Recently, the Utah Higher Education Assistance Authority (UHEAA) called out to college and high students interested in blogging their college experiences and lessons learned in order to offer future students of higher education first hand facts and advice from today’s real life college setting.  If you are a current college student or high school student preparing to enter college and are interested in blogging for UHEAA, please send an email to ‘outreach@utahsbr.edu’ and we will gladly send you details.

The second installment in our “Real Life College Student” blog series is by Utah college student, Cole Spicker.  Cole currently studies Chemistry and Spanish.  He really enjoys reading, good food and great friends.  He admits that he is a little obsessed with education and hopes to make lasting, positive contributions to society.  We hope you enjoy this week’s blog on the importance of budgeting!

I shall be employing a bit of sarcasm to address today’s topic … please bear with me.  The process of starting and maintaining a budget can be summarized with a simple simile: budgeting is like popping a zit.  Allow me to explain.  An un-popped zit is unsightly and unbecoming—just like an individual with no budget and no plan.  However, one feels a great sense of relief and pleasure once the zit is popped, true?  Similarly, once we take the time to review our lifestyle and purchasing habits, map them out, and make crucial decisions that will lead to financial well-being—it too, can cause us to feel a great sense of relief and even pleasure.  Zits come and go and need constant attention, the same applies to a budget.  It needs constant care and attention.  So, there you have it – budgeting is like popping a zit.

The basics of budgeting for us college students are the same for any other individual.  Start with getting a blank piece of paper and draw two columns.  Decidedly review your expenses and income and list them in their corresponding column.  Expenses will include tuition, books, housing, gas, food, while your income will include savings from your summer jobs, financial support from your parents, financial aid from the school, scholarships, and income from your job if you have one.  Find the sum of each category.  If your income exceeds your expenses, you’re in fairly good shape … you can should consider setting aside a portion to a dedicated savings account.  However, if your expenses exceed your total income, you need to find ways to cut spending and/or increase your income.

Why budget?  Many feel that budgeting is an unnecessary and tedious task (especially if you feel that you’re financially sound).  However, countless individuals have reported that as they budget, they keep on finding new ways to cut spending, uncovering hidden cash flow problems that might free up even more money to put toward your other financial goals.

Keeping a positive attitude and staying motivated are two ingredients for a successful budget.  Think about the rewards of sticking to a budget.  What do you have to gain?  Will you be able to finally have enough money to purchase a motorcycle or car (or a new stereo or iPad 2)? Another thing about a budget: have realistic expectations.  Unrealistic expectations are budget killers.  If you set your sights too high, you only become discouraged when you fail to reach them. While it is admirable to try and accomplish great things, you need to set goals that are challenging, yet realistic.

There are many sites that aim to help college students prepare and execute a budget.  In fact, UHEAA has its own budget worksheet that will help you begin such an endeavor (http://www.uheaa.org/parentStudent01c.html).  Another impressive tool that can make a huge difference in your financial life is Mint.com.  They also have free apps for download on your Smartphone, iPhone or Blackberry.  Mint can be linked to your debit and credit cards; it can then categorize and measure your spending habits, alerting you whenever you make purchases that exceed your budgeted amount.  It’s awesome when you can actually see how much you spend.

A college degree does not guarantee sound budgeting skills.  It’s a process and needs continual work – and above all, discipline.  And the time to start is NOW!

Find our “Real Life College Student” blogger, Cole Spicker, on Facebook and Twitter.

From UHEAA: A couple of other great resources on Financial Literacy and budgeting:

• FinanceInTheClassroom.com: Providing high-quality personal finance materials for K-12 educators, students and parents, Finance in the Classroom is the place to help you prepare Utah’s youth to be money smart.
• UtahFutures.org: Check out the “Reality Check” feature to evaluate your budgeting and financial planning.

If you have any questions or comments for Cole, please add them using the comment box below and he will gladly reply.

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The first installment in our “Real Life College Student” blog series is by Utah college student, Cole Spicker.  Cole currently studies Chemistry and Spanish.  He really enjoys reading, good food and great friends.  He admits that he is a little obsessed with education and hopes to make lasting, positive contributions to society.  We hope you enjoy Cole’s debut UHEAA blog about being a financially savvy college student!

First of all, I am elated to be a part of the Utah Higher Education Assistance Authority (UHEAA) in my capacity as a college student blogger.  While Mr. Ollivander from Harry Potter and the Sorcerer’s Stone did not whisper in my ear “I think we can expect great things from you,” I sincerely hope that some information provided in this blog can be of use to you — and that you can author some “great things.”

College is, for the majority of students, the first chance to make financial decisions on our own.  Often, these decisions can have life-long impacts and can serve as a foundation for future, financial-related decisions.  In other words, NOW is the best time to develop the right skills for a financially secure future.

Most high school students have a little spending money, either from a part-time job or an allowance.  This can present a problem since few students are faced with “real life” living expenses.  As such, high school students can easily start their way down a rocky path of developing spending habits that become unrealistic when they must support themselves.  Once down that high-spending path, it can be an arduous, even strenuous, task to demonstrate self-restraint.

A recent nationwide survey discovered that the majority of college students possess three credit cards with an average balance of $1,000.  Many students reported that they did not feel like they were spending “real money” when using credit cards.  Furthermore, many feel that as long as they are meeting minimum payment requirements, they are in good shape.  However, let’s consider the following situation:

An incoming freshman college student goes on a shopping spree and decides to make the purchases on the handy, dandy credit card … after all, you have got to look good for those girls (or boys)!  At an interest rate of 18 percent and paying monthly minimum payments of $20, this student will incur an additional $860 of debt — solely from interest.  What’s more — this particular student will finish his bachelor’s and master’s degree before paying off this acquired debt.  Of course, minimum payments will only become more expensive if he continues to use that piece of plastic.

If you’re a student and choose to have a credit card, try to get one with a lower spending cap and use it only for emergencies.  Issues of health or provisions — amongst other basic needs — need to be met and are of extreme importance.  Credit cards, if managed properly, can be of great benefit when trying to attain exceptional credit scores. So, the bottom line: If you get a credit card, be financially sharp!

If you fall under the category of having a financially burdensome habit (Girls: 4-5 pairs of shoes are all you need!  Boys: One or two burritos will suffice for dinner—not a dozen), seek the necessary help.  If you feel your parents can help you, call them.  Take some financial literacy courses at the collegiate level.  If all else fails, make an appointment with a counselor at your college or university.  Only good can come from finding a way to remove those habits that drain your wallet.

A word to the wise: create and adhere to a budget — but we’ll discuss this totally awesome (and hip, mind you!  I know for a fact hip people love budgeting) topic next week.

Find our “Real Life College Student,” Cole Spicker, on Facebook and Twitter.

If you have any questions or comments for Cole, please add them using the comment box below and he will gladly reply.

Yesterday, we received a letter from one of the winners of the scholarship thanking us and describing the goals that we are helping her to reach, and I think that some of this bears repeating. The winner (whose name I am not including to protect her privacy) writes:

“This letter is written to thank you for your financial assistance in the form of a $1,000 Utah Jump$tart Coalition scholarship as I begin my university career at BYU this fall. I am most grateful for your generosity. As a serious student who recognizes the great worth of an excellent university education, I would like to tell you something of my academic goals.

I plan to major in Communication Disorders which is divided into two related fields, speech language pathology and audiology. The first helps people develop their communication skills or otherwise rehabilitate those who may have lost those skills. The second deals with the measurement of hearing and hearing impairment. I look forward to specializing in one of these areas and perhaps going on to graduate work.

Thank you again for making my college education possible. I can assure you that I plan on making the most of it.”

Although the $1,000 scholarship seems small standing on its own, in context, these are a few of the things it could pay for:

1. Approximately 25% of a year’s tuition at BYU.

2. Books and supplies for two semesters.

3. An up-to-date laptop for this student to use at school.

Reading her letter, my own eighteen-year-old anxieties and fears came back to me in a rush. I, too, paid for my education with a patchwork of different scholarships. Without any one of those opportunities, I might not have made it. In fact, when one of my scholarships ran out right before my very last semester, I almost did leave school. Where I stand today, a $1,000 scholarship doesn’t seem very big. But remembering where I stood years ago, when $1,000 was the difference between graduating or not, I again feel the gratitude and the hopefulness of that education placed within my reach.

When I think about why I am a part of this field and why I love this work, I need look no farther than this. This person’s education will help her to grow in ways she hasn’t yet anticipated yet, and eventually, she will work with disabled or injured citizens as they strive to improve their lives. And although UHEAA’s direct contribution to her experience may be small by itself, it puts her one step closer to success on her own terms.

Most of all, I want to thank her for taking the time to write to us and remind us that small contributions matter.

• Health insurance: if you can land a job with benefits, excellent! If not, you might be able to stay on your parents’ health insurance until you are 26. Having an insurance plan is always a good idea, if possible. One big health crisis can set you back financially, sometimes for years.
• Banking and debit cards: read thy disclosures now, and save thyself from pain down the road. Know what kinds of fees are charged, especially if your bank lets you overdraft your account.
• Credit cards: see above. Reading disclosures thoroughly is a very, very good idea. Make sure you know what you’re getting into before you sign up for a new credit card.
• Student loans: know your options! Average student loan debt loads have climbed dramatically in the past years, and handling it wisely can save you a lot of grief, not to mention preserve a good credit score. Keeping in touch with your student loan servicer will give you an avenue to ask questions and find out about the best repayment choices.

No matter what you do, the choices you make with money in your post-graduation months will have an impact on your life for years to come. Put your newly minted diploma to work and make wise decisions!

The National Financial Capability Challenge is sponsored by the President’s Advisory Council on Financial Literacy. It gave Utah a 76.78 percent, well above the national average of 70 percent.

The Utah State Office of Education says it’s gratifying to see Utah students scoring above the national average and taking fifth place.

?Click here to read the article on KSL.com.

Nelson Cook from Wayne High School submitted an outstanding essay on the practical use of hedging for a family-owned dairy farm operation.

Dani Peterson from Mountain View High School wrote accurately about the perils of credit card use for teenagers.

Kara Vickers from Riverton High School wrote about an insightful essay about the link between perceived social status and reckless spending habits and  debt accumulation.

Camille Jones from Springville High School discussed economic theory, rationality, and financial decision-making.

Nicholas Roising from Park City High School wrote a well-researched essay on repayment options for student loans.

Congratulations to our winners! These students have demonstrated a firm grasp of important financial literacy concepts, as well as a willingness to explore beyond the classroom curriculum and research independently. Each student will be presented with a plaque and a $1,000 scholarship for higher education.