How to be Money Smart
Megan Riksen (00:20):
Hello and welcome to the Work Like a Laker podcast. I'm Megan Riksen. And today I'm joined by Grace Pushman. Hello, Grace.
Grace Pushman (00:27):
Hi. How are you today?
Megan Riksen (00:29):
I'm doing well. Thanks. So today we are talking about a pretty important just overall life topic which is personal finance and being what we're calling money smart. So managing your money is an important topic, obviously at any age. But we think it's especially important to try to be as savvy as possible while you're in college. This is typically a time when you're incurring debt related to all of your college expenses and therefore it's a pretty critical time to be pretty smart with your finances. Yeah. And you know, your personal financial health is very much related to your career as well, because if you, you know, have a lot of debt, for example, that might impact what type of career you're going to, you're going to go into, or what job offers you can accept.
Grace Pushman (01:18):
And also it's tied into your finances are tied into your career when you're looking at job offers like evaluating, okay, well, what are the benefits? You know, what type of retirement plans are there. So you need to be aware of these things before you enter the job market so that you can be smart when you finally are ready to look for jobs and also thinking about, you know, where you're going to live cost of living, how that will impact, you know, how much money you're making and how you can budget. So it's very much tied to your career.
Megan Riksen (01:47):
Absolutely. So we thought we'd consult an expert for this topic. So we asked Ben Rhodes, who is an Assistant Director in the Office of Financial Aid and Scholarships to give us some information on a program that we have here at grand Valley called, called Money Smart Lakers. He oversees that program. And so he shared just some information about the program and about personal finance in general. So take it away, Ben.
Ben Rhodes (02:12):
Hello. So the first thing I want to introduce myself, my name is Ben Rhodes and I've worked for grand Valley financial aid office for going on about 12 years now. I supervise both the customer service team and the money smart Lakers program. And that's what I want to talk about today is the money smarter Lakers program. The money smart Lakers program is housed in the office of financial aid. And it's a program that helps to educate students on financial literacy topics, such as budgeting, crediting, investing, loan repayment. And this year we're also going to explore financial support as it relates to emergency funding like building an emergency fund and also financial support reaching out to resources when the economy is difficult. We, we do hold one-on-one appointments. And those are traditionally in-person. However, obviously this year we're going to be conducting those virtually either over the phone or through a zoom appointment.
Ben Rhodes (03:06):
Why do we think it's important that GVSU students use the resource? Well, we believe that GVSU students would greatly benefit from the materials, the resources, the information that our programming and our team provides. I mean, you're here at GVSU to become an expert in your field of study. So then maybe that's teaching maybe that's nursing or literature, or you know, all the other majors that GVSU offers, but there are so many other life skills and soft skills that really become essential in your success after GVSU. And one of those is understanding your finances becoming financially independent. Those are one of the skills that we think are important to have after you graduate from GVSU, especially if you've borrowed loans, student loans, which most of our student body has. And so that's really why we think the money smart program is a, a good benefit to GVSU students. I it'll help you to understand your personal finances better, and then you can work to become an expert in that as well.
Grace Pushman (04:13):
We're going to look at some tools that Ben will suggest for students to use, to help them with their financial health.
Speaker 2 (04:18):
The first step is understanding loan borrowing roughly about 80, a little over 80% of college students borrow a loan. And that's definitely the statistic here at grand Valley as well. And so it's important that you understand the loans you're borrowing. It's important that you've had a conversation with your servicer already and figured out who is what organization is managing those loans. And then lastly, it's important that you start managing those taking ownership and maybe it's early repayment, or maybe it's just making sure, you know, the amount that you've borrowed, but taking ownership can really help you to manage those in the future as well. If you haven't yet visited the government loan database, we would encourage you to do that. And that resource, it's it [email protected], again, that's all one word student aid.gov. You can navigate there, or you can go directly to the website using nsld.ed.gov.
Ben Rhodes (05:24):
And again, if you haven't used that resource yet, we would encourage you to do that. If you are borrowing loans at college, another skill for college students that we think is important is exercising weekly, monthly budgeting. A lot of students don't do it. It's actually a very small amount of college students that have weekly budget plans. Now there are hundreds of apps that you can download on your phone and even more programs that you can download on your computer. You can even just start making a spreadsheet on Microsoft Excel or writing, maybe in a checkbook format, like a notepad your expenses, but having a handle on your spending can, is a really good first step for becoming financially independent. When you know what you spend, how much you spend in, what you spend it on, then you can start budgeting, you can start planning and maybe you can even start saving because maybe you don't spend money on a particular item.
Grace Pushman (06:26):
And yes, I want to stress how important budgeting is, because I know that, you know, I've been working as a professional for the last seven years, but even so I just started budgeting my own groceries and food. And so that has helped me save hundreds every month, just simply by tracking how much I spend and trying to set a daily budget for myself. And it's like, I don't feel like I'm losing out on anything. I still feel like I'm eating what I want to eat, but I'm just being smarter because I'm paying attention. So I feel like that's one of the biggest tips, and I know that as a college student, I didn't do that. Megan, did you budget?
Megan Riksen (07:00):
Oh my gosh. No, not at all. And it's, because I think you think I don't all the money I'm making is going away anyways. So why would I budget? But I think there are ways to, to carve out some of that money that you probably don't need to spend if you're more aware. Yes.
Grace Pushman (07:24):
Yeah. That's the key. It's just like tracking it and being aware. And I think you'll be surprised at what you find with that. Yes, absolutely. And let's pass it over to Ben. One more time to finish telling us about maybe some of the common mistakes that he sees a lot in working with students and their financial health
Ben Rhodes (07:44):
College students are at a unique time period where they have the opportunity to begin to apply to credit cards. And for many students who don't have their personal finances figured out that can become a problem. If you're not fiscally responsible than using credit cards as a surefire way to start accruing expensive debt. And so we see that with college students who banks private lenders are gonna offer college students credit cards, even at an orientation or even coming on to campus. And again, that can be a big pitfall for students. Now, if a student is financially secure and stable and is responsible in terms of budgeting than a credit card can actually be a benefit because it can, it can have a positive impact because it is starting to improve that college student's credit score. We just encourage students to, to limit the purchasing on a credit card, maybe two, one or two common normal cost items, such as gas or a phone bill or groceries, but only that so long as it can be paid off each month. And you're responsible about making sure it's only those one or two, a normal ticket items that can be a big benefit for students in terms of budgeting their credit.
Megan Riksen (09:13):
Great. Thank you, Ben. We really appreciate your contributions to this episode, and that was just a ton of great information. I loved hearing Ben talk about the, the use of credit cards, especially as a student. I know when I was in college, I didn't have a credit card because I thought credit cards were bad because then you're paying this crazy interest rate and I can't afford that. Why would I want to do that? But I think his point about starting to really build your credit as long as you're being smart with your credit card and paying it off every month, only using it for money that you actually have that you can cover your, your credit card expenses is, is a really smart thing to do there.
Grace Pushman (09:59):
Yes, definitely. I think my first credit card, I was 22 and I had, I wished that I had started earlier because now when thinking about my credit history, that's a part that, you know, you can kind of look at your credit report and see how you're doing. And my credit history is shorter than it could be, which impacts your credit score. So, you know, the earlier you can start with that. If you know, you can be smart about it, I think the better. So just keep that in mind for sure.
Megan Riksen (10:23):
Yeah, absolutely. So I think we, we've got a lot to keep reflecting on. I know this is certainly a topic we all keep learning about throughout our lives. So hopefully we've given you a little bit of inspiration and Ben has inspired you to of course, connect with Money Smart Lakers. But just also, yeah, kind of having your own awareness of the things that you can be doing now, even as a college student to contribute to your overall financial health. So as always, we'll be, we'll be putting any resources that we've mentioned throughout the episode in the show notes for you. And thank you so much for listening.