STUDENTS PROMOTING FINANCIAL LITERACY!

FALL 2013

SPFL Fa l l Newsl etter

Who Are We?
Students Promoting Financial Literacy is a sponsored student organization, partnered with the LS&A Scholarship Ofce. SPFL is dedicated to empowering our peers by teaching money management skills. With an uncertain economy it is important for our generation to think wisely about earning, retaining, and spending money. We provide peer-to-peer mentoring and educational opportunities to facilitate nancial literacy. Student debt has been one of the largest problems facing students post graduation. Students need a medium to educate themselves on how to deal with the burdens of debt. Besides creating fun and informative newsletters, SPFL holds workshops, puts on presentations, and holds social events. If you would like to learn more about SPFL or you would like to join the organization, please contact us at studentspromotingnancialliteracy@umich.edu. !

TABLE OF CONTENTS

1.1 TIPS TO STRETCH YOUR DOLLAR 20 quick tips about how to become a smart saver!!! 1.2 WHY YOU NEED BOTH CHECKING AND SAVINGS ACCOUNT Want to make your day-to-day nancial life easier and kick start your nancial future? Open a checking and a savings account!! 1.3 CREDIT/DEBIT CARD CASE STUDY: PIZZA Learn about the pros and cons of debit and credit cards and how to safely buy a slice of pizza.! 1.4 AVOIDING SCHOLARSHIP SCAMS Learn about avoiding common scholarship scams! 1.5 FINDING NEW AID after a change in situation! 1.6 STUDY ABROAD information about Study Abroad Financial Aid

The application for the LS&A Current Student Scholarship will become available in January. Undergraduates enrolled in the College of Literature, Science, and the Arts who have completed at least one full academic year at the University and who receive need-based nancial aid are eligible to apply for the 2014-2015 academic year. Click here to visit our website!! SPFL mass meeting for the Winter Term: date, time and place TBD. If you are interested in attending and would like to follow up on information, email us.!

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Tips to Stretch Your Dollar

Changing small habits in your lifestyle can help you save a lot of money. After all, if the little things build up, theyll create one big impact. Here are some quick ways to become a smart saver: 1. Learn to cook."You can eat a lot cheaper by learning to cook and making meals at home. ! 2. Buy food and supplies in bulk."Staples like oatmeal, spices, dried fruits, peanut butter, milk, orange juice, toilet paper, paper towels, shampoo, and cleaning supplies can be bought in bulk, especially at Costco!! 3. Use your freezer."Cook in large quantities and freeze your leftovers for another day.! 4. Avoid buying sodas and snacks out of vending machines. Instead, plan ahead and keep some snacks in your backpack.! 5. Buy generic."If you buy brand names, you'll likely pay more than buying generic, store brands or on-sale items.! 6. Order vegetarian."Vegetarian dishes generally cost less than meat-based dishes. Remember, you don't have to go to a totally meatless diet to enjoy vegetarian dishes now and again.! 7. Dont smoke."Smoking is expensivenot to mention it damages your lungs.! 8. Limit your coffee runs."Coffee drinks are pricey: at $4 a latte, you're spending $28 a week for your daily caffeine x. If you cut back to once a week, you'll save $24 a week or $1,248 a year!! 9. Drink less."Cutting back on alcohol can save you tons of moneyand help you feel better, too!! 10. Add another roommate."If you're living off campus and you have extra space, consider adding another roommate to help share the costs."! 11. Turn down the heat."You can save on the heating bill by lowering the thermostat to 55 to 60 degrees at night and whenever you're gone during the day.! 12. Walk or bike when you can."Even if you have a car on campus, walk to class or bike to the store when you can. You'll stay t, feel more energetic, and save on gas.!

Saving Money While In College: It Can Be Done!

Need to save some money?" Try cutting back on the B-Dubs!" We all like them wings, but sometimes you have to cut out the nonessentials." Set aside the money you need for tuition, books, housing, and meals rst, then create a budget using what is left." If shopping around on Craigslist or eBay for the things you need just isn't cutting it, maybe you should consider getting a part-time job in something that interests you and then pay yourself rst by automatically rolling a certain percentage of your earnings over to your savings account." Learning what you need vs. what you want can really help you stay out of the red! "!

Students Promoting Financial Literacy studentspromotingfinancialliteracy@umich.edu

13. Use the Web for comparison shopping."You can do quick price checks using websites such as"google product search before making a purchase. ! 14. Use the library."Instead of buying, you can save money on books, magazines, videos, and DVDs by checking them out from your library! 15. Shop around for clothes."Look for sales, off-season bargains, and overstock stores. Or go explore thrift stores with some friends! ! 16. Avoid clothes that require dry cleaning."Stick with cottons and machine-washable synthetics. Check labels before buying your clothesif it's dry clean only, think again!! 17. Use your student discount."Simple things such as going to the movies, or buying a pizza may cost you less if you show your student ID. Sign up for Groupon and Living Social to receive discounts as well.! 18. Consider cheaper entertainment."Lots of theaters, museums, and restaurants offer discounts on certain days or times. Go to the early movie and save two bucks. Eat at the restaurant that sent the "buy one, get one free" coupon in the mail. Or simply host a game night! ! 19. Buy less-expensive gifts."Consider homemade gifts, which can be less costly for the giver and more meaningful to the receiver. A DVD of

pictures of you and your friends or family members, for example, may be a cherished present.! 20. Avoid credit card pushers."Credit card companies ock to college campuses and solicit students endlessly in an effort to get new customers. Don't give in! If you think you need a credit card, get only one and use it wisely.!

Why You Need Both Checking and Savings Accounts

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Ease of online banking. Cant be bothered carrying a checkbook around? No worries. With online banking, you can check your balance and pay bills any time you want by hopping online with your phone or laptop.! The power to cash checks without paying fees. Having money in a checking account allows you to cash checks at your bank or credit union for free. Checkcashing stores charge you a fee as much as 3-5% for cashing a check. !

Advantages of a Checking Account

Easy access to your cash. With a checking account, you have easy access to your money through writing checks, using a debit card, or getting cash from an ATMwhile having the security of keeping your money in a bank. Carrying a debit card linked to your checking account is safer than carrying cash.! Ability to write checks and pay bills. Having money in a checking account allows you to write checks, which costs less than purchasing money orders. It allows you to electronically pay bills that you cannot pay for with cash!

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Students Promoting Financial Literacy studentspromotingfinancialliteracy@umich.edu

Advantages of a Savings Account

Safeguard money for future goals. Keep money for a special goal in a savings account rather than mixing it with a checking account, so you wont be tempted to spend it.! Get into the habit of savings. It's a smart idea to open a savings account, even if you don't have a lot of money to put aside right now. Even the smallest deposits will add up quickly if you continue to make them over time. Setting aside $10, $15, or $25 for savings each week is a good place to start.! Earn interest on your money. Savings accounts pay interestmoney that the bank or credit union pays you just for keeping your money with them. That really is free money!! A safe place for your money. In a savings account, your money is insured up to $250,000 by the Federal Deposit Insurance Corporation at any FDIC-insured bank. In a savings account at a credit union, your moneyalso up to $250,000is backed by the National Credit Union Share Insurance Fund.!

Advantages of Credit and Debit Cards Case Study: Buying Pizza

The rst time I used either a credit or debit card was two months ago when I arrived in Ann Arbor. My Visa card can be used both ways, and I found its convenience to be liberating, as I did not have to carry around burdening amounts of cash. However, looking deeper into the pros and cons of both credit and debit cards, I found that I should not be too free with how I use it.! A credit card, with one magical swipe, allows a student with no cash on hand to walk away from NYPD with a steaming slice of homemade pizza. Plus, each pizza slice that student purchases adds to his credit history, allowing him to build up his reputation as either a reliable or unreliable borrower and also adds

adds to reward programs such as frequent ier miles. While munching away on the delicious pizza in front of his laptop, the student may have a sudden urge to purchase a piece of Wolverine apparel on MDens website. Cash certainly would not help in this situation, but with the digits on the front of the credit card, the kid can buy as much maize and blue clothing as his heart desires. Most retailers take credit cards, so if he feels like buying from Nike instead, he is able to do so. Finally, say a friend randomly confronts our student and begs him to spot him for gas at the station down the block. The credit card enables the student to come through for his friend in this emergency even though neither has physical money.! ! As you can probably tell, credit cards can easily be used to buy more than the student can actually afford. Given the mindset that he can buy an unlimited amount of pizza, his credit card bills could have a few detrimental surprises. First of all, credit card companies are able to charge late payment fees of about 30 dollars. This may seem like no problem, but after annual use fees, interest rates increased by 22 percent for late payments, and transaction fees on cash advances, the credit card no longer seems like free money. In fact, companies often change annual interest rates on a oating basis, meaning they can change them at any time. So the moral of the story is, our friend had better make sure both his stomach and his wallet can support as much NYPD as he buys.! Now let us examine the same situation but have our student use a debit card instead. In addition to his pizza, the U-M student wants a cool beverage from the vending machine, but still does not have any cash. Using his debit card, he can scan an ATM machine nearby and pull out cash. While he is at it, he can also purchase postage stamps, make deposits, transfer bank funds, and obtain a receipt to keep a close record of his expenditures. Plus, he can still use this card to make his MDen and Nike purchases online.! !

According to recent Pew Research Center polling, 75% of all Americans believe that college is too expensive for most Americans to afford.

Students Promoting Financial Literacy studentspromotingfinancialliteracy@umich.edu

Debit cards, however, are just as liable as credit cards. If the student drops his card on State Street and does not report the loss within 48 hours, he could be accountable for up to 500 dollars in purchases. If someone happened to pick up the debit card and start using it, they would be able to clean out the account if our friend did not call in the theft within 60 days. Additionally, our friend may be subject to a quarterly or annual-use fee, an ATM fee, or a pointof-sale fee. Usually, ATM machines owned by the bank to which the card belongs will not charge, but outside ATMs will. Point-of-sale fees are also unexpected in that they are small charges enforced simply for entering a PIN after swiping the card.! ! I, just like most U-M students, have been tempted to buy delicious Ann Arbor pizza at many points this semester. However, as I near the looming prospect of facing my mothers complaints about my nances, I have cut back on my usage of my card. It is very easy to use, but obviously if not managed well it can be more of a burden than a convenience.!

Finding More Aid After a Change in Situation

! Students can take solace in the fact that the nancial aid ofce may adjust their award if there is a change in the students nancial situation. Regardless if you are receiving nancial aid or not, it is extremely important to notify the nancial aid ofce if your nancial situation changes for the worse. If this happens it may be possible to increase your aid, even if you have already received an award package. ! ! Some examples of situations that can alter ones nancial aid package or qualify one for nancial aid include loss of a job (parents job if you are a dependent student), work hours are reduced (parents work hours for dependent students), any other income reported on the FASFA is reduced or eliminated, you have left the workforce or reduced your hours to return to school, you or a family member has a costly medical emergency, or your familys home has gone into foreclosure. If you experience any of these, it is very important to contact the Ofce of Financial Aid, as you may now qualify for more aid. !

Avoiding Scholarship Scams

! As a college student, you are consistently a target of a scholarship scam. These scams thrive off college students who are tricked into believing that the scam is an actual scholarship and often provide money and personal information to the scam company. It is critical that you make sure that you are aware of scholarship scams and take measures in order to protect yourself against a scam.! ! It is important to use your best judgment, but there are a few indicators that can help you recognize a scholarship scam. First, if a scholarship requires you to pay money to apply, immediately consider this a red ag. No scholarships require students to pay fees to apply and this can be a clear indication of a scam. Secondly, if you receive a scholarship from somewhere or someplace that you have no relation to or have never heard of, this scholarship to be a scam. Third, make sure not to provide your credit card or other important personal nancial information. Why? These scam scholarships can take this information and use it to steal your information or ! money.! ! When in doubt, always contact your nancial aid ofce.Your nancial aid ofce will have the resources and capabilities to look at the scholarship you have allegedly received to determine its validity.

You will need to submit a nancial aid appeal and the University will ask you for documents or evidence to show that your nancial situation has changed. It is important for you to gather all relevant documentation once a change occurs. !

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Students Promoting Financial Literacy studentspromotingfinancialliteracy@umich.edu

An example of this would be to include a lay-off notice if you are claiming in the appeal that you need more aid because you lost your job. The appeal will most likely also include a written description explaining exactly what happened. It is important to include all numbers and be a transparent as possible in order to simplify the readjustment process. If the Financial Aid Ofce requires anything further, they will usually notify you. Most appeals include a written description of the change, plus all evidence or relevant documentation. ! ! After you submit this appeal, it is important to keep track of whom you have talked to in the ofce.You should also ask the ofce when they expect to have a decision by. Always remember to be patient, the Financial Aid Ofce is here to help you. There are many resources at their ofce available to all students. Dont forget, even if your nancial situation has changed and your aid did not change, you can still apply to scholarships. !

study abroad in Europe, you will be using a currency that is stronger than the dollar. This means $1 will exchange you less than 1 Euro. Also take into account any visa fees that you may have to pay to live another country.! ! Finally, take into account living expenses. If you are interested in studying in a large city such as Paris, you must remember that living expenses will be much more expensive in Paris than here in Ann Arbor. ! ! When living and studying abroad, it is important to budget. Now that you are in a foreign country, it may be necessary to have more emergency money on you at all times. Take into account that an emergency in another country may cost a lot of money.! ! There are many sources of aid when deciding a study abroad program to choose. If you choose a Michigan program, you can receive nancial aid through the Financial Aid Ofce. If you choose a program at a different school, it is important to contact their nancial aid ofce as you may qualify for aid via the school of your program. Other sources of aid for studying abroad include the College Boards Big Future scholarship search and the Institute of International Education. Both are databases, which include many different scholarships.You can also visit the website for Global Michigan. This website shows all resources available to UM students when deciding to study abroad. There are also various scholarships available through the university.! ! The Center for Global and Intercultural Study provides a wide variety of global engagement and learning opportunities to the University of Michigan community. "The LSA Scholarship Ofce offers scholarships for the LSA Global Experience Scholarship for all LSA students with nancial need. "For more information, please check out the website at: "http://www.lsa.umich.edu/students/scholarships/ currentstudents/lsaglobalexperiencescholarshipprogram. "It also should be noted that different schools and colleges, within the university, may have their own study abroad programs and students should explore these options and questions regarding funding with them specically.!

Study Abroad
! Paying for your study abroad semester is much more complex than paying for typical U of M tuition. When deciding to go abroad, it is important to take into account the fees and tuition associated with a particular program. There are many types of programs available, from CEA to Washington State University. Michigan programs will require you to pay similar tuition. Other programs may have much different fees. Something important to note is, you may qualify for in-state tuition if you choose your state schools program. An example of this is, I am from New Jersey. If I choose a Michigan program, I must pay out-of-state tuition. If I choose a program through Rutgers, I may save thousands of dollars.! ! Always remember that there are extra fees associated with studying abroad that are not usually considered. Be sure to consider any exchange rates. If you! "!

For more information on Study Abroad Financial Aid, visit www.naid.umich.e du/abroad

Students Promoting Financial Literacy studentspromotingfinancialliteracy@umich.edu

The leaders of SPFL strive to learn about money management and share their knowledge across campus. If you are interested in becoming a leader, email us: studentspromotingfinancialliteracy@umich.edu

About CashCourse!

CashCourse is a great resource for all college students. There are many helpful resources including articles, online quizzes, budgeting tools, short videos, and nancial planning documents. All of these materials help to make nancial planning easier to manage and understand. The LSA Scholarship Program, the Ofce of Financial Aid, and Students Promoting Financial Literacy strongly encourage you to visit the website and learn more about your nances. This year, you need to create a login to use CashCourse. Its super easy and takes ve minutes, so visit CashCourse.org and get started!!!