Budgeting

Good evening,

As many of you are starting to have your first part time jobs, It is important to learn how to budget. Budgeting is basically a plan for your future income and expenses. You use this plan as a guideline for spending and saving. There are simple steps on how to budget:

1. Add Up Your Income
2. Estimate Your Expenses
3. Find Out the Differences

If you are currently working part time you have a close estimate of how much money you earn per paycheck. Then you need to figure out your expenses. This can include gas, car insurance, and etc. Once you found the difference, hopefully, you have more income than expenses. You can figure out how much money you have for miscellaneous for going out, video games, and etc. You usually have a set budget every month, but at times it will change. For instance, if you are planning on purchasing Christmas presents next month, you need to budget that in. You can create your budget on Excel, websites, such as Mint.com, or even by hand with a pen and paper.

Learning how to budget is extremely important. It is a skill you will be using for the rest of your life. Something I do suggest is if you have leftover income you should deposit that into a savings account. This allows you to save for a rainy day. For instance, it allows you to pay for something you did not budget for initially.

Example of a 6-month Budget Plan

Works Cited

Folger, J. (2013, April 30). Teaching Financial Literacy To Teens: Budgeting | Investopedia. Retrieved November 19, 2015, from http://www.investopedia.com/university/teaching-financial-literacy-teens/teaching-financial-literacy-teens-budgeting.asp

Federal Student Loans

Good evening,

As many of you start your college application process, you will need to consider applying for FAFSA along with federal student loans. FAFA stands for Free Application for Federal Student Aid. You must submit the application in order to receive student aid for college. When applying you will need the following:

1. Your SSN
2. Parent(s) SSN
3. Driver's License Number
4. Personal Savings and Investment Account information of yours and your parents. 

The earliest you can apply for FAFSA is January 1st for the year you are attending college. I suggest applying on January 1st if you can.  You can fill out as much as you can and correct it later. This is because the student aid does run out. You want to make sure to apply right away in order to receive it. 

Federal student aid includes:

1. Grants financial aid that does not have to be repaid.
2. Loans-borrowed money that you must repay.
3. Work-study- a work program through which you can earn money to help pay for school.

There are three different types of federal student loans and a lot of students and even parents get this confused.

Direct Subsidized Loans

Subsidized loans are for students with demonstrated financial need, as determined by federal regulation. You will have to pay back the loan, but it does not charge you while you are attending school at least part-time. 

Direct Unsubsidized Loans

This loan is not based on financial need. Your school will determine the amount you can borrow based on your tuition, This loan does charge interest even when you are in school.

Direct PLUS Loans

This loan is unsubsidized. The parents of dependent students are able to take out this loan. 

Here is a link to a video further explaining the different types of federal student aid.

Works Cited:

Federal Student Loans. (n.d.). Retrieved November 18, 2015, from https://www.salliemae.com/plan-for-college/types-of-student-loans/federal-student-loans/

What Is the Importance of Having a Good Credit Score

Good evening,

Last week I discussed what exactly is a credit score and how to check it. I did not explain the importance maintaining a good credit score.Your credit score is based on your credit report. Your credit report is a record of your credit history from banks, credit card companies, collection agencies, and governments. Here are five important things to know about your credit score:

1. Your credit score determines the cost of future purchases. 
2. It takes a long time to improve your credit score once it drops.
3.  It is almost impossible to put a bad credit score behind you. 
1. There are set years on how long things stay on your credit report.
4. It influences what car you are going to drive and the place you will live in.
5. The amount of money you owe, your payment history, the length of credit history, credit mix, and new credit all affect your credit score. 

FICO Credit Score Graph in Comic Form

Lenders will look at your credit score when they are figuring out how to price the products they are selling you. If you are purchasing a car, you will most likely need to apply for a car loan. The bank will figure out how much of an interest rate they will charge you. The higher the rate, the bigger of a risk you are. Therefore, in the long long, maintaining a good credit score will save you thousands of dollars.

Works Cited

Konsko, L. (2014, October 13). 5 Reasons Your Credit Score Is More Important Than Your GPA. Retrieved November 3, 2015



Weliver, D. (2011, January 25). What is a Credit Score? Understand and Improve Your Credit. Retrieved November 3, 2015.

What Is a Credit Score and How Do You Check It?

Good evening students,

I am sure you all heard about the important about having a good credit score. But exactly is a credit score? According to bankrate.com, your credit score is a three-digit number generated by a mathematical algorithm using information in your credit report (What is a credit score?). Basically, it is designed to predict risk. Your credit score is very important because it can, and will, mean the difference between denied or approved for credit. Companies look at your credit score to qualify for an apartment, buy a car, get a mortgage on a house, open a credit card, etc.

There are two types of credit checks. They are hard and soft credit checks. The hard credit check is used when consumers apply for a credit card, auto loan, mortgage or basically any other loan. It slightly lowers your credit score, and it will stay on your credit report for about two years. It is not a good idea to constantly getting a hard credit check because you want a higher score. The soft credit check is when you personally check or a company checks your credit report as a background check. Soft credit checks do not lower your credit score (Lee 2014).

Most companies use FICO to pull a soft or hard credit check. FICO scores range from 300 to 850. Basically, the lower the FICO score, the more at risk you are.

Elements of Your Credit Score

Here is a video explaining how to check your credit score.

Works Cited

Lee, J. (2014, July 24). The Difference Between Hard and Soft Credit Inquiries. Retrieved October 29, 2015
What is a credit score? (2010, April 22). Retrieved October 29, 2015, from http://www.bankrate.com/finance/credit-cards/what-is-a-credit-score.aspx

Balancing Your Checkbook

Good evening students,

Almost everyone has a checking account. If you bank online it is still important to learn how to balance your checkbook. It is easy and it only takes couple minutes every month. It teaches you good money habits in the long run. Balancing your checkbook means writing down every transaction as it occurs. Make sure to include any fees, such as, ATM fees. You record these transactions in your check register. You will know current bank account balance. This was helpful before online banking. I can already hear you saying,"What is the point of this when I can check my balance instantaneously?" The reason is banks make mistakes. This is a known fact. You want to make sure your register matches your monthly bank statement. If it does not, you can either go to the bank or reconcile it online.

Example of what balancing a checkbook looks like.

Five steps to a balanced account

1.  Enter all transactions into your checkbook register each day.
2. Review your account statement as soon as it arrives. Compare the monthly statement to your checkbook register, and place a check mark next to all of the items that match.
3. Adjust your checkbook register if necessary. 
1. Add or subtract items on your register that appear on your statement but were overlooked when filling in your register.
4. If you find errors, double-check everything.
5. You are done when your register balance matches your bank statement. 

Best of luck,

Zahra

Work Cited 

Balancing and Budgeting — Balancing Your Checkbook. (n.d.). Retrieved October 13, 2015, from http://www.capitalone.com/financial-education/money-basics/balancing-budget/balance-your-checkbook

How to Write a Check

Good Afternoon Students,

Some students were asking me how economics applies to their everyday life. When a person goes online to check their balance for their checking account, writes a check, buys and sells stocks/bonds, file for taxes, makes purchases, buys a car, and etc,. It all relates to economics. A person even performs what is called "cost-benefit analysis" when deciding who they want to marry and if they want kids. "Cost-benefit analysis" simply means the pros are weighed against the cons. That being said, economics is everywhere. Writing a check is a simple concept but not many people of this generation knows how to fill one out. It is an important life skill that everyone needs to know. Below are six simple steps on to write a check with six easy steps. 

An example of a check.

1. Write the date on the top right hand corner that says date.
2. Write the name of who you are making the check to on the "pay to" line. This can either be a person or a company. *If it is to an individual, put the first and last name*
3. Write the amount of the check to the right below the date on the dollar sign line. You need to write the exact about using dollars and cents. 
4. On the "pay to the order of" line write the monetary amount of the check in actual work form. 
5. Sign the check on the bottom right corner that is labeled "MP".
6. Fill out the memo section on the bottom left. This part is optional but beneficial. It is a memo to yourself. It can also be a place where you write your account number. 

**Things to remember**

• On the bottom on your check there are several numbers. The set furthest to the left is your routing number. The middle set is your account number (to your checking account). The right set of numbers is the check number. 

Hopefully after reading this blog you will be successful with writing your first check.

Best of luck,

Zahra

Work Cited

Checking Account Basics. (n.d.). Retrieved September 18, 2015. 

Why No One Knows How to Write a Check Anymore. (2015, June 15). Retrieved September 18, 2015, from http://money.usnews.com/money/blogs/my-money/2015/06/11/why-no-one-knows-how-to-write-a-check-anymore