If My Balance is $25 I'm Doing Fine, and Other Financial Myths

What do you know about money? Here are things you need to know as you begin living as an adult:

• If you have a checking account, You need to know how to go online and check your balance, and see what's going on with your account. It will show you all of your transactions. A transaction is either something you purchase/a debit (buy) or a credit (such as your paycheck being deposited).
• What do pending or posted mean??

-Pending means the bank knows you spent that amount and they'll take it out soon. Posted means they've taken it out. See if the balance includes pending amounts.


-When you bank (or buy anything) online, be sure to check that the URL (address at the top of the screen) has a padlock on it, that means the website is as secure as possible. Consider not banking using your phone, because phones get stolen or lost. Be constantly aware of being private when doing online transactions. Also, when you use a cash machine (ATM) be sure it's one your bank uses, or you will pay a fee for getting cash out. And that's how banks make money.

• What's an overdraft?

-An overdraft means you wrote a check or used a check card for an amount more than was in your account. For example, you have $50 in your account, but you write a check or swipe your card for $75. It may not reject this immediately, but fairly soon after you've tried that, the bank will notice.... and ironically, the punishment is typically a $30-$35 charge you pay the bank, plus the amount of the transaction or withdrawal. Yes, they are charging you money you obviously don't have. It's nonsense and it's how banks make money.

• What's a 'Stop Payment?'

-If you wrote a check for something and that check gets lost, or if you have a dispute with the place you wrote the check to, you can go to the bank and tell it to stop payment on that check. They'll refuse to pay it if the person or place tries to cash it. They will also charge you at least $30 to do that Stop Payment--they won't care what the situation is. And that's how banks make money.

• Do you know if your account has a minimum balance?

-Some do, some do not: Find out, and if there is a minimum, be sure you always leave that in the account or you will be charged a fee. And that's how banks make money.

• What is principal? What is interest?

-The principal is the basic amount of a loan you take out. If you take out a loan for $1,000, that's the principal. The interest is the fee you are using to 'use' the principal, and that's how banks make money.

• What is compound interest?

-Compound interest means you earn interest on your interest. If you put money in the bank and the account pays interest, you continue to gain (or accrue) interest on not only the main amount but the interest, too. This is how you make money, not the bank.

• Why should I pay more than my required payments on my loans (or credit cards)?

-When you take out a loan, any kind of loan including a student loan, the lender will charge you interest, that's their fee for your 'using' the money. You'll be paying on the interest before the principal (the amount of your loan). And so, it takes while to really start to chip away at the loan amount. Paying even a little bit more every month adds up: If you pay another $5 a month, that's $60 a year, plus it reduces your loan and helps you pay more and more of the principal and less interest.

• Why is it so hard to get out of credit card debt?

-Your credit card company charges you to use money you don't have (interest or finance charge) just like any other loan. If you charge something that cost $50 and their finance charge is 20%, then you're actually going to pay another $10 for that item, a total of $60. Once you repeat this with lots of purchases, you're paying a lot more for your total. Still, for some people, it's so easy to hand over a credit card to get something they want right now, until the bill comes and they realize they charged more than they thought. If you make the minimum payment, it will take a long time to pay it off because a chunk of your payments are going to that finance charge and not paying off the items (The 'principal'-see above). The credit card company is happy; you, not so much. You're paying interest on the whole amount you owe. You need to pay more than the minimum, or pay it off every month if it's possible.


Just for education purposes, look at a credit card offer you get in the mail before you rip it up and toss it: Read the fine print telling you what the interest rate is, what the late charges are, and what the annual fee is. These are not negotiable (you can't make them sympathize with you if you goof up). It's not uncommon to see a 28-30% interest rate, especially if you miss a payment.


Want to figure out how long it's going to take you to pay off an amount? Enter your numbers here and get a surprise:  https://www.credit.com/tools/credit-card-payoff-calculator/

• What is a budget, anyway?

-A budget just means that you write down how much money comes in and what goes out (is spent). If your paycheck is $500 every other week, you take home $1000 per month. What are your monthly expenses? These include food, house or apartment payment, car payment, school loans. Write them all down and add them up, and subtract from that $1000 income. What's left over is what you have in what's called discretionary spending-it's at your discretion how it's spent. You can spend it or save it or do part of each. And that's your budget.


If you see that you're spending more on something than you might need to, maybe you can find a way to cut down. How thrifty are you with food buying? Gift giving? Nights out on the town? That snack you like to pick up at the gas station? Remember how hard you work for your money when you're thinking of buying something. Think in terms of "want" vs. "need." It's a good idea to save money even if you don't need it right now: Cars break down, things need repair, and lots of other things happen that require money. It's nice to have a 'cushion' set aside in case that happens. Or, you may want to save for a big-ticket item such as a new computer or a down payment on a better car. There's an old term: Pay Yourself First. In other words, always take some of your pay and set it aside for your use.

Gift Ideas For Financially Challenged College Students

OK, Christmas is looming and you want to give people something. Anything. And your bank account says:

 

 

You don't have time, you don't have ideas, but mostly you don't have money. What to do....

 

Here are some ideas you might find helpful.....Most of these should be well under $5.00

 

• A really large bar of chocolate or any kind of sweets, or nuts, or gum, or chips. Imagine if you got an entire bag of Kisses or M&Ms that was all yours.
• Any kind of small container like a mug or a big measuring cup full of small candies.  Wrap the whole thing up with plastic so the candy doesn't spill. Nuts are another good filler.
• *Be considerate of friends who are trying to lose weight or have health concerns, as to what foods you give as gifts.
• 2 liter bottle of soda and a small bag of chips. Believe me, it will be consumed happily.
• Coloring book and colors or pencils. Yes, for adults. Some days adulting is hard.

• A $1 vase with a single red carnation (maybe 2, if you're feeling wealthy) and some greens. Tie a ribbon around it to make it festive. Have at least a little water in the vase when you give it.
• A nicer pen than you might normally buy, something colorful or with soft grips.
• CD of great music you've made yourself. Make an interesting looking sleeve or jewel case insert that gives the tracks.
• Stocking cap. Everyone tends to lose them, and if not, you can always use a spare.
• Small package of really good coffee. Alternately, hot chocolate or tea. You can get powdered apple cider, as well.
• One Christmas tree ornament
• A vase or a straight-sided glass full of candy canes
• A bar of really lovely soap. These often come wrapped in an attractive box and cost about $4.00.
• Calendar--desktop, blotter style, small to hang up, large to hang up, mousepad
• Planner for next year

• Air fresheners, for the car or the home.
• A pair of socks, maybe two pair.
• Magazine and a snack.
• Book. There are so many types of books, there's bound to be something they'll like (See what I did there?)
• "Sample size" lotion, hand sanitizer, or other items, maybe in a cloth bag
• Small zippered bag for pencils, coupons, keys
• Key chain or key chain ornament
• Cleaning cloth for phone or Ipad screens
• For someone who lives in another state, a pile of postcards from your hometown. They're about 30c apiece. These have been seen at Hallmark.
• Candle, or for safety's sake, some battery operated tealights
• Batteries--who hasn't run out of these?
• Print out some recipes for food you've always gotten compliments on, tie with ribbon. There is a template for recipe cards in Publisher, or you can download one.(Bonus: if you search 'Index Cards,' they also suggest flash cards. Can you use those for studying?)
• New deck of playing cards, possibly with something to play for
• For a fellow student, simply think of things you'd like or can use: a small package of hand wipes? Fresh supply of decent pencils or pens? Snacks for studying? Paper clips? Lanyard?
• Journal and pen
• Small frame with a poem or small symbol in it, or a tiny drawing you've done
• Puzzle
• Sheet of 10 stamps
• Make handmade cards-with a bit of imagination, you can make several for not much money
• Print some of your better photos at about 20c apiece at the 4x6" size.  Frame one or use it to make a card.

Where, one may ask, does one find such items?

 

• Dollar Stores--and use them for wrapping and ribbon as well
• Goodwill: Containers for treats, and also books, decorations, vases candle holders-you can also find things that were originally from Target with tags still attached, for a bargain, too
• The grocery store--you'll be surprised what you can get for under $5, even under $3 
• The grocery store will often have single flowers for under $2.00.
•  Half Price Books: Their clearance area is a feast of great books, many of which are under $5 and often under $3. (be open to a book strictly for fun!) They also carry magazines, CDs, and movies at reduced prices. This is another great way to Go Green.
• Barnes & Noble always has displays of books for under $10, and sometimes under $5.
• Drug stores can often have simple and inexpensive items you can give others
• Look in the 'Travel Size' bins, many stores have them. A little bit of something nice is a good treat.
• Bullseye's Playground at Target (formerly their Dollar Spot) has items for $1, $3, and $5.
• Michael's has bins of small items for $1.50 apiece--they might be helpful in making or wrapping small gifts
• You can order photos online or using your phone and then pick them up at Target and other stores

Don't forget, part of your gift is presentation. Without spending much, you can dress up almost anything with a colorful box and/or bag, and ribbon. Simply tying a bow around something can make it seem more like a gift. Making a "to and from" tag to hang from the ribbon adds a nice touch as well. If you have a shredderful of paper, you can use the shreds to cushion a gift. You can use strips of fabric instead of ribbon, or wrap an item in a kitchen towel for a gift wrapped in a gift.

 

But remember: it really isn't about the gift, it's the gesture. And if nothing else, you can simply tell your friends and family that you can't afford to do gifts this year but you would love to spend time with them. They'll be fine with it. Really. They're your friends and family.

 

 

Merry Broke Christmas!!

Anybody can relate to the phrase: I can't afford it. Especially college students.


What do people actually spend on Christmas in the U.S.?


Here are some rather startling statistics:






To start the 'holiday season,' did you know people spent $350 Million on pet Halloween costumes last year?

Americans usually spend about $600 Billion on Christmas. Here is a rough breakdown per family:

• Tree                     $  42.00
• Cards and postage   32.00
• Decorations             73.00
• Food                        95.00
• Travel                    960.00

Black Friday stats:

• Amount spent on both Thursday, Thanksgiving Day, and Black Friday:   $4.45 Billion
• Amount of that which was spent online       $2.72 Billion

What people are buying most of this year:

• 4K TVs
• Legos
• Shopkin Dolls
• Barbie Dream Houses

Some more stats...

• Amount of business done using cell phones:   $1222 Million
• Average amount spent per each person in the U.S.  $300.00
• Amount the average family spends overall each Christmas   $750.00
• Sadly, the amount usually spent in a year on books per family    $111.00  (not textbooks)

And your wallet says, "???!!!!!!

Here's an idea to help spend less and have gifts mean more: Narrow your categories. Maybe each child, for example, will receive:

• One thing he/she needs (socks, pajamas)
• One new pair of mittens and/or winter hat
• One soft thing (teddy bear, blanket)
• One thing to create with (paints, building)
• One book
• One thing the child simply wants

Remember the items you charge, you will indeed have to pay for. Be sure you do this infrequently, and plan to pay it off just as soon as you can. Use a credit card with a low interest rate but still avoid charging anything. It's too easy to amass a big debt, and you really cannot buy happiness.


Consider next year stashing away a certain amount every month so that by next Christmastime, you have a couple of hundred dollars to spend in cash. Lower what you consider 'needs'---you can still give, just give less and give more of yourself. Spend time with people, not money.

• $10/month x 10 months (gives you time to shop ahead)   $100.00
• $15/month x 10 months                $150.00
• $30/month x 10 months                $300.00

See how it adds up? Some banks will set this up for you, or you can simply do it on your own as a monthly payment. Keeping it in the bank will help you resist the temptation to dip into it before you need it for Christmas, but you could keep it in an envelope on a high shelf.

 

The best way to spend less-sometimes- is to make simple gifts for people. Are you a good photographer? Have one of your pictures printed and framed for a gift. Do you cook something delicious? Food is always appreciated, and homemade is always better than store-bought. Can you build a simple item of wood? Sew? Knit? Do a craft? You might find an interesting glass jar and fill it with candy or other treats. Make a unique card to go with it, and you have a perfectly lovely gift. The satisfaction of giving something you worked on can be much better than wasting money, plus you can work on it at will and not have to fight the crowds in the stores-and not have several hundred dollars of credit card debt to deal with after the holidays.