College Students and Money: A few more things

This is the fifth and final in a series this week about financial issues faced by students in college and trade school.

The list of financial topics that are important to students and other young adults is potentially endless, so please don’t assume that I’ve covered everything this week. Whether we are age 20 or age 60, we always need to keep learning about finances, because the financial world keeps changing – and our needs keep changing too. I’m wrapping up this series with brief notes about three more issues I see as critical for students.

Organizing Important Documents. Keeping important documents in a safe place where you can find them easily if needed is a critical skill to learn. And it is important for all key documents, whether they are paper documents, or electronic documents. Examples of important documents include:

  • Financial records of all types – financial aid papers, loan papers, receipts for major payments (tuition, rent),
  • Documentation of required educational costs, because you may be eligible for tax benefits,
  • Legal contracts (e.g. lease, cell phone plan contract) and documentation of pre-existing damage in a rental unit or dorm room,
  • Tax documents, including prior-year tax returns and documents, along with current-year W-2 forms and any other income records, as well as other year-end tax forms received.

I will not pretend this is a comprehensive list. General rule: if you think it might be important, keep it, at least until you can ask someone trustworthy about it. And I don’t mean just keeping it all laying around your room. We want these documents in a safe place where you can find them. That means they should be enclosed (in a box, or an envelope, or a designated drawer), and ideally they would be sorted into groups or sections or folders so you don’t need to look through all 500 documents to find the one you need. On your computer, you need a folder for important documents, probably with several sub-folders.

Protecting Personal Information. This means never giving out key personal information (social security number, birthdate, financial account numbers, and more) without making sure the person who is asking has a good legal reason to need the information. You will generally need to give your social security number for financial accounts, formal academic records, and medical records.

Additionally, only give that information to people when you know for sure they are who they say they are. That means if you receive a phone call and the caller says they are from your bank, don’t assume it is safe. When people call you, there is no way for you to know who they really are. Instead, use the number you already have on file for your bank and call them. Make caution your middle name when it comes to key personal information.

More: What to Consider When Sharing Your Data (Consumer Financial Protection Bureau)

Using Credit Cards Wisely. We could write a whole series on credit cards – and you can search the MoneyTip$ blog for other articles – but I want to focus on three main points:

  • College is an opportunity to build credit. You can do that by getting credit card and using it. College is a time when credit cards want you as a customer – later in your life, it may be more difficult to obtain credit. So go ahead and open one or two credit card accounts, avoiding cards with annual fees. Then use them. It is only by using your credit cards and paying the bills promptly that you create something extremely valuable: a solid credit history.
  • Surprise credit card bills can kick off a downward financial spiral. Therefore, keep tabs on how much you have charged to your card since the last bill. Keep a record on your phone, or on your whiteboard, or in a notebook or your checkbook – it doesn’t matter where you keep the record. Just make sure you’re prepared for the bill when it comes.
  • Credit is generally free if you pay the bill in full each month. Assuming your card has a grace period and no annual fee, you will pay no interest at all on your purchases if you pay the entire balance before the due date each month. Sure, the bill says you only need to pay $25, but as soon as you carry a balance forward to next month, you start accruing interest on every purchase you make.

An ounce of prevention is worth a pound of cure, right? These three habits – organizing documents, protecting personal information, and using credit wisely – will dramatically reduce the number of financial “bumps in the road” you’ll experience during college and throughout the rest of your life. You’ll never regret building these helpful financial habits.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Personal Information

The Federal Trade Commission has been gathering information about “data brokers.”  Data brokers collect personal information about consumers from a wide range of sources — including public records, loyalty cards, websites and social media — and provide information for a wide range of purposes. The FTC  offers an informative 2-minute video with an overview of the industry : Sharing Information: A Day in Your Life  .  Currently there are no individual consumer rights to limit distribution of information contained in a marketer’s data files or to correct false information in those files.

Data brokers use computer programs to combine and analyze data about consumers.  They create lists based on the data collected, often making inferences about consumers and place them in categories. Potentially sensitive categories include those that primarily focus on ethnicity and income-levels, a consumer’s age, or health-related conditions like “Age 65 ,” “Diabetes Interest,” and “Expectant Parent.”

Recommendations have been made to Congress for legislation giving consumers transparency on how and when the information is being gathered, options to “opt-out”, and rights to correct false information.  To read more, visit: http://www.ftc.gov/news-events/press-releases/2014/05/ftc-recommends-congress-require-data-broker-industry-be-more

Joyce

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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I.C.E.

When you look at or hear the word I.C.E., don’t think about frozen cubes of water in your iced tea.  Instead, think of it as a way to protect yourself in case of emergency.  Owners of cell phones have an option to identify their “In Case of Emergency” contact(s).

This campaign actually started in London almost seven years ago.  Last week when a co-worker asked me about it, I shared that in my personal cell phone, I have three names listed as ICE contacts.  I have their home and cell phones listed, for a total of 6 numbers.  When I scroll through my contacts – the ICE entries are in Red.

This information can be used by paramedics or police to reach a relative or friend who could help identify injured individuals or victims.  They can also provide vital information about any medical conditions.

Many people do not carry emergency contact or next-of-kin details in their wallets, but they do carry a cell phone. Emergency personnel frequently look for a cell phone but then don’t know who to call.  The ICE idea originated with a British paramedic, Bob Brotchie.

Before you add someone to your cell phone as an ICE contact, make sure the person agrees to be a contact.  They need to know your birthdate, name, address and medical things like allergies, blood type, and relevant medical history. This information will be shared with the hospital and will expedite treatment.

Some cell phones are locked so information can’t be retrieved without a password.  Fortunately, some Smartphone systems let users specify emergency contacts which can be called without knowing the password. With the Siri service, a stranger can access emergency ICE contacts even when the phone is locked, simply by speaking the command “contact ICE.”

The ICE could literally be a lifesaver, expediting medical treatment and obtaining help quickly.  I put ICE contacts in my parent’s cell phones – think about helping to protect your loved ones.

-Susan

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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