may say, of course, he can do this, he is a billionaire and co-founder of Tesla.

Not true. PayPal, Tesla, and SpaceX are all products of Musk doing what he loved. As a child, he was an avid reader and taught himself computer programming leading to the creation of X.com. He dropped out of college to start a company with his brother and here’s what he had to say about that PayPal deal… “My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.” Elon Musk’s current net worth is estimated to be at about $13.3 billion. No bad at all.

The reality of the matter is the less you are attached to money the more money flows to you. Pay more attention to creating things that move the culture forward. Starting at doing what you love with ultimately position you for financial success and happiness.

Continue Reading

Digm Piece (Op-Ed)

How Much Does College Cost?

Published

on

Photo credit iStock by Getty Images

How much does college cost these days? If you’re preparing to go to college and will need to find a way to finance your own education, this is one of the first steps to figure out.  Then you’ll want to find out all of your options and create a plan. Here’s a quick breakdown on the typical cost of college. (more…)

Continue Reading

Trending