Summer Activities That Won’t Break The Bank

If you are like most college students, you look forward to the relaxation and warm weather that comes with summer break. However, if you are on a budget it may be disheartening to not be able to go on extravagant vacations like your friends.

It may not be the beach or traveling to another country but here is a list of budget-friendly ideas around Bowling Green to fill up your summer.

Camping

  • Bowling Green KOA Holiday

Beech Bend Park

  • Adult Admission – $37.99 
  • Child & Senior Admission – $31.99

Dinosaur World 40 min drive

  • $8 per person due to COVID-19

Hiking

  • Shanty Hollow Trail (not pictured) – 40 min drive (free)
  • Lost River Cave – (hiking trails free)
    • Boat Tours
    • Adults (13 +) – $19.95
    • Youth (4-12) – $16.95

Children (3 and under) – $5.95

Mammoth Cave

  • Various tours
  • Adults – $17.00
  • Youth (6-12) – $12.00

Drive-In

  • Franklin Drive In – 30 min drive
  • $15 per carload per movie

Escape Rooms (not pictured)

  • Price varies

Museums

  • Corvette Museum
  • NCM Motorsports Park – Go Karts
    • Temporarily closed due to COVID-19
    • $20 per race + $5 per passenger

Historic Rail Park and Train Museum (not pictured)

  • Temporarily closed due to COVID-19
  • Adult – $14
  • Senior – $12
  • Child – $8

Aviation Heritage Park

  • Free

Riverview at Hobson Grove

  • Temporarily closed due to COVID-19
    • Adults – $7.00
    • Family – $14.00
    • Students K-12th grade – $2.50
    • Children under 6 – free
    • Veterans – $5.00

Baker Arboretum & Downing Museum

Hot Rods Stadium

  • Availability may vary due to COVID-19

Scavenger Hunt

  • Geocaching
  • Let’s Roam Bowling Green Scavenger Hunt: The Hills Are Alive!
  • Adults – $12.31

Student Loans Demystified Part 3: Student Loan Repayment Strategies

Repayment of your student loans can be a daunting task. However, repayment is achievable and many students successfully accomplish this task each year. The best-case scenario would mean that a student loan repayment strategy begins while a student is still in school. This blog post will provide 5 steps to establishing a repayment plan.

Step 1: Estimate the dollar amount of student loans you are on track to borrow while in school. To arrive at this estimate complete simple addition of how much you would have borrowed by the time you graduate if you were to continue to borrow at the same rate each semester.

With an estimate of how much you will borrow while in school you can utilize an online student loan calculator to get a rough estimated calculation on what your monthly repayment amount would be after graduation. To get a more accurate estimate we encourage students to meet with one of our financial coaches and build a projected repayment plan.

We encourage students to weigh this monthly payment amount against what there expected salary (in the career field they have chosen) and cost of living (in the city they would like to live in after school) will be upon graduation to determine whether the amount they are borrowing is an affordable amount.

Step 2: Start repayment of your student loans early. Students are able to begin making payments on their student loans prior to graduating to reduce the balance and get ahead. The steps for a student to make an online account with their loan servicer to make payments are outlined in part 1 of this blog series.

When you graduate or go below half-time as a student you are given a sixth month grace period before you are required to make your first payment. If a student has not already started making repayments we advise that students make payments during the grace period. It will allow the student to get ahead and reduce the monthly payment amount during the repayment period.

Step 3: If I am able to begin making payments early or I am to allocate additional dollars above my required monthly payment amount which of my student loans should I put the money towards? We suggest picking your student loan with the highest interest rate to allocate early or extra payments towards as this reduces the amount of interest that you will pay back over the duration of the loan and save you money

Step 4: Entering Repayment Phase. As mentioned previously six months after graduation or dropping below half-time payments will come due. It is most essential that you prepare ahead of time to make sure that your budget is prepared for the new monthly payment required. A common mistake the graduates make is adding too many fixed expenses to their budget in the six month grace period prior to their loans coming due. This then makes repayment difficult even when a graduate has begun a decent paying job. We strongly encourage students as soon as they land a job to create a space in their budget for their student loan payment.

Secondly, you must decide which repayment plan to choose. Access to the different repayment plan options that you have will be found either by logging into your student loan service account or speaking with a student loan servicer representative.

There a four repayment options that are most common. The standard repayment plans, graduated repayment plans, extended repayment plans and income-based repayment plans.

Standard Repayment Plan: Unless you request an alternative payment plan you usually will be enrolled in the standard repayment plan. This plan means that you will be expected to make a monthly payment for ten years. This means 120 equal payments to pay off your students loans. As with all of the payment plans you are able to make additional payments to reduce your loan balances and pay them off early. We advise students to utilize this payment plan if at all possible. This is because this particular plan will cost a student the least amount of compounded interest charges.

Extended Repayment Plans: These particular plans allow you to extend your payments out over 20 to 25 years. This plan means that your monthly payment will be a reduced payment. It will be either 240 or 300 monthly payments. This repayment plan is kinder on the monthly budget but will cost much more money through more interest compounding over the duration of the loan

Graduated Repayment Plans: These particular plans start with monthly payments that are lower at first and then increase over a ten year period. The payments towards the end of the ten years will a much larger sum. In some instances this plan can expand beyond ten years. Once again this plan is friendlier to a monthly budget at the beginning. If you opt to use this plan it will cost more money over time than the standard repayment plan due to more interest accruing at the beginning portion of the repayment plan.

Income-Based Repayment Plan: There are a number of different forms of this plan. All of the plans of this nature determine your monthly payment amount based off a percentage of your income to ensure to that the payment is affordable. This payment plan takes anywhere from 15 to 25 years of monthly payments to complete. As with all of the plans mentioned except the standard repayment plan choosing this plan will mean additional money will be paid in interest. If you are eligible for the public service loan forgiveness program one of these payment plans may be good for you.

Step 5: Begin making payments! You can do it. Don’t lose hope. Remember, the more proactive you are on the front end with planning and attempting to minimize borrowing while in school the more money you will save! Here is one final tip to save you money. If you schedule an automatic electric monthly payment from your checking or savings account, you receive a 0.25% interest rate deduction on Federal Direct Loans.

We are here to help. If you would like assistance building a plan to minimize student loan debt and repay your student loans the WKU Center for Financial Success is ready to help. Click here to schedule a free financial coaching session today!

If you haven’t had a chance to read the previous posts in the Student Loans Demystified series catch up here:

Student Loans Demystified Part 1: Where do I start?

Student Loans Demystified Part 2: Terminology Simplified

Understanding a Credit Card Statement

We were going to put together an article that explains everything you need to know about a credit card statement. However, in the process of researching we found their already to be an excellent article in this area!

Check out the link to this article by thebalance.com on understanding credit card statements! https://www.thebalance.com/how-to-understand-your-credit-card-billing-statement-960246

The only important item the article from thebalance.com leaves out is the concept of the “grace period”. The grace period is the time between the end of your credit card’s billing cycle and the due date for that billing cycle. This is typically about 21 days.  As long as you pay off your card’s balance by the due date then you will not experience any finance/interest charges. If you do not pay off your balance in full by the due date then you will immediately be charged finance/interest charges. These charges will continue until you have paid your balance of in full. The interest rates are steep on credit cards. Sometimes almost 30% so make sure and pay that balance off completely if at all possible!

Make sure that before you apply for a credit card it includes a grace period for purchases! Be aware that even if a credit card includes a grace period for purchases there still might not be a grace period for cash advances and balance transfers.

As always remember the rule of thumb for using credit cards! Before using a credit card make sure you have 1) a written budget, 2) you are tracking your expenses to ensure your budget is being implemented and is realistic and 3) Spend multiple months getting comfortable with steps 1 and 2 before getting a credit card.

If you would like to read more on credit cards check out these two recent articles we recently posted “Don’t Trust The Card or Yourself Without a Plan” and “The Process for Getting a Credit Card”

Understanding Your Credit Score

Credit Score defined:  A number that helps lenders determine creditworthiness of a borrower.

Background on Credit Scores: There have been multiple algorithms developed that determine an individual’s credit score. The most common score used by lenders to determine creditworthiness and interest rates is the FICO Score or more appropriately a version of the FICO score (there are multiple FICO scores). The FICO Score was developed by the Fair Isaac Corporation in 1989.  MyFico.com makes the claim that a FICO score is used in 90% of lending decisions.

The second most commonly used score is the Vantage Score. Credit Karma, a reputable credit resource website that uses the Vantage Score, states that over 2000 lenders use the Vantage Score to determine credit worthiness. Most of the online free credit scores come from the Vantage Score formula. While for the most part this score is educational (in that most lenders use the FICO Score) it is still accurate and close to the FICO Score. The information gained from the Vantage Score most of the time will provide the information needed to improve an individual’s score.

How the FICO Score is Determined

The primary FICO score is on a scale of 300 to 850. It is has been determined that a score of 580 or lower is “poor score”, 580-669 is a “fair score”, 670-739 is a “good score”, 740-799 is a “very good score” and 800+ is an “exceptional score”.

 

The Fico Score is determined by 5 factors. The factors and percentage weight of each factor is as follows: 30% Amounts Owed, 35% Payment History, 10% New Credit, 15% Length of Credit History, 10% Credit Mix. The three credit bureaus Experian, Equifax, and Transunion provide the information that FICO uses in each factor to compute the score.

30% Amounts Owed:

This refers to the amount of credit an individual has used compared to how much available credit that they could use. Using credit each month for purchases will not necessarily a make a credit score go down in fact utilizing credit each month can potentially improve the score whereas not using any credit will not cause the score to be improved.

The closer that the amount of credit used gets to the amount of credit available the more likely that a score can go down. This is because it indicates that individual could have a high risk of over extending themselves and unable to pay back the borrowed amounts when they are due.

Fico scores pay attention to the amounts owed on different forms of credit and treat them differently.

Keys to Success: Pay off credit cards fully each month (if you have only a small amount of available credit it may benefit you to pay off your card balance more frequently than to just once during a billing period). Pay installment loan payments on time with the appropriate amount each month.

35% Payment History:

This is the heaviest weighted factor in computing an individual’s credit score. In general this factor is looking to see if an individual has made their credit payments on time. According to myfico.com if someone misses one or two payments but has a good history it most likely won’t hurt their credit score much at all. However, missing many payments can have a strong negative impact on one’s score.

All forms of credit accounts are considered in this factor. Fico also considers public records and collection items. Myfico.com states that negative factors include bankruptcies, lawsuits and wage attachments. Myfico continues with the details of late payments and collection items are considered such as how late they were, how much was owed, how recently they occurred, how many there are.

Keys to Success: Create a budget plan that ensures you are able to pay credit cards in full each month, afford monthly installment plans, and includes an emergency fund so that unexpected bills such as an Emergency room visit or replacing a washer doesn’t cause you to a bill sent to collections.

10% New Credit:

This factor focuses primarily on two items. The first is the age of an individuals and how much credit accounts have been opened in recent history. Adding a new credit card account has the effect of lowering the age of an individual’s credit which can potentially slightly lower their credit score. Likewise if an individual opens multiple accounts in a short span of time it can have a negative impact on a credit score because of the possibility of that individual being a higher risk – especially in instances when that individual does not have a long credit history.

The second item is inquiries. The FICO score only considers inquiries in the last 12 months even though most inquiries will stay on an individual’s credit report for 2 years.  With the fico score inquiries have a small if any impact. The score allows for individual’s to interest rate shop without being penalized by the inquiries.

Keys to success: Avoid opening numerous accounts rapidly. Only open a new credit account when needed.

15% Length of Credit History:

This factor improves as length of time an individual has credit. It is possible to a high FICO score without having a great score in this factor.

Myfico.com describes three items that are taken into account in this factor: “1) How long your credit accounts have been open, including the age of your oldest account, the age of your newest account, and average age of all your accounts. 2) How long specific credit accounts have been open. 3)How long it has been since the account has been used.”

Key to success: If you don’t have a credit score open a secured credit card, or find someone to cosign with you. Be slow to cancel a card that has been open for a long time even if it has been a source of debt. It is okay to not use it anymore, but it may not be wise to close it you are looking to building your score.

10% Credit Mix:

This factor considers the different forms of credit accounts that an individual has opened. This factor does not play a significant role in determine the FICO credit score. It is important to not go out and open a credit account unless it is actually needed. This factor considers whether an individual has experience in paying back different forms of credit accounts on time such as credit cards or installment loans.

Key to Success: Manage the accounts that you do have responsibly. If you have no credit accounts as mentioned above start with a secure credit card to begin to build credit.

Limits of the FICO Credit Score:

It is important to note that the information above is to be used as general guidelines. Every individual’s FICO Score calculation will be slightly different based of the individual’s experience with credit utilization and the fact that every individual has a unique credit history. Secondly, FICO has made multiple credit scores. Different lenders use different scores for different forms of credit. For example FICO has created a formula for a fico score specifically for mortgage lending that mortgage lenders tend to use. The same could be said of credit card lenders and car loan lenders.

How to Access my FICO Score?

It is extremely difficult to access a FICO score for free without taking a credit card with a company that offers a free score as benefit. Discover happens to be the only company we have discovered at this point that seems to offer one FICO score for free based off the Experian Credit Report. You can also access the Vantage Scores based of Equifax and Transunion credit reports by creating a free account with creditkarma.com. The Vantage Scores provide by Credit Karma and the FICO Score from Discover will provide valuable insight, and will help you improve your score without paying for access to other FICO scores.

To learn more about your credit score through reliable online resources we suggest visiting www.myfico.com, creditkarma.com, and yourvantagescore.com.

 

Financial Wellness Checklist for Graduating Seniors

It is almost graduation! While graduation is an exciting time, it can also be overwhelming to be thrown out into the “real world”. Getting your financial life in order can help you to feel more prepared for the next chapter in your life. Although this post is geared toward graduating seniors, it is helpful for anyone.

I also want to add that our counselors are here for you. Visit us before graduation and let us help you start post-grad life off on the right foot!

I have compiled a neat checklist for you to follow along with. This list is not exhaustive, but is a great start!

Graduating Senior Financial Checklist:

  • Create an online log-in with your student loan servicer
  • Set-up an appropriate repayment plan for your student loans
  • Open a checking account with no minimum balance and no monthly fees
  • Open a high-yield savings account to store emergency fund and other intermediate-term savings
  • Perform a credit well check- consider opening a credit card if you do not already have one
  • Read your employee benefits- if you are starting your career, spend some time studying your new benefits
  • Create a written budget
  • Start saving for retirement- utilize your employer match if you are starting your career, or consider opening a Roth IRA
  • Write out your short-term, intermediate-term, and long-term financial goals

The WKU Center for Financial Success has resources explaining how to accomplish these items here:

https://www.wku.edu/cfs/resourceshome.php

Our counselors can also walk you through this checklist and have you leaving WKU empowered and excited for the road ahead!

Visit our website to set up an appointment:

https://www.wku.edu/cfs/become-a-client.php

How {not} to spend your tax return

It’s tax season and for many of us that means a hefty tax return. What is the healthiest and most effective way to view your tax return?

Many people view a tax refund as free money and spend it almost as fast as it hits their bank account. But this attitude is dangerous. You work hard for your money all year, you have taxes withheld during that time, and now the government is giving you back some or all taxes withheld because you had more withheld than your tax liability.

Your tax return is an opportunity for you to create leverage in your financial life.

Here are 5 ways you can use your 2017 tax return:

  1. Open a high-yield savings account. You can use bankrate.com to research savings accounts and deposit the tax return money for safe-keeping. This can act as an emergency fund.
  2. Pay for school expenses. Your tax return could be used to pay off all or some of your WKU shortfall, allowing you to minimize the student loans you take out this fall.
  3. Pay off your credit card debt. It is not abnormal for college students to find themselves in credit card debt. Credit card interest rates are high and not paying hurts your credit score- use this as an opportunity to wipe the slate clean.
  4. Use it for an experience. Managing money is about using your money effectively to meet your short, intermediate, and long-term goals. It is okay to use part or all your return for a bucket-list item, if these other opportunities do not apply to you.
  5. Start a Roth IRA. A Roth Ira is a retirement savings account. Starting to save while you are young allows you to benefit from compound interest-and with a Roth IRA your money grows tax-free!

As always, for more information or to meet with a Financial Counselor, contact us at the WKU Center for Financial Success! We would love to sit down with you, go over your specific situation, and help you use your tax refund effectively!

How to Quit Stressing About Student Loans

If you’re reading this, you probably have student loan debt. It’s just a fact of life. The average student loan debt at graduation for WKU students is $28,000.

While the debt is a fact, the stress that ensues from it can be overwhelming and debilitating.

And everybody knows, the best thing to do when something is overwhelming is to suppress, suppress, suppress. When someone mentions student loans you just make like Andy Grammer and say, “Nah, nah, honey I’m good” and go about your day.

The great Michael Scott, long-time Regional Manager of Dunder Mifflin Scranton once said, “And I knew exactly what to do. But in a much more real sense, I had no idea what to do.”

You probably know exactly what you must do: pay back student loans after graduation. But how can you do that when you aren’t sure of your balance, the types of loans you have, who your loan servicer is, and repayment strategies? Answer: you can’t.

These amounts aren’t arbitrary. They are important and relevant to your life at this very moment. There are things you can and should be doing this month and this semester and this year to poise yourself for financial success now and into the future!

You have a couple things you can do. One is to whine! This is terrible, they don’t teach you this in school, school should be free, etc., etc., blah, blah, blah. Okay, now that were done whining, we will move on.

Next is to accept the reality. You are making an investment in yourself by attending WKU. You clearly value knowledge and are poising yourself for a successful career in an area you care about. And there are costs. Let’s not ignore these costs, but instead weigh them with the benefits!

We as humans tend to ignore what overwhelms us, especially finances because we lack the prowess to effectively manage them.

You, however, made a very intelligent decision to attend WKU. As a student you have full access to the counselors at the WKU Center for Financial Success, who will sit down with you one-on-one and go over each student loan, your WKU costs, as well as the other aspects of your financial life and create a financial strategy with you.

The problem with student loans is the uncertainty of it all. You’ll come into a one-on-one meeting feeling nervous and stressed, but you’ll leave with an attack strategy. We cannot erase your student debt, but we can help you handle it.