Western Oregon University Parent Guide
Financial Survival & Tips
Creating a Budget
The first step in creating a personal budget is distinguishing between needs versus wants. Tracking money spent is a good first step in understanding and developing a budget. A way to start tracking spending habits is to look at checking account information, bills/expense information, annual expenses and predictable expenses.
Some students have found it useful and enlightening to track money spent in a specific time frame. Provide your student with a notebook and tell them to track every dollar spent in a month. At the end of the month, look for trends in their spending habits and start to differentiate between actual needs and wants. Once you have a good idea of spending habits, put together a budget.
Credit Scores and Credit Cards
Many students may find it necessary to take out a private loan to help pay for school. Time spent in college will either ruin or enhance your student’s credit future. By adhering to a few good practices, your student will graduate from college with credit scores that can give them better loan interest payments. Credit reports are becoming increasingly important for:
- Qualifying for credit (i.e. purchase a car)
- Better interest rates on loans
- Renting an apartment
- Landing a job
- Better insurance rates
Credit scores are a snapshot in time based on a FICO score (350-850). The higher the score, the better rates you will get. Credit scores are based on:
- Payment history
- Amounts owed
- Length of credit history
- New Credit
- Types of credit used
Your student will become inundated with credit card applications. Many credit cards will offer a low introductory cost, and often offer prizes to sign up a student with a new credit card.
A mistake that students often make is applying for too many credit cards because of the “free” gift. A good rule of thumb is to have your student have one credit card, with a low credit limit, that is used sparingly throughout their college years.
Remember that length of credit history plays a role in the FICO score. To improve a FICO score a person must:
- Pay bills on time
- Stop applying for unneeded cards
- Pay down balances
Useful websites
Here are some useful websites in learning more about money management and credit scores.
