Brought to you by: financialfootprint
Understanding Your Student Finances
So, you’ve really been enjoying that new credit card lately, haven’t you? It seems like every time you walk into the mall you hear a teeny little voice coming from your wallet. “HEY BUDDY!” your credit card says, “Let’s get you those track sneakers you wanted! Then let’s get you that black light! And you KNOW you need the complete DVD collection of Transformers! It’s totally worth it! You trust me, right? Tee Hee!” You swipe your new friend at store counters all over the mall. Managing your student finances seem painless at this point…and swipin’ away is even easier!
A month later you get your credit card bill in the mail. Yikes. You went over your credit limit and got hit with massive fees. How are you going to pay all of it? Your credit card speaks up again. “Aw, don’t worry about it, bud. You don’t HAVE to pay on time if you don’t want. Hey, let’s get you that sports jacket for your date!”
Get Back to Student Finance Basics
First of all, you may want to see a shrink if you are having conversations with your credit card. Second of all, what are you doing?! Let’s get back to the basics of managing your student finances (Your personal finance guide is definitely riled up here!). A credit card is essential for buying things you NEED when you don’t have enough money at the moment. It’s one of most powerful tools you have. But a wise man once said, “With great power comes great responsibility.” You are responsible for paying back what you owe on time and in full. Whether you do or don’t will affect your credit score—which will affect your student finances and even when you’re out of school, your own personal finances
Student Finances 101: The All Important Credit Score
Banks, lenders, and stores don’t care if you’re a nice, decent human being. All they care about is your credit score. A credit score is based on your personal information, what credit cards and loans you currently have, how much you go over the monetary credit limit on your credit card, and whether you pay bills back on time or not. A score is then calculated for you. You can find out your score for free at annualcreditreport.com.
A credit score ranges from 300-900. This ain’t like golf – you want a HIGH score. If you have a score above 700, you have been responsible with your credit card. You’re not using too much credit, and you’re paying your bills back on time. You’ll be able to get loans and mortgages easily from banks in the near future. Even potential bosses will hire you because you’re just such a responsible person.
But if your credit score goes below 600, that’s bad news bears and makes your student finances or personal finance situation tougher. You either can’t or won’t pay back bills on time and you spend way past your credit limit; building negative student finances track record is never a good way to start managing your personal finances. You could encounter road blocks along the way. For example, when you go to the bank for a loan, the teller will look down with you with a smirk and say, “Sorry, but we can’t trust you with our money.” Trust me, you don’t want to be forced to go to Billy Bob’s No Credit Loan Outlet where you promise to sign over your kidneys if you can’t pay back in time.