What I learned from my biggest financial mistake.

22 October, 2018

One of my most notable financial mistakes happened after I graduated from college. Surprisingly, it wasn’t my first student loan bill that came in the mail, or the fact that I had to adjust to living off an entry-level salary in a big city. For me, my financial struggle came from the misconception that my lack of credit history was going to set me back. After graduating with my Bachelor’s degree, I was able to pay off my student loans thanks to some savings I had from working over the summers in high school. While I was thrilled for being able to pay off my debt so quickly, I soon realized that was the only type of credit I have ever had. 

When I went to check my credit score, I was discouraged to see my score fell somewhere in the lower 600’s. A small panic started tightening in my chest. Why didn’t I take out a credit card and start using it earlier in college so I would have great credit now? I didn’t understand that just because I had an average credit score now, didn't mean I was going to have an average credit score forever... and that I could work on building that over time.


I remember feeling as if I had to make up for lost time.I quickly called my bank in my hometown and asked them to send me a couple credit card offers in the mail. I decided to apply with Capital One, but due to my average credit score, they offered me an account with 24.9% APR. At the time, I really didn’t understand if this was a bad or good rate, I just assumed it was normal. 

I quickly started charging purchases to the card. I went to buy some clothes at JC Penney, I bought a tank of gas, and some groceries. In my first month, I had charged about $83 to my card. Easy enough. I could get that paid off by the due date, no problem. I thought I had gotten the hang of this credit card thing.

It wasn’t until months later that I was out shopping and was being bombarded with the store credit card offerings –“Would you like to save 40% off your total order today by opening up a rewards card?” Who wouldn’t want to take advantage of those savings? The deals were almost too good to be true. Hook line and sinker, I took the bait. Had I read the fine print, I would have found out that the store credit card interest rates are sky high! And paying interest for materialistic things is not fun.


Since I was new to using credit cards, there were a few months where I wouldn’t pay my balance off in full, but I kept using the card. By only making the minimum payment, I was delaying the pay off by months, even years. It was at that moment I knew I had to take control of my credit card debt. I stopped using the cards every time I went shopping, and instead, tacked more onto my minimum payments to get the balances paid off sooner.

Going a little “overboard” with credit cards after college turned out to be a my biggest financial mistake. I was in such a hurry to establish and build my credit history when I truly didn’t understand how credit worked. If I had just used my first credit card for a few more years, (and paid it off in full every month), I could have built up a decent credit history without feeling the need to juggle multiple cards at once.

In fact, the age of your accounts makes up 15% of your credit score. If the average age of your accounts is not very long, it's just going to take time to build that up. The "age" of your account refers to when you initially opened the account. That's why it's important to not close your oldest account. This graph explains the different ranges that can effect your score. Don't be worried if you fall into the "poor" category -time is on your side with this one.


Knowing what I know now would have saved me a lot of worry and money, but it has helped me make smarter financial decisions. I may have learned the hard way when it comes to managing credit cards but behind every mistake is a hidden learning opportunity. I am choosing learn from my mistakes and not let my past define my financial future! In summary, you don't need to juggle multiple credit cards to build credit quickly. There is no need to panic! Your score will get better over time. 

How much do you know about credit cards? Look at our website here to learn more! https://www.loaneducation.iastate.edu/credit#view-credit-score

How to save money on a tight budget

24 September, 2018

Living paycheck to paycheck (or financial aid refund to refund…) can be a tiring cycle. You may think that there is NO room in your budget to spare even $20 a month for savings. However, most students forget that you can start small when it comes to saving. Breaking large amounts into smaller portions makes saving seem less daunting. Let's say you commit to saving $5.00 a week. That commitment can turn into $20/month easily by deciding to cut out one $5 purchase a week. Let's be honest. We all spend at least that amount per week (maybe even more) on things we don't necessarily need. Here are some more ideas on how to save money on a tight budget:

1. Find small savings that add up.
Maybe you’re feeling short handed at the end of the month but you don’t know why? Start tracking your spending. You may be unaware of all the little things that add up quickly. The daily coffee on campus, the vending machine snacks, and going out for lunch a few times a week. While those purchases may only be $2.00 - $5.00 at a time, they add up quickly. Those spending decisions alone may be the reason you’re not finding any extra money for savings in your budget. Try cutting back on those small daily purchases and you will see the difference!

2. Comparison shop to find the best prices.
On the note of going out to eat, your #1 solution there is to grocery shop for your food so that you can make coffee, snacks and meals at home for a fraction of the cost. In our last blog post we talked about grocery shopping at Aldis and how cheap their prices are and it's because they don't sell name brands. There are many benefits to buying generic products over brand name. In most cases, the generic versions are made up of the same materials or ingredients as the brand name. While the price difference can sometimes come down to pennies, those decisions add up over time. When buying other items, compare prices at Walmart, Amazon, Ebay, etc. to make sure you’re getting the best price.

3. Sign up for automatic transfers for savings.
Your bank or credit union usually offers this, and it’s as easy as 1-2-3. Simply log into your account online, and set it up for a small amount to be transferred from your checking account to your savings account automatically. This happens without you having to remember to “put into savings,” and that small amount adds up in no time! Remember, savings accounts are not ‘put and take’ accounts. The idea is that this money is set aside only for specific purchases. Don’t dip into the account unless you absolutely have to for emergencies.

4. Use a coffee tin for all your loose change.
Your grandparents can totally get behind this method. Spare change adds up quickly. Next time you’re emptying your pockets, find a canister or jar to put your change in. This may be the easiest and most effective way to save your money. Bonus points if you put away a dolla dolla bill, y’all! Mega bonus points if that made you remember the old Akon song called “Dolla Bill.” :) Hmmmm are we sounding old, yet? I just found out that song came out in 2009 thanks to Google... May have been before your time but you get the point!

5. Don’t be afraid to use coupons.
This one may speak for itself, but it’s a good habit to get into. I don’t know about you, but I hate paying full price for stuff. Sites like Retail Me Not or Groupon can have discounted activities and coupon codes for shopping online. Apps like Ibotta & Drop also make it easy to get money back on purchases you already make at large retailers and restaurants. Check them out!

The truth is –small savings add up to big savings over time so don't get discouraged whether you're putting away $5 a week, or $5 a month. You're still saving more money than the next student who isn't saving at all. :) Happy Monday, all!

The Do's and Don'ts of Living Off Campus

11 September, 2018

It can be a big transition to go from living in a dorm room and having an unlimited meal plan, to having a monthly rent payment and (gasp!) going grocery shopping. If this is you this Fall, you’re not the only one who feels like their budget is taking a hit.

Here are the Do’s and Don’ts of living off campus so you can save some money!

1) Don’t pick the most expensive apartment.
This one may seem like a no-brainer, but if you’re feeling like your money is going to run out by the time December hits, it’s probably because you’re paying too much for rent. You may have already signed a year lease on an overly priced pad, but it’s not too late to start looking for more affordable options for next year. Most 2019-20 housing contracts will open up late this winter, so it’s never too early to start looking at other places with your roommates. Yes, a 3 bedroom apartment on Lincoln Way is convenient, close to campus, has a pool, etc. but it can cost you upwards of $700/month. There are cheaper apartments in West Ames that are a fraction of that price, usually between $350-$400/month per person so keep your options open!

2) Do create a budget for off campus bills.
Depending on your lease, you may also be juggling other bills in addition to your rent payment, such as utilities, parking, trash, etc. The amounts can vary depending on the utility type. Maybe you signed a lease on an older house close to campus, and you are prepared to pay that expensive heat bill in the winter, or maybe you’re not! (Brrrrr…) Either way, make sure you’re not blindsided when those utility bills come in the mail, or if your landlord expects you to pay them separately. Track them every month to get an idea for how much they cost, and discuss with your roomies how you plan to split everything. A part time job during the school year is a great way to earn some extra cash to help pay those off campus bills and keep your budget on track.

3) Don’t furnish your new pad with expensive stuff.
Are you seeing the trend here? The words off campus + expensive should not mix. :) That especially applies to buying furniture! You don’t need a fancy new bedroom set from Homemakers that will cost you an arm and a leg. Try buying your new furnishings second hand, or renovate your own from swap sites like Facebook Marketplace or Craigslist. Another tip: Be on the lookout this summer when other students will be throwing out their old and busted furniture to the curb when they move out. Don’t be afraid to dumpster dive, kids! Just kidding. Or are we? :)

4) Do go grocery shopping.
Take it from us, ISU dining meal plans and going out to eat for lunch gets expensive real quick. While there is nothing wrong with surviving off ramen noodles, mac & cheese, and frozen pizza, think about learning how to cook and do a little meal prep before each week. Aldis is a great grocery store option since they can offer cheaper prices than what you’ll find at other supermarkets. They may have a smaller selection with minimal name brands, but your wallet will thank you. Invest in a nice cooler so you can take sack lunches with you to class so you’re not tempted to stop at Fuzzy Tacos on the way home!

5) Don’t get stuck paying two rents.
This one is also a simple no-brainer but is a common off campus problem for students. If you’re going to be taking off this summer for an internship but you signed a year lease until August 2019, make sure you advertise early that you’ll be subleasing your room, or find a friend to take your spot. It would be a bad financial move to try and pay rent at two places, or even worse, having your roomies make up the difference. Plan ahead to make sure you don’t get stuck in this dilemma. Talk with your property owner to explore options for subleasing, and get the word out there!

6) Do talk with your roommates.
If you’re feeling the financial pressures of living in an expensive off campus arrangement, chances are your roommates are feeling them too. You and your friends may have been so stoked to move off campus that you never truly considered the overall cost, or maybe you weren’t sure what you were signing up for. If no one wants to move except you and you feel stuck, refer back to point #1. It’s never too early to start looking at other housing options (or roommates) for next year!

7) Don’t live by yourself.
Unless you’re living in the basement of your grandma’s 2nd cousin’s house for dirt cheap, don’t live by yourself. In Ames, this can be a costly decision. Usually students justify living by themselves in college because they “don’t like roommates,” or they “have pets.” Speaking of which, having pets in college should be another ‘don’t’ on this list but we’ll save that one for another time. One bedroom apartments are not cheap in Ames, so try and save money by finding a roommate or two! You can live by yourself when you graduate and are able to make more money to pay for the one bedroom.

Well, guys, that’s all for now. If you need help creating an off campus budget, we can help with that. Schedule your budgeting appointment through ISUappointments today!

Do you know your credit score?

30 August, 2018

Consumers who check their credit score regularly are more likely to understand how scoring works than those who don’t, according to a new survey released by the Consumer Federation of America and VantageScore. The survey also reveals that, over the past four years, the percentage of consumers who have recently obtained their credit score has risen significantly.

Whether you’re intending to use your credit soon, or simply looking for ways to improve your own credit score, here are things you should know about that magic three digit number.

1. Missed payments can lower your score.

Did you know that if you miss a payment on your credit card, car loan, or student loans your credit score can go down? Payment history is one of the major components of your credit score. It’s 35% of your score to be exact. When you pay your bills on time each month, your credit score will gradually start to increase. If you miss payments or your bill is sent to a collections agency, your score will decrease. Try and elect into auto-pay (when your payment is auto withdrawn from your bank account). This can alleviate any missed payments in the future and you don't have to kick yourself for being forgetful! It's a win-win.

2. Keeping a high credit card balance lowers your score.

Yes, carrying a high credit card balance month to month can harm your credit score. Credit utilization is the percent of your credit limit that you use each month, and your credit utilization ratio is a key component of your credit score. Try and keep your credit card balance under 30 percent of your overall credit card limit. For example, if you have two credit cards that each have a limit of $500, your total available credit is $1,000. In this instance, you will want to keep your balance below $300, or 30 percent.

A large credit card balance can also feel overwhelming to pay down. When you aim for a low balance and pay your bill in full each month, you get a fresh start each billing cycle. And the best part –you won’t have to pay any interest on your purchases!

3. Checking your credit report will not change your score.

Annual check-ups on your credit reports will make sure they are error-free and won’t impact your credit score. This can be done for free each year at www.annualcreditreport.com. They’re going to ask for some pretty personal information, but they do that to ensure it’s truly you who is requesting the report. Be sure to shred the report when you’re done with it, or keep it in a safe place.

Additionally, many financial institutions will let you check your credit score online for free. When you regularly monitor your score, you can see how your financial decisions are impacting your credit potential. If a financial institution is pulling your credit information to make a lending decision, those are hard inquires and can lower your score by a few points. Too many ‘hard’ pulls like this can look concerning to other lenders, so make sure you time the inquiries appropriately. For example, if you’re in the process of applying for a mortgage, it’s probably not a good idea to take out a car loan and apply for a credit card at the same time. 

Credit karma, Credit Sesame, and many of the budgeting apps are free for you to use and will provide your personal credit score and information. You should never pay to view your credit score!

There are many other factors that can impact your score, but these are some of the big ones. If you have any questions about some of the above information, don’t hesitate to shoot us an email or call us at our office 515-294-0677.

Keep on building those credit scores!

6 Things high school grads need to do before coming to college

31 July, 2018

We hope you have been enjoying your last summer before your freshman year starts! Soon, you'll be packing up your belongings and making the road trip to Ames to move into your dorm. Meeting your new roommate and trying to fit everything into a room about the size of a shoebox will be a new experience for sure, and yes, your mom probably will cry. Make sure to tell her not to worry because you got this college thing figured out! (All thanks to reading this blog post too, of course.)

1. Finalize your financial aid
Your first year usually involves the most work when it comes to financial aid. You're signing for your loans for all four years, and authorizing your aid. It's important to follow our financial aid checklist on our website to make sure all the i's are dotted and the t's are crossed. Trust us, you won't want to get notifications from our billing office end of August saying that your Ubill is still unpaid... In the meantime, check your UBill on A+ and look at your financial aid award. Do you have enough aid to cover your bill? If things don't add up, let us know and we can help create a financial plan and make sure you know your options.

2. Find a part time job
If you have work study on your financial aid award -put it to good use! Most students work anywhere from 10-15 hours a week and the employers on campus are more than willing to work around your class schedule. This is a great way to make money, build your resume, and meet new friends! Work study is a need-based program that allows you to work on campus, and the employer doesn't have to pay 100% of your wages (work study picks up the rest). However, not all campus jobs require students to be work study eligible. Check out our student job board on A+ for available positions. There is something for everyone!

3. Prepare for a whole new world of time management
In high school, juggling your grades, sports & extra curricular activities was probably a breeze. College is a little different. Instead of being in class all day, you may have breaks in your class schedule, and you may not be involved in as many activities beginning as a freshman. You also won't have someone to wake you up, make you breakfast, and make sure you get to class on time. Set yourself up for success your first year in college by getting organized with a planner or calendar, (maybe an alarm clock) and find a system that works for you. This is your investment (and a costly one, at that) so manage it well. Our Academic Success Center is great at helping students manage their time better with offering many resources, such as tutoring and supplemental instruction for your classes. Give them a shout if you need it!

4. Embrace coupons and use your meal plan
Scoring deals is a great way to save money, especially when you're on a limited budget. You'll want to attend WelcomeFest, which is Wed. August 22nd from 5:30 - 8:30PM in the Great Hall of the MU. There are a TON of freebies and coupon books for the taking and you'll get to experience Ames local businesses, community organizations and ISU departments. Also, if you're living in the dorms, you're required to have a meal plan. We don't make the rules, we just enforce them. So the bottom line is, make sure you're using your meals! The dining plans cost an average of $4,000 a year, and the meals expire at the end of each semester if you don't use them (aka; money down the drain). For more information of meal plan usage and deadlines, check out ISU Dining's website.

5. Get ready to start applying for scholarships soon, and filing your FASFA
You won't even be finished with semester #1 when you'll start prepping for next year. Many scholarships will open up this fall and are due Feb. 1st, generally. There are applications you'll complete for scholarships offered from your college, and through our financial aid office. Don't forget to file the 2019-20 FAFSA by Dec. 1st, too. Now would be a good time to put these dates in your calendar (hint, hint!)

6. Find one club to get involved with
There are over 850 student organizations at ISU, and that number continues to grow. If you have an interest or hobby that you're passionate for, chance are -we have it! Is underwater basket weaving your thing, but not seeing it on the list? You can even create your own club! This is a great way to meet new people who share your interests, have fun outside of studying, and build that resume. All clubs and student organizations are mandated through our Student Activities Center, or SAC, where you'll also have access to lots of cheap student events, leadership opportunities, and fun hands on workshops.

It's okay if you haven't planned out every little detail before your arrival on campus, we just want you to be prepared! Hopefully these tips will help Iowa State feel more like your new home. We look forward to welcoming you to the Cyclone family very soon!

Help! My parents aren't helping me pay for college. How can I minimize my debt?

04 June, 2018

It’s never too early to start thinking about your financial plan for next year. I know days at the pool, summer vacations, and spending time with your friends seems waaay more fun but trust us, you’ll be glad you have a plan -especially if you’re flying solo when it comes to paying for college. More often than not, students and families who don’t create a financial plan for college are more likely to over borrow –putting themselves at risk for having a high debt burden upon graduation. If you are responsible for funding your own college education, it may seem that loans are the only option but we’re here to debunk that myth! Follow these tips to help minimize your debt :

Create a budget
All great financial plans start with a budget. If you do plan to borrow, this will help keep your borrowing to a minimum. If you already know your housing plans for this coming year, sit down and take a look at how much you will need per month – including rent, utilities, food, books, etc. Don’t forget to factor in the income you’re projecting to take home from your part time job. Are you planning to use your financial aid refund to help cover these costs? Use our Expenses Estimator tool to forecast your Ubill for next year and see what financial aid will cover.

Spend wisely
If your parents are leaving the college experience completely up to you, be sure you’re making wise spending choices. Don’t sign up for an off campus apartment that is $600/month and don’t get a meal plan if you don’t need it. Try and find affordable housing, and grocery shop for your meals. Yes, it’s okay to live off mac and cheese, frozen pizza & ramen if you have to! It may be tempting to use your financial aid refund and buy unnecessary things, but remember that money is intended to help pay your tuition, fees and living expenses only.

Accept your loans on a semesterly basis
Unless you know for sure you need the entire amount for Fall & Spring, you can hold off accepting the loans through your A+ account. If you decide you need the loan later on, we can always add it for you, or charge back the loan if you took out too much. Feel free to call our number at any time if you need help with this -->515-294-0677

Work full time in the summer
If you’re not taking classes this summer, chances are you have plenty of free time (refer to aforementioned “pool” time :) but we challenge you to work full time over the summer to help pay for your living expenses during the school year. If you find your financial aid refund and part time job income won’t be enough to cover your monthly expenses, this is a great alternative. If you’re living at home with your parents rent free this summer, try and save as much of your paycheck as you can so you can use that money to pay your rent. Saving money is key to any college financial plan!

Apply for scholarships
If you’re paying for your college education by yourself, the free money (AKA: scholarships and grants) is the number one way you can reduce your loan indebtedness. Always file your FAFSA every year by December 1st to be considered for priority aid (the automatic awards based on your need like the ISU grant) and fill out the FinAid Scholarship application through OneApp. Your college or department will also have their own separate application for their scholarships. The deadlines can vary, so look here to get an idea on timelines but generally, winter break is an excellent time to sit down and complete the applications. Don’t forget about the outside sources as well, like Fast Web and TFS.

Do you still need help creating your financial plan for next year? Schedule a one-on-one appointment with us! Email loaneducation@iastate.edu or give us a call @ 515-294-0677.

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