<p>Let's say you've saved up $3000 in the bank. You walk into the Apple store and blow $2500 on a Macbook Pro. The next day you report $500 on the FAFSA assets question. Is it illegal or suspicious to spend most of your money before reporting it to FAFSA?</p>
<p>And on a related note, doesn't taking assets into account just encourage people to spend it down before reporting it?</p>
<p>You report the assets you have on that day. So, if you have $500, you have $500. If you were asked to provide a bank statement verifying that you had $500 in your account on the day you signed your FAFSA, then you would be in compliance.</p>
<p>As far as spending down assets goes ... if you need to buy something, it's a good idea to purchase it before filling out your FAFSA. If you don't need it, though, you are just wasting money you will need to pay tuition.</p>