Archive | September, 2013

Understand Your Financial Situation Long Before You Graduate

15 Sep

Wise students should take a close look at their financial situation long  before they graduate. It is important for them to know their situation, so they  can gradually establish or improve their credit history. College Freshmen,  Sophomores and Juniors should have a good understanding of how their finances  and credit records will affect their plans, while they still have time to do  something about them.

1. Credit Cards – When used properly, credit cards are a good  way for you to ensure that you will be viewed as a good credit risk by  landlords, utilities, banks, phone companies, internet providers, car dealers,  furniture stores and other creditors you may need.

To build a good credit record:

a. Buy only things you can afford. When you purchase things you cannot  afford, the amount you owe will become part of your record. Unpaid bills will  ruin your credit.

b. Pay your bills on time. Late payments become part of your record and  adversely affect your credit rating. Fees for late payments are wasted money  that you cannot afford to lose.

c. Try to pay your bills in full. That will reduce or eliminate the amount of  interest you will be charged and also establish your credit worthiness. If you  have a balance from the previous month, pay the current month’s amount plus a  portion of the previous balance. Over several months, you can eliminate the  balance.

Responsible credit card usage is necessary, if you hope to rent, purchase or  utilize the goods and services that help us enjoy life. Without a stable credit  history, you will be forced to use cash for everything or do without.

2. Credit Reports – Credit reports and credit scores tell  others if you are a good credit risk. Go to and obtain  copies of your credit reports from TransUnion, Experian and Equifax. Since each  credit report can be quite different, check all three carefully. If you spot  errors in your credit reports, follow each credit agency’s dispute resolution  process to get the errors corrected. Remember, you are seeing what landlords,  employers and creditors will see. You must show them that you are a responsible  person and good credit risk.

3. Checking Account – If you do not have one already, you will  need a checking account. That is how you will pay your rent, utility bill,  internet provider, phone bill, student loan payments and credit card bill, etc.  In most cases, bills can be paid by either paper check or electronic  transfer.

You should also know that many employers now pay employees with a direct  deposit to your account, no check. Also, in most cases you can have your bank  transfer money from your checking account into your savings account on a regular  schedule. That makes saving easier for you.

4. Personal Savings – It is important for you to understand  that you will need money when you graduate. Rent, Security Deposits, Groceries,  Furnishings, Clothing, Transportation and many other things will pop up  immediately. The more money you have already put away in savings, the easier  your new life will be.

5. Student Loans – Do you know how much you have borrowed? What  monthly payment will be required, for how many years? Can you negotiate a lower  interest rate or a longer or shorter pay back period? These are things that  should be understood before graduation.

If you have graduated with no job, you may want to investigate a temporary  loan deferral.

6. A Realistic Budget – Develop a budget that includes all of  the expenses you will encounter when you graduate. You need to know what  expenses you will face. Include things like Rent, Food, Utilities, Clothing,  Transportation, Loan Payments, Electronics, Leisure Activities and Savings for  emergencies.

Wise students also develop and austerity budget and a living at home budget.  These three budgets should give you a good idea of your options.

7. Avoid Identity Theft – Tighten up your behavior and your way  of thinking. Everything you do now or in the future will be adversely affected  if your identity is stolen. You must be careful to protect your confidential  information, at all times.

Never give out your social security number, credit card numbers, security  codes, bank account numbers, pin numbers or even your birth date, unless you  know the person and why they need that information.

Your first reaction should always be not to give that information to anyone  until you are absolutely certain about them and their purpose. Otherwise, your  accounts can be drained and your credit cards can be maxed out. Since crooks may  even commit more serious crimes using your identity, your best protection is you  and the actions you take to protect your information.

Every single day, someone is thinking of new ways to obtain the personal and  confidential information that can ruin your finances and your life. You must  avoid these scammers.

– Never click on “E-mailed Links”, even from people you know – Never  click on “A Chance To WIN” or “Enter to WIN” – Never click on “Package  Delivery Failures – Never click on “Your Order For Tickets” – Never  click on claims that “You Overpaid” someone – Never respond to requests to  “Deposit Money Into Your Account” – Never respond to requests from “Your  Bank, Microsoft or Credit Card Company” – Never respond to e-mail messages  from “the IRS.” They don’t e-mail taxpayers. – Never click on “You Are  Pre-Approved” solicitations – Never click on or participate in “Surveys”  – Never click on claims that “You Have WON” – Never click on claims that  “Your Account Has Been Compromised”

These scammers, and many others, are simply trying to obtain information they  can use to drain your bank account and steal your identity. You must protect  yourself by being skeptical about all phone calls and e-mail or electronic  messages.

Knowing your financial situation and protecting yourself in these seven areas  will help put you in a position to make the best decisions about your future.  Use that information to prevent problems and position yourself for greater  financial, career and personal success.

Bob Roth, a former campus recruiter, is the author of four books: The College  Student’s Companion, College Success: Advice for Parents of High School and  College Students, The College Student’s Guide To Landing A Great Job -and- The 4  Realities Of Success During and After College. Known as The “College &  Career Success” Coach, Bob writes articles for College Career Services Offices,  Campus Newspapers, Parent Associations and Employment Web Sites. Bob has created  The Job Identification Machine™, a system that colleges use to identify  thousands of employment opportunities for students. He has been interviewed on  numerous radio programs across the country and by many publications, including  U.S. News & World Report and The Wall Street Journal. Bob’s Blog-