The important financial lessons you didn’t learn.

The Guide to Living Life RichCollege Edition

The important financial lessons you didn’t learn in college.

Introduction

Core Beliefs✓ Wealth is defined by how much you’ve saved not how much you spend.✓ Life is about experiences not accumulation of material possessions.

✓ How money is used is more important than how much more you can make.✓ Seek knowledge and ask questions.

✓ Share information, resources and tools with others.

A Note from Jason Vitug, Founder at PhroogalThe goal with our very first College Guide to Living Life Rich is to help college students understand the importance of financial education to live richer lives.

Money is a part of everyday life and it can be quite confusing. My first experience with money involved student loans and

credit cards.

I remember telling myself, “This is what it means to be an adult. I get to borrow money.”

The lack of financial knowledge led to some bad decisions that kept me in a cycle of debt. At one point, I had $80,000 of student loans and credit card debt. I was living way beyond my means.

An alarm bell went off after being denied a job because of my credit report. I realized I needed to get my financial life in order. However, finding information online proved to be quite difficult.

This guide will introduce you to information and tools that are necessary to help you live the life you dream of sooner.

If that question doesn’t make you at least a little nervous, you must have been one of those students who aced all your econ and personal finance classes. Or, what’s probably closer to the truth is that you just haven’t given it that much thought.

After all, trying to figure out your finances when you don’t have any finances to begin with seems like a pointless endeavor, right? Well, actually, no. Nuh-uh. Not at all. Starting a game plan now puts you in charge of your future millions (really, millions!), while ignoring your financial future can have some pretty serious ramifications that will plague you for decades.

Don’t believe us? Just look at how the Millennials that came before you are faring.

Carissa UhlmanVice President of Student Success, Inceptia

Why Financial Education

“What will my finances look like after I finish school?”

NOW how are you feeling about that finance question?If you’re beginning to sweat, that’s good. That means you’re not too keen on living with your parents well into your thirties, and want to do something about it.

Sources: 2013 Wells Fargo Millennial Survey,FINRA’s Financial Capabilities of Young Adults, College Smart Radio

Here are some action items to help you affect that change while you’re in school – as in NOW.

These brief suggestions are just a warm up. There are many more actions you can take to reach money guru status and lucky for you, there are an abundance of financial education resources that are available to you as a student.

From your school, to your lender, to your local bank, to a slew of websites and apps, the tools are at your fingertips. Use them.

Learn from the cautionary tales of elder Millennials. Take action now. Nobody is ever going to care about your wallet as much as you; you might as well get used to being your own best personal banker.

Provided by Christian DeHoyos, SaveUp

Organizing Your Finances With a Budget

A budget is the single most important tool in your arsenal for saving money. It is very difficult to make predictions about where you will be spending your money if you don’t make some kind of a rough budget.

In a nutshell, a budget is a chart or list of all the money coming into your home and all the money scheduled to go back out.

Start with the facts that you know. If you make a set amount of money every week,

add the paychecks and dates you expect them. If income is more of a variable, estimate using reasonable, slightly lower numbers that you actually expect.

Next, write out the bills you know you will have to pay. Items that are unchanging every month are your fixed expenses. Mortgage, student or auto loan payments are like this. There is no wayto work on bringing down their cost every month; they simply cost what they cost. All of the other money you will spend this month is in your “unfixed expenses.”

Capturing all this information in one space is important, but the “unfixed” expenses are the best places to find room for saving money. Unfixed expenses are things like grocery shopping, money budgeted for fun things, or gas in your car tosome extent. These expenses are important, but by watching sales cycles and living frugally, you can spend less and less in thesecategories.

After plotting the budget and maximizing savings with unfixed expenses, you may be surprised just exactly how much money you have coming into your home that you don’t really need at the moment.

Learn more:Why should I budget?How can I start a budget?What tools can I use to help me budget?What is SaveUp?

Personal Finance The Basics of Banking, Budgeting, Credit Reports and Scores

Jason VitugFounder and CEO, Phroogal

8 Things You Wish You’ve Done at 21

If only I had the technology to talk to my 21-year-old self and steer him toward the right financial path sooner. I’d have more money saved and would have faced less financial stress. The reality is that I can’t speak to my 21-year-old self but I can share my knowledge to those of you about to go through it.

After graduation, you’re excited to start your career, get your own place, buy a new car and start building your life. The life you dreamt having once you were out of school and making real money.

When you get your first “real” job you’ll feel accomplished because of your steady income. A big contrast from the campus or retail job you held while at school.

If you’re anything like me, you want to reward yourself for 4 or maybe 5 years of hard work. Your paycheck is used to spend on all the things you couldn’t afford back then. Saving money is something old people do because the future is long road ahead.

1. Start saving now. Make it a priority to save as much as you can. Live way below your means. It’s so much easier to upgrade your lifestyle then to downgrade. Ingrain the savings habit early on in your career. Save 10% of your salary and use automatic transfers to make it easier on yourself.

2. Control spending. It’s easy to picture the 100 ways to spend your first paycheck. You earned it so why not use it to buy the things you want. Keep in mind that spending on things you really can’t afford just means you need to work more hours. Understand the difference between needs and wants.

3. Understand credit reports and scores. If you haven’t started your credit history, you’ll soon find out how many places rely on the information contained in those reports. Learn as much as you can about the factors that impact credit reports and scores.

Know this – your future is made up from the choices you make today.

4. Contribute to your company's 401(k). If you’re not contributing then you are throwing away money. This is a retirement benefit and the sooner you start the better. Contribute at least the minimum amount of the employer match but work on saving 10% of your pre-tax salary.

5. Take advantage of all your company benefits and perks. Don’t just focus on salary and vacation days. Read through your company benefit program and ask your HR advisor about all the benefits and perks. You might be surprised to learn about group discounts, supplemental health insurance, gym benefits and more.

6. Join a credit union. Credit unions offer similar services as banks with some major differences. Credit unions are not-for-profit and have federal tax-exemption. This structure allows credit unions to offer better rates on savings, loans and have little to no fees on accounts.

7. Limit loans and credit card usage. It’s tempting to purchase things on credit because paying a few dollars a month is better than a one-time cash payment. Keep yourself from living on debt. Credit isn’t other people’s money. It’s your future money your signing off on.

8. Set clear financial goals and a lifestyle goal. You need goals in order to work towards it. Financial goals are things like buying a car, a home, going on vacation or paying off student loans. A lifestyle goal is the life you envisioned yourself living. Is it traveling the world, working in a farm or raising children. Keep your financial goals and lifestyle goal aligned.

Actionable Takeaways• Set up automatic savings transfers• Pull your credit reports on

AnnualCreditReport.com• Get to know your benefits and your HR

Manager• Find and join a credit union• Set financial goals and a lifestyle goal

Provided by aSmarterChoice.org

Banking – Credit Union Difference

Credit Unions offer their members financial products. While the types of financial products available to members may vary on the asset size of a credit union, a typical credit union will have many, if not all the same financial products available at other financial providers.

Credit union products include but are not limited to: savings and checking accounts, loans (personal, auto, mortgages for example) Money Market accounts, IRAS, credit card loans, ATM services, physical branches, electronically processed payments, mobile and online banking, investments and insurance.

Learn more:What is a credit union?How can I join a credit union?What are the differences between credit unions and banks?

Credit Reports & Credit Scores

Credit reports is an important aspect of your financial life. It determines your loan interest rates, may impact employment opportunities and increase down payment requirements.

Credit reports and score aren’t hot topics of discussion in college but you’ll soonrealize how important it is right after graduation.

If you’re looking to rent a new apartment or purchase a car chances are you’re required to have credit history and a credit score. Don’t stress. Starting a credit history isn’t all that hard.

What is a credit report and credit score?A credit report contains your credit history and the statuses of all your credit accounts. Lenders use this report to determine your credit worthiness for new credit. It includes information on the types of credit you hold, the payment history, credit limits and balances. Other types of information include your credit inquiries (places you've applied for credit), collection accounts, judgments etc. There are three major credit bureaus: Experian, Equifax and TransUnion.

Learn more:What is a credit bureau?How can I get a free credit report?

Credit Reports & Scores

Credit Reports & Credit Scores

4 Reasons to Build Good Credit Early

When I moved to San Francisco after graduating from Cornell last May, I will never forget how excited I was for a new challenge. As I went to go sign my final lease papers, I thought I was all good to go and just needed to hand them a security deposit and my first month’s rent, but then they asked me the question I had no idea how to answer, “Can you send us a copy of your credit score?”

Renting Property owners use credit scores as one of the first indicators of whether or not to rent to you.

Getting HiredThese days, your credit score is used by some employers to assess your trustworthiness.

Loans, Utilities and ServicesCredit scores are used by many companies to determine interest rates, approval status or down payment requirements.

The Long RunHigher credit scores mean lower interest rates saving you thousands of dollars in the long run.

Max MartinezCo-founder and COO, Phroogal

Establishing CreditApply for a credit card through a bank or credit union. If you’re not approved consider opening up a secured credit card. A secured card requires a cash deposit into a locked savings account. For instance, a $500 secured credit card requires $500 deposit into an account you’re unable to touch. After 6 month of on-time payments you can then apply for an unsecured card.

Keep in mind you do not need to carry a balance from month-to-month. Use the card and pay it off entirely by the due date. If you’re unable to pay the entire credit card balance, take a look at your spending habit and adjust.

Learn more:What is AnnualCreditReport.com?How can I get access to free credit scores?

Credit Cards

Oh credit cards. It’s a love hate relationship with them. Credit cards have their benefits but also have their pitfalls. It’s easy for balances to sky rocket especially when “it’s not your money.” It is your future money that you’re spending.

Credit Card PitfallsIt’s important to understand that credit card purchases is using your money and your future money that you haven’t even made yet. earnings is already allocated.

The more you spend using credit today the less money you have in the future. If you have a credit card with a balance of $3,873 at 15.24% interest rate and you only make the minimum monthly payment of $87, it’ll take you 16 years to pay off at a total of $7,933. That’s $4,133 in interest payments.

3 Things About Credit Cards1. Not all credit cards are created equal. Find a card that works best for your

situation and your “wants.” 2. Use credit within your budget. Don’t carry a balance from month-to-month.

Pay the balance in full each month.3. Credit cards help establish credit history and strengthen credit scores. It’s a

first step in obtaining a home loan or a financing a car. Reversely, high credit balances can lower your credit score and prevent you from getting that home or car.

1. Identify your goals. Whether you’re just looking to save a few bucks on lunch and dinner or you’re saving up for a big vacation next year, the first step in saving any amount of money is to identity what you’re saving for. Figure out your short-term goals (e.g., books for school, new clothes, holiday gifts, etc.) and long-term goals (e.g., vacation, a new car, etc.). Then, determine how much you’ll need to save for each of them.

2. Incorporate savings into your budget. Once you’ve figured out how much you’re trying to save, you can determine how much you need to put away each week or month and how long it will take you to get there. Factor that amount into your budget so you put it away immediately — you won’t miss what you don’t have.

3. Look for part-time work. When you make more money, you can save more money. If your schoolwork load is under control and you feel like you could handle another activity, check Craigslist and your career services office for part-time jobs that will fit into your schedule.

4. Utilize your student ID. That little piece of plastic can get you lots of free and discounted merchandise, dining deals and other great rates that you may have never thought possible. Make sure to check in with the student services department of your school to learn what types of discounts are available to you.

5. Shop the deals. Why pay full-price for something if you don’t have to? When it comes to buying things like clothes, gifts and haircuts, check daily deals sites, such as Groupon or LivingSocial, which offer deals on stuff you’re already planning to buy. If you go to a school that’s far away and you fly home often, make sure to check discount travel sites, such as Trivago and Kayak, which can drastically lower your travel costs.

How to Save Money When You’re a StudentProvided by Manilla.com

Take Advantage of Employer Benefits

It’s important to understand that salary is just one piece of the overall pay you receive from a company. Most people do not take advantage of the plethora of benefits and resources offered to employees.

Make friends with your human resource department and know all the benefits offered to employees.

Contribute to a 401(k). Contribute the amount your company will match. If not you’re throwing money away. Understand the various options for maximizing your return and use the free resources offered by the 401(k) service provider.

Participate in the employee stock purchase program. It’s an easy way to get started in purchasing stocks but do your research and understand the costs and risk involved.

Use your health insurance. You’re paying for it might as well use it to make sure your in tip-top shape. Take advantage of the preventive programs and annual physical checkups.

Use the tuition reimbursement. Not only should you take advantage of internal company education and training programs.

Attend wellness programs. Many companies offer employees dozens of programs from health resources, smoke cessation programs and financial seminars.

Join a credit union. Many employers still offer employer-specific credit unions. A credit union may give you an alternative channel for savings and credit.

Shop using corporate discount programs. Large corporations have partnerships with shopping portals that can save you up to 60% on things you buy from movie tickets, vacation packages and computers.

Use company discounts. Some employers offer discounts at fitness clubs and cell phone providers.

The Guide to Living Life RichCollege Edition

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