Download - FYE: Financial Literacy Content Created by Boston University Financial Assistance Fall 2015
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Undecided?
Think about your interests, but don’t be afraid to take a class that is outside of your comfort zone You may really enjoy it!
Think about a double major or a minor Be active in extracurricular activities Having varied interests and being
knowledgeable about different subjects will make you more marketable
What will my salary be?
Bachelor’s Degree Candidates Average Salary*
Humanities 45,042
Social Sciences 49,047
Communications 49,395
Healthcare 50,839
Business 51,508
Math & Sciences 56,171
Computer Science 61,287
Engineering 62,998
*Averages provided by the National Association of Colleges and Employers, Salary Survey January 2015
Find average salaries by BU school/college in the Center for Career Development’s Post-Graduation First Destination Profile
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What will my paycheck look like?$51,174 ÷ 12 months = $4,265
Gross Salary 4,265
Federal Tax 668
FICA (social security) 265
Medicare 62
State Tax 203
Health Insurance 168
Dental Insurance 10
Net Salary 2,889
*Numbers will vary based on personal circumstance. This example is of a single person living in Massachusetts w/no additional deductions. www.paycheckcity.com
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Monthly Budget Think about what your fixed and variable
expenses are each month Fixed Expenses: Rent, Utilities (heat, electric, etc., which may be
variable depending on the season), Car Payment, Cell phone, Communication (internet, TV), Federal Student Loans, & Private Educational Loans
Variable Expenses: Food, Transportation, Credit Cards, Clothing, Laundry, Entertainment, Personal/Miscellaneous, Savings
Irregular Expenses: Gifts, Haircut, Oil Change
Don’t spend more than you make! You may need a second job, or a roommate to make your budget work
Don’t buy stuff you can’t afford! http://www.youtube.com/watch?v=gc-eqqiDKD8
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Weekly Student Spending*Day Item Amount Category
Monday Starbuck's- coffee $3 Food-on campus
Domino's- pizza $12 Food-on campus
Tuesday Starbuck's- coffee $3 Food-on campus
City Convenience- toothpaste $4 Personal Care
Late Night food $7 Food-on campus
Wednesday Starbuck's- coffee $3 Food-on campus
Laundry $5 Laundry
Late Night food $4 Food-on campus
Thursday Starbuck's- coffee $3 Food-on campus
Birthday present/card for friend $20 Gifts
City Convenience- gum $2 Food-on campus
Friday Starbuck's- coffee $3 Food-on campus
Noodle Street $11 Food-off campus
T pass to & from Aquarium $4 Transportation
Aquarium $21 Entertainment
Saturday Starbuck's- coffee $3 Food-on campus
Shopping- Newbury Street (earrings) $12 Clothing/accessories
T pass to & from movie and shopping $8 Transportation
Movie with BU ID $6 Entertainment
Frat party $5 Entertainment
Sunday CVS- index cards $3 Supplies
Late Night food $10 Food-on campus
Weekly Spending Total: $152
*meal plans are not included
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Where Did The Money Go?Weekly Spending
Food-On CampusFood-Off CampusEntertainmentTransportationClothing/AccessoriesGiftsSuppliesPersonal Care/Laundry
35%
7%
21%
8%
8%
13%
2%6%
63%
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Accumulating Debt
Know what you owe! Check your credit card statements each month Keep information about student loans that you take each
year Debt you accumulate today can have an impact on
your life in the future
“If you live like a doctor when you’re a student, you’ll live like a student when you’re a doctor.”
~Unknown
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Interest
A charge for borrowed money, generally a percentage of the amount borrowed
You bought an iPad for $600 and put it on your credit card with 23% interest Your minimum payment is $18 The interest accrued that first month is
approximately $12 How much will that iPad really cost you?
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Payment Options
Pay the minimum of $18 only It will take 72 months (6 years) You will pay $496 in interest
Pay the minimum $18 + interest $12 = $30 It will take 26 months (more than 2 years) You will pay $164 in interest
What about $50 per month? It will take 14 months You will pay $89 in interest
What if your interest rate was less than 23%?*Calculators used from www.bankrate.com
$1,096
$764
$689
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Credit Report
A Credit Report is a detailed report of your credit history. Detailed information regarding a person’s credit history
(i.e. credit card accounts, loans, & payment history) Used by lenders and others to determine an applicant’s credit
worthiness Contains employment history data and address information
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Credit Reporting Agencies
Access your credit report for FREE from annualcreditreport.com
National Consumer Reporting Agencies: Experian: experian.com Equifax: equifax.com TransUnion LLC: transunion.com
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Credit Score A numerical rating used as an indicator of a borrower’s credit worthiness Method was developed by Fair Issac Corporation (FICO®). The standard method for calculating the score involves a number of
weighted factors*: 35% Payment History 30% Amounts Owed 15% Length of History 10% New Credit 10% Account Mix
A FICO® score ranges from approximately 300 to 850. Purchase your score at myFICO.com Obtain an estimate at myFICO.com/FICOCreditScoreEstimator/Estimator.aspx
OR
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Negative Information
Late payment history and other negative information generally remains on your credit report for 7-10 years
An account with a late payment history may be turned over to a Collection Agency by the merchant
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Tips on Maintaining Good Credit
Pay bills on time Pay down high balances, don’t just pay the minimum (if you can)
Reduce your overall debt-to-credit limit ratio Only request a credit limit that you need Monitor your savings/checking accounts Don’t open or close accounts excessively
Be careful about closing zero balance accounts (this will impact your debt-to-credit ratio), or accounts that are old (this will impact your credit history)
Never share personal data unless you initiated the contact Reputable companies will never ask for your password in an email (so don’t
provide it, under any circumstance) Check your credit report on an annual basis and report discrepancies;
mistakes can be made Only use credit for purchases with a lasting value (i.e. education, home,
car, major appliance, etc.) Minimize opening new accounts
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Savings and Retirement
Always pay yourself first! Set short-term and long-term goals Have an emergency fund Think about retirement savings early, at
least when you get your first job
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Key Points for Students to Remember
Make a Budget Look at what you’re spending and see where you can make
adjustments Educational Loans
Only borrow what is necessary Build Credit Now
Always pay bills on time If you have credit cards, pay off the highest interest rates first Monitor your credit report
Save for the Future Whether its spring break or designer jeans, curb credit card
spending
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Still Have Questions?
Check out the $mart Money 101 website bu.edu/smartmoney101/ Follow us on Twitter @BUsmartmoney101
Sign up for Cash Course through the Financial
Assistance website Book a presentation for your group Set up a 1-on-1 meeting through the Financial
Assistance Office Look at course offerings