<p>After skimming through all the financial aid terminologies (I did get good financial aid, thank God), and thinking this is like foreign language to me, I'm wondering if I'm in trouble for college. I've only ever used a debit card, have no experience with a visa or a mastercard or 'building credit' or managing or dividing things up and I'm scared! If the next four years are going to fly by as fast as the past four years have, which I'm sure they will, I probably need to educate myself and become more financially literate. Am I normal? Will things come to me naturally?</p>
<p>Spend less than you make and you will be alright.</p>
<p>Only borrow what you can afford to pay back.</p>
<p>Listen to Louis Armstrong…West End Blues…or Aint Misbehavin…</p>
<p>You are young…you’ll be fine if you follow the first two sentences.</p>
<p>Your being concerned is a very good sign. Try to take a personal finance class. It will be one of the classes that really does help you throughout life. Will things come naturally? I think that depends in large part on how your parents treated financial matters. I have many multi-generational families as clients, and the apple doesn’t usually fall far from the tree. Not to worry if you want to do things differently though–you can! The best place to start is by applying dstark’s rules and always save something for the future and emergencies.</p>
<p>If you don’t want to sit through the personal finance class get the book and learn its contents. Our school district allows students to test out of that class. You need the knowledge, not the experience of the class. Getting a list of subjects covered and learning about each one can suffice. I wouldn’t be surprised if there is a P… F… for Dummies book out there.</p>
<p>Great question. Second the recommendations here. Just keep learning, bit by bit. Some of this will require reading on your own; if you are lucky, there will be a class devoted to this. Good for you for asking. The financial aid and FAFSA forms are confusing, and difficult to wade through, for almost anyone. Almost all of us can afford to become more financially literate; if I had thought this way when I was 18, I’d be in better shape financially. My only saving grace has been living frugally and saving.</p>
<p>There IS a Personal Finance for Dummies book. It is great! You probably can pick up a used copy for about $3 somewhere like I did.</p>
<p>You also should take advantage of any educational materials that you can get at your bank or credit union. Better yet, find a credit union that you are eligible to join, and do so. They usually are better at the education bit than banks are.</p>
<p>look into mint.com for managing your finances. You may not have much to “manage” now, but using this tool is quite informative.</p>
<p>I think that the best habits a young person can develop are budgeting and saving regularly. Learning to navigate the maze of financial aid is a gruesome odyssey, but will not help much beyond your college years (at least not until your own offspring are ready to launch). But if you can learn to live within your means and plan for your financial future, you’ll be miles ahead of the general population.</p>
<p>Take a personal finance course in college as an elective. DS took one and said it was one of the BEST courses he took the whole time he was in school. He didn’t get a terrific grade but he said it didn’t matter because he learned a ton. He believes strongly that a personal finance course should be required for all undergrads. Not a bad idea.</p>
<p>Agree with the above. One other thing to always keep in mind, “If something sounds too good to be true, it probably is.” This likely means that someone is trying to scam you if they promise you LOTS of money if you make a quick decision & give them a lot of money up front with promises of great returns to you.</p>
<p>Main thing is to spend less than you make or have and you really should be fine. My kiddos did NOT take any personal finance courses but had no problems spending very little and living within their means. For debit & credit cards & checking accounts–these are just more ways to spend money–anything you spend has to be repaid by you. Treat everything like cash and you won’t go wrong. Pay all your bills before they are due and do not incur finance or late charges.</p>
<p>The basic cardinal rule: If you borrow something, make sure you return it before the due date. </p>
<p>If you use a credit card you are borrowing, you may not think so but you did not pay cash at the time you bought the item. The credit card company instead paid it for you and billed you later and you owe them. If you are late in paying back the credit card, the student loan, the personal loan etc. the banks will get you. They will not only charge late fees etc, they will ruin your financial reputation (the credit score is in essence your financial reputation reduced to a number, the higher the number the better your reputation).</p>
<p>If they ruin your reputation i.e. put a negative report on your credit report, they will charge you a lot more in interest.</p>
<p>Moral of the story: Do not borrow (student loan, car loan, personal loan) or use your credit card if you cannot afford to pay it back when the bill comes due.</p>
<p>HImom and others are saying the same thing.</p>
<p>It is also useful to learn some of the basics of investing, compounding principles, retirement planing, budgeting, etc. I think that learning about risk, ways to invest, etc will help you once you are no longer a starving student. Also, a couple of classes of econ never hurt anyone and can help you understand the financial markets and how it affects you personally.</p>
<p>One bit of advice: ask questions if you do not understand. A classic case is when you want to buy a car. The car salesman will say he can get you a car with a monthly payment is $450 a month and tell you how the previous guy paid $500 and that you are getting such a good deal. You need to know what the cost of the car is, the term and the interest rate and compare. No one will volunteer the information very easily as they may be charging you a very high interest rate or selling the car at above MSRP. The previous guy may have paid a lower price, a lower interest rate but had a shorter term, 3 years instead of the 5 years the salesman is trying to get you to agree to.</p>
<p>And they will confuse and tell, “just lease it and it will just $199 a month”. You need to do your reserach and find out if it makes sense or not. If you do not understand the difference between sale and lease, ask questions. </p>
<p>The web is a good place to start. Ask questions, do your reserach and do not make a decision till you have a comfort feeling. You will learn a lot about personal finance that no class will teach just by asking questions and doing your reserach.</p>
<p>Also, any time there is an add-on, question it. In other words, they will give you a price and then add all sorts of extras at the last minute. It will have important sounding names like credit insurance, credit application fees etc. Most of them are unneeded. Do not take anything for granted.</p>
<p>What a wise question at your stage of life! Wish I had asked that when I was 18.</p>
<p>One thing that has changed for D2 vs. D1 during high school is that her graduating class is the first one to require a one semester personal finance class for graduation (this is starting with the Class of 2013 in TN.) The content has been wonderful; everything from banking to insurance and work benefits. </p>
<p>I know when D1 opened her checking & savings accounts at Bank of America they gave her financial education materials designed for young adults; check your institution to see if they have something similar. </p>
<p>Mint.com has good materials as does CNN Money [Money</a> 101 - Financial Advice & Lessons Made Easy by CNNMoney.com](<a href=“http://money.cnn.com/magazines/moneymag/money101/index.html]Money”>http://money.cnn.com/magazines/moneymag/money101/index.html) </p>
<p>In terms of books, a couple of authors that explain things in basic terms are Suze Orman and Dave Ramsey. Dave Ramsey is extremely against debt and some people think he goes too far, but I find his books to be easy to understand.</p>
<p>One thing someone told me long ago was that when it comes to credit, you shouldn’t use it for disposable/consumable items. Home mortgages, car loans, student loans, etc. are fine when responsibly considered. Appliances and car repairs, well those are usually paid for in an “emergency” situation and that’s fine too. But paying for meals out, groceries and gasoline…if you don’t pay it off the next month, you’ll be paying interest on something that’s been long gone!</p>
<p>I think you should figure out your financial aid package and how loans and everything will factor in to how much you’ll have to work to pay for everything (the remaining costs and preparing to pay off the loans).</p>
<p>I’ve had to work with the financial aid department extensively, with my package being reworked at least 8 times (often seemingly without reason).</p>
<p>I would say as long as you’re comfortable with knowing how your financial aid will cover you, what you have to do to make sure it goes through properly, as well as managing how much money you have in all of or your different bank accounts, how much you have available in checking, and watch how much you’re spending you should be fine.</p>
<p>I wouldn’t also hurt to start investing money (although it isn’t always easy to invest well, while you’re really busy), as that can help you make money (I probably wouldn’t do this unless you could learn from people who know what they’re doing).</p>
<p>Start listening to the weekly Marketplace Money podcast from American Public Media (it is a public radio program). In four years you will get an education on a wide variety of personal finance topics. I have been listening for 20 years (the show used to be called Sound Money, and it existed long before “podcasts” did), and I still learn something new every week. And am regulary reminded of good finanical habits for the things I already do know. On rare occasions I disagree with them, but 99% of the time I think they are spot on. It is an entertaining and fairly painless way to improve your financial literacy.</p>