Bank of North Dakota College Planning Center

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3 It s hard to believe that the way you save and spend money as a high school student sets the stage for your future. If you develop good habits now, you are more likely to be smart with your money as an adult. This booklet is a quick guide to get you started. If you would like to learn more, visit the high school student section of the College Planning Center website and click on Managing college finances. Scan QR Code to get started! banknd.nd.gov 3

4 Get Organized Start a filing system so you know when your bills are due and how much you owe. It saves time, money, and headaches if you keep everything in one place. In your file, keep copies of: Set your budget Where does your money come from? You may receive money from a job, student loans, or a savings account. List these under the income portion of the table and add them up. Then, figure out your expenses to see if you have enough money to get through the month or school semester. +If you find that you don t have enough income to cover your expenses, divide your expenses between needs and wants. Cut 4 back on those expenses that are wants so you don t overspend. Bank of North Dakota College Planning Center

5 Monthly Income Net salary (after taxes and FICA) $ Student loans $ Other sources (family, savings account) $ Total monthly income $ Monthly Expenses Books $ Cable TV/Internet $ Car expenses (insurance, gas, maintenance) $ Car payment $ Child care $ Clothing $ Computer, printer, paper $ Dental and eye care (glasses, braces, regular visits) $ Emergency fund $ Entertainment $ Extras (like gifts or tax preparation) $ Food $ Housing (rent or dorm room expenses) $ Housing maintenance (appliances, yard, etc) $ Laundry (coin operated laundry or dry cleaning) $ Medical expenses (insurance, medication, co-pays) $ Other loans/payments $ Personal items (like household and toiletries) $ Savings $ Telephone/Internet $ Tuition and fees $ 0Total monthly expense $ Balance: Total monthly income monthly expenses = $

6 Monitor your checking and credit card balances Pay close attention to your checking account and credit card balances. If you spend more than you make each month on a regular basis, you may find yourself in money trouble. Keep your receipts and make sure they match what s on your bank statement every month. Use your monthly statement or online banking record to reconcile the balance in your checkbook every month. Online banking allows you to check your balance more often. If you need help learning to balance your checking account, ask your bank or credit union. There is usually a worksheet on the back of the statement that you can use to help determine your balance. Always know the accurate, up-to-date balance of your checking account. Realize the balances you get from the ATM or the number may give you a balance that is greater than the actual amount in the account. Checks can take several days and longer to clear your account and they are not deducted from your balance until they clear. Review your credit card statement every month to make sure that someone has not stolen your identity and charged on your account. Credit Smart A credit card can make it easy to overspend. If you have a card, you must pay for what you buy. You don t get a break because you are a teen. If you spend more money than you are able to pay back, you can ruin your credit score, also known as a credit rating. Businesses may look at your credit score before renting to you, giving you a job, making a car loan, or giving you a credit card. Credit information will typically stay on your report for seven years. As a student, you can think of your credit report as your credit transcript and your credit score as your credit GPA. The scale ranges from 300 to 850. Scores above 700 are generally considered to be good. Credit scores are based on your total debt, the age of the accounts, number of credit accounts including new credit inquiries, and the proportion of credit card balance to the total available credit card limit. 6 Bank of North Dakota College Planning Center

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8 Establish a good credit history You will establish a good credit rating if you: Pay all bills on time Establish a checking and/or savings account and use them responsibly Have a telephone and utilities billed in your name Pay student loans on time after you are done with college The Loan Truth Nothing in life is free. If you borrow money, you need to pay it back with interest. The longer it takes to pay off a loan, the more it costs. You start paying for student loans six months after you graduate or leave college. Make sure that the career you choose will pay you enough so you can repay your loans. Your high school or college financial aid counselor can help you set a reasonable amount for student loans. The balance of college expenses may be paid by your savings, scholarships, gifts from relatives, or a part-time job. Choose the best credit card for you As a teenager, you are a prime marketing target for credit card companies. Do your research before signing up for a card so you get the best deal. Fees, charges, and benefits vary among credit card issuers. Compare these features and select a card that fits your needs: Annual Percentage Rate (APR): A measure of the cost of credit, expressed as a yearly interest rate. Grace Period: The time between the date of a purchase and the date interest starts being charged on that purchase. Annual Fees: Many credit card issuers charge an annual fee for granting you credit. Transaction Fees and other charges: These fees are charged if you use the card to get a cash advance, if you fail to make a payment on time, or if you exceed your credit limit. 8 Bank of North Dakota College Planning Center

9 Identity theft Stealing the identity of unsuspecting people is big business. Thieves get your private information by looking through your trash, stealing your credit card numbers when they process your card, pretending to be a financial institution or government agency and calling you for information, hacking into your and online accounts, and stealing your wallet or purse. Identity theft is a big deal. It can ruin your credit rating and your name. Always shred your financial documents and paperwork when you are done with them. Keep your social security card and personal information in a safe place, not your wallet or in a drawer that others can open. Never give your social security number or other personal information unless you know who you are dealing with. Don t click on links unless you know where they come from. Select a password that isn t obvious to others. Credit card reminders Credit Card Do s Pay the balance in full every month on time. If you can t pay the full balance, pay more than the minimum payment so you reduce your principal balance. Use only for emergencies or for purchases you can afford to pay for that month Limit the number of cards you have Keep copies of sales slips that are charged and compare them to your statement If your card becomes stolen, report it immediately to the credit card company. Credit Card Don'ts Don t sign up for a credit card to receive a free gift Don t spend on impulse Don t spend up to the maximum credit limit Don t share your card or account information Don t open additional cards to pay off other debt. banknd.nd.gov 9

10 If you suspect someone has stolen your identity, Act immediately! If you have strange charges on your card, receive bills that you do not expect, or are denied credit even if you ve paid your bills, your identity may have been stolen. Contact your credit card company right away. Check your credit report and place a Fraud Alert on the report if needed. Visit AnnualCreditReport.com or call to order a free credit report. If your identity has been stolen, visit ftc.gov/idtheft so you know what steps to take. If you have difficulty paying your bills, don t ignore troubles. Tackle them. As soon as you realize you may have trouble paying your bills, you need to come up with a plan. You won t solve anything if you avoid phone calls and other contacts from the people you owe. The people you owe money to are called creditors, and they are usually willing to make new arrangements if you work with them. The first step is to determine the amount of money you have coming in every month and the expenses that you must meet. Expenses you must meet include rent, food, car payments, loan payments, insurance, and transportation and car payments. See the budget form on page 5. Then, create a plan that shows the amount you can realistically pay to each creditor every month. Now it s time to call creditors and ask them to work with you so you can repay your debt without damaging your credit rating. Having difficulty creating a plan? Get help if you are having difficulty coming up with a plan. Credit counseling agencies offer advice and take an active role to help you manage your money. There are a number of nonprofit organizations that provide this service free or for a small charge. You can receive information on budgeting, setting up a payment plan, and educational programs. Avoid agencies that charge high fees for this service. 10 Bank of North Dakota College Planning Center

11 Avoid quick fixes Some companies prey on those who aren t paying their bills by promising to take care of everything for you for a fee. Avoid these companies because they often try to talk you into filing for bankruptcy and charge to help you do that. Bankruptcy stays on your credit report for10 years and hinders your ability to get credit, so it should always be the last resort. To sum it up Practice good habits and keep spending under control. If you get in trouble, solve the issue rather than ignore it. You can visit the College Planning Center at banknd.nd.gov for more information. Call us or us and we ll be happy to help you. banknd.nd.gov 11

12 1200 Memorial Hwy PO Box 5524 Bismarck, ND TTY: FAX: banknd.nd.gov