Students: Easy Ways to Cut Costs

College students are gaining confidence in personal finance management but unfortunately also have become less competent. A survey conducted by High One and Everfi recently found that in 2014, college students were more likely to use more than one credit card than they did in 2012, according to USA Today.

Considering that nearly two-thirds of undergrads take out student loans, and college seniors are graduating with an average loan balance close to $24,000, if students aren’t careful about spending, the first financial steps they take after college might send them in the wrong direction.

While college expenses may seem limitless, students can learn to manage them by avoiding these common money drains, according to CUNA’s member education department:

• Carrying a credit card balance. Many credit card companies lure borrowers with enticing offers, and then hit them with a hefty monthly interest charge on their accrued balance. According to Forbes, the average student graduates with $4,100 in credit card debt. Using a credit card is not a bad thing and actually can improve a credit score, but the key is to pay off the balance every month. If you don’t already have one, consider getting a Hopewell Federal Credit Union credit card.

• Going out to eat—a lot. Say you spend about $5 on a coffee and bagel for breakfast each morning and $8 on a sandwich or fast food for lunch and dinner. That means you’re spending more than $100 for five days of food—and these examples are modest. While it may take a few extra minutes each day, buying $100 worth of groceries and cooking at home will stretch your dollar, and can be healthier too;

• Buying new textbooks. According to the College Board, the average student at a four-year public college spends $1,200 on books and supplies annually. You can’t eliminate the cost completely, but there are ways to trim your textbook budget. Consider purchasing used textbooks online. You also can resell your textbooks via sites like Amazon Marketplace or Half.com after classes end. Textbook rentals also have become popular. Some colleges offer free book rentals to their students. Anyone can rent though. Try sites such as Chegg, BookRenter, CampusBookRentals and CollegeBookRenter; and

• Not using campus resources. Most colleges assess fees, which help provide a range of student services beyond those covered by tuition. Since you’re already paying for these services, don’t waste the money elsewhere. For example, use the campus gym instead of paying for an additional gym membership and use campus technology resources instead of paying an offsite repair shop.

Age Doesn’t Matter: Focus on Retirement Savings Today!

While many Americans might feel confident in their ability to support themselves after they retire, thousands will reach the age of 65 without adequate financial preparation.

It is never too early—or too late—to focus on retirement savings. The Center for Retirement Research at Boston College estimates that you need about 70% of preretirement income to maintain your lifestyle in retirement.

* If you are in your 20s, the center advises that you start saving 10% of your pay annually and gradually increase the percentage over time.

* If you’re playing catch-up starting at age 45 and hope to retire at 65, the center estimates that you will need to save 27% of your income each year. If you can put off retirement to age 70, that drops to 10%.

* For those who are starting even later, there are different ways to attain a worry-free retirement: work longer, start a small business, freelance, look for less-costly living situations and/or locations, and find ways to reduce other expenditures.

Here’s another way of looking at it, from the National Foundation for Credit Counseling (NFCC):

* Between the age of 21 and 30, the cost of education is the major hurdle as the long process of student loan repayment begins. Focus on saving and debt management to keep financial stress out of the picture.

* Between the age of 30 and 45, home ownership allows you to build equity in your property as you pay down your mortgage. In addition to building equity in your home, focus on growing your retirement savings.

* After the age of 45, increase contributions toward retirement savings while reducing budget expenses. Downsize your credit card debt as well.

To stay on track, seek advice from a Certified Financial Counselor. For online tools, search “sharpen your financial focus” and “my retirement paycheck” on the Web.

For personalized help from a financial counselor, visit http://www.nfcc.org or call 800-388-2227.

Don’t wait until you’re in deep trouble to ask for a financial checkup at Hopewell Federal Credit Union. We’re here for you. Contact us today.