12.9: Summary

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There are a lot of benefits to good financial management. Primarily, it generally allows you to do more of what you want with your life. When you have poor financial habits, too much of your money goes into other people’s pockets. But when you have good financial management habits, you can afford to do more because you have worked hard, separated needs from wants, saved and invested, and avoided credit card and debt pitfalls.

Career Connection

Search the articles at PurposefulFinance.org and find one you deem interesting.

Why do you find it interesting, and how can you apply it to your life? How does the article relate to the concepts in this chapter?

Rethinking

Revisit the questions you answered at the beginning of the chapter, and consider one concept or practice you learned in this chapter that might change your answer to one of them.

I actively and regularly plan and/or monitor my finances.
I understand the benefits and risks of credit.
I have a plan to repay my student loans.
I regularly take steps to protect my identity and assets.

Where do you go from here?

Financial literacy is a topic that many college students struggle with, but good financial planning habits will benefit you long after your college days are behind you. What would you like to learn more about? Choose a topic from the list below, and create an annotated bibliography that would direct further research.

Marrying personal finance goals with financial planning
Creating a saving and spending plan
Best practices concerning credit cards
Financing a college education

Chapter Takeaways

Controlling your finances while in college is important both for your future well-being and for eliminating stress that can impede your academic success.
Meeting your financial goals while in college may require some financial sacrifice but need not result in hardship.
The best student jobs offer benefits beyond just the money.
There are many ways to reduce expenditures while in college. Tracking your spending with an effective budget is the first step toward taking control of your finances.
Understanding your own spending habits and practicing a few simple principles for spending less help prevent unnecessary debt. Make and use a budget to take control of your financial life.
Credit card spending is the leading cause of out-of-control debt in America today. Use credit cards minimally and wisely.
Protect your financial identity by maintaining good records and preventing criminals from obtaining your personal or financial information.
Look into all forms of financial aid and apply for all aid for which you may be qualified. Do not take more in student loans than you really need.

Chapter Review

Why is it necessary to track all your expenditures if your goal is to spend less to avoid financial problems while in college?
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Imagine several situations in which a friend asks you to join some activity that would break your budget. Write down positive, upbeat things you can say in these situations instead of glumly saying “I can’t afford it.”
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List as many ways as you can think of to locate job openings for which you might apply.
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Who should you talk to if you are having difficulty paying for college or meeting your expenses?
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Outside the Book

Save the last four credit card offers you have been offered. Compare the interest rates. What did you learn from the cost of each card? Is there an annual fee? If you charged a total of $3500 and you paid each month in full versus paying the minimum amount due, what would the annual cost be?
Choose a friend you enjoy spending time with and see if he or she will help you with an “experiment.” Together, make a list of fun free things to do over the next two weeks. For example, look for free concerts and other campus activities. Make it your goal to spend as little as possible for two weeks, cooking meals together if practical, taking lunches and snacks to classes, and finding new ways to enjoy your free time inexpensively. At the end of this experiment, compare what you spent with your past habits. How successful were you? Think about how you can continue saving in the future.
Make a budget as described in this chapter, based on realistic estimates of your daily and monthly expenditures. Choose two or three categories of expenses and pay special attention to these for a month. For every $10 less that you spend in these categories during the month, put $3 in a new category to reward yourself. Then at the end of the month, use this new fund to celebrate your success with something special.
It’s never too early to think about summer jobs. Go online to check out summer jobs and internships you might find interesting. Check out the application process and deadlines and write these on your calendar for the winter or spring to remind yourself to apply early.
Go to the following Web site and take the “Finance Quiz To Test Knowledge Of College Students”—then check other resources on this site for more financial information you may need:
familyresource.com(opens in new window) [www.familyresource.com]

Make an Action List

Spending

I spend too much money every week on

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My action plan to spend less includes the following:

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Lifestyle

The area of my lifestyle where I know I spend more than most other college students is

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I can make these adjustments in my lifestyle to reduce this expenditure:

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Job in College

Ideally, I’d like to work no more than _______ hours a week.

What I’d most enjoy doing is

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I can learn more about possible jobs close to my ideal by

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Saving Money

I believe I can realistically save this amount of money a month if I watch my spending:

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This is where I will put my savings:

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I will allow myself to spend this money only for something major like:

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Budgeting and Tracking Spending

Here’s how I have kept track of what I spent in the past:

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So that I can maintain a budget now and in the future, I know I need to record every expenditure. I will do this by

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Credit Card Use

In the past, I usually used my credit card to buy things like

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If you have not always been able to pay off your balance every month: I will try to avoid using my credit card as much by taking these steps:

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Chapter Takeaways

Chapter Review

Outside the Book

Make an Action List