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.