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contact LOCATIONS
Corporate Office & Support Center
864.232.5553 420 E. Park Avenue, Ste. 100 Greenville, SC 29601
Mills Avenue
300 Mills Avenue Greenville, SC 29605
Verdae Office
601 Verdae Boulevard Greenville, SC 29607
IN THE ISSUE:
Taylors Office
3237 Wade Hampton Blvd Taylors, SC 29687
Spartanburg Office
130 North Town Drive Spartanburg, SC 29303
Easley Office
118 Brushy Creek Road Easley, SC 29642
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Columbia Office
1025 Pulaski Street Columbia, SC 29201
Florence Office
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Events & Community
2321 Trade Court Florence, SC 29501
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Member Service Center
Greenville: 864.232.5553 Nationwide: 800.922.0446
24/7/365 SERVICE MONEYLINK℠ Online at sctelco.com
MONEYLINK℠ Audio Response Greenville: 864.232.3645 Nationwide: 800.633.4364
Members Financial Services
In the Spotlight
6 8 9 10
Q2
Letter from the President
The 411: EXTENDED WARRANTIES
What We Read GOOD TO GREAT
Money Matters with Moxie RECOMMENDED READING (& LISTENING)
THE FOUR PILLARS OF PERSONAL FINANCE
Gary Williams: 888.746.0002
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How to Manage Your Debt
Visit our website sctelco.com to locate an ATM near you!
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College Savings Preparation for Teens
FIND US ONLINE SCTelcoFCU @SCTelco_FCU @sctelcofcu sctelco.com
This credit union is federally insured by the National Credit Union Administration. SC Telco is a proud member of the Credit Union Service Center Network. co-opcreditunions.org SM
Copyright ©2018 by SC Telco Federal Credit Union and The Brand Leader. All foreign and U.S. rights reserved. Contents of this publication, including images, may not be reproduced without written consent from the publisher. Published for SC Telco Federal Credit Union by The Brand Leader. SM
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Dear SC Telco Federal Credit Union Members, I recently read an article that said most people spend more time planning their next vacation than planning their finances. This makes sense; vacations are fun to plan—in fact, psychologists say planning and dreaming about an upcoming vacation is just as much fun as taking it. Our finances can feel like a chore to plan and manage so we put it off as long as we can. As a result, we spend more time worrying about our finances than doing anything about them, and we spend more time planning our vacation than we spend making sure we’re secure in our retirement.
LETTER FROM THE PRESIDENT
For this issue of Checkpoint Magazine, I reflected on this recently: Smart Money Management. When we hear the word smart, we often think of technology like thermostats and smart kitchen appliances that are connected to an app on our phones. At SC Telco, we’ve developed mobile and web-based banking resources for you because we believe having the right tools is important. Having convenient access to your accounts and good visuals to help you understand your money gives you the ability to track what you spend and budget more easily. However, none of these tools make a difference if money management and financial literacy are not priorities. That’s why we give a broad range of advice and guidance to relate to you and your current financial situation. One of our jobs as a credit union is to educate our members, dig deep into your needs to improve your financial lives, and be an unbiased source of information. We realize many aren’t usually taught these things in school. We have to be self-educated and self-motivated, if we want to get smart about managing our money.
Steve Harkins PRESIDENT & CEO
All of you have diverse needs. Some of you are ready to fully automate your finances with the need of sophisticated financial planning, while others are trying to send their children to college or are building a household budget for the first time. For this reason, SC Telco is making it our mission to provide these kind of services for you. We want to help you create an overarching plan for money management that makes sense for you, no matter what your age or stage in life. In this issue and online you’ll find information about how to get rid of debt the smart way, the best way to buy a car, how to balance all aspects of your financial well-being, and many other topics that can have a deep impact on your family’s financial health. We understand that educating yourself and getting smart about your money can feel complex and overwhelming, but we urge you to start somewhere. Start where you are right now; we’re happy to meet you there.
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EVENTS & C OM M U N I T Y
April is Financial Literacy Month! How often have you wished that you learned more about money as a child? The National Financial Educators Council (NFEC) established April as Financial Literacy Month in response to troubling statistics about how little college students understand about managing a budget. Currently, only 17 states require high school students to take a course in personal finance in order to graduate. Fortunately, there are lots of ways that parents can teach their children’s money skills, even before they start school.
Here are a few of our favorites:
AGES 3 -5
Preschool and Kindergarten age children don’t yet understand more abstract financial concepts so use concrete objects to teach coin and bill identification. Using play money and items around the house, roleplay shopping with your children so they begin to understand value and exchange.
AGES 6 -8
Real world money skills are easy to teach at this age, when children are establishing an identity outside the home. Let your children help you shop, talking about how much each item costs. This is also a good time to start making children earn and spend their own money. Handing crisp bills to the cashier teaches children a lot about the value of money.
AGES 9 -12
Children in this range are becoming independent—and are extremely tech savvy. This is a good time to open a savings account for your child. Introduce different types of cards, both credit and debit, by going through your wallet and talking about each card. Or, let your child practice paying for items with gift cards or prepaid debit cards.
AGES 13 -16
Children in high school should have a joint checking account with their parents that they manage. Your child could work for spending money so they can learn how to budget and make tough real life decisions.
AGES 17 +
Whether or not your children are headed to college, this is the time to discuss loans, debt, interest rates, and credit reports. Talk frankly with your child about rent, groceries, utilities, and other household bills. Also, practice working up an initial budget together so that your teen has a better concept of cost of living. With a little planning, parents can help prepare their children for a strong financial future. SC Telco has lots of resources for parents who are trying to teach their children about money. Check out our online resource center or come by the nearest branch location to learn more.
2018 SC TELCO HOLIDAY CLOSINGS MEM ORI AL DAY
05/28 MONDAY
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THE SC TELCO
CREDIT CHECK-UP If you’re interested in improving your credit score, the best way to start is with a free credit check up from SC Telco. Give us 10 minutes and we will put you on the path to a higher credit score. Ask us for more information. We look forward to serving you.
IN THE SPOT LIGH T
IN THE SPOTLIGHT Kiri Ledbetter |
SC TELCO BRANCH MANAGER AT THE MILLS AVE LOCATION IN GREENVILLE, SC
Kiri began her credit union career in 2008 as a part-time Teller. After becoming full-time, she was promoted to Teller Supervisor, then to a Member Service Representative. In 2013, she joined SC Telco Federal Credit Union as a Lending Specialist and was recently part of the Education & Development/ Community Relations Department. She currently serves as the Branch Manager of the Mills Avenue
location. Kiri enjoys working for the credit union because it gives her an opportunity to make a difference in the lives of people in the community and to help SC Telco members improve their financial lives. Kiri holds a Bachelor’s Degree in Business Administration from ECPI University. When she’s not working, she enjoys spending time with her family and friends, as well as traveling.
In her own words: What have you learned by working at SC Telco? I’ve learned the value of building strong relationships. When you’re able to connect to people within the organization that you normally wouldn’t deal with on a regular basis it gives you a sense of security and confidence; you know that you have the resources you need to do your job successfully.
Tell us a little more about your family and home life? My husband was one of the first (street) food vendors selling food in Downtown Greenville. During the summer our girls like to go with him to help him sell hot dogs! Our son loves being outside and Bruno Mars. When my husband’s not selling hot dogs—he’s selling houses. He is a licensed realtor with Wilkerson ERA. On my days off, I like to make crafts, and the kids enjoy helping me use the Cricut. We like to spend time outside or going to Dave and Busters to play games.
What has working for SC Telco meant for your family? In one sense, my coworkers at SC Telco have become part of my family. We pull together in times of struggle and we celebrate our success as one team. Work-life balance has always been important here and that’s a huge advantage to my family at home, especially my young children.
If you could tell our members one thing, what would it be? I would tell our members that achieving financial success is different for each person or family but it is attainable. If you are willing to set your mind to improve your financial life, even if it’s in baby steps, you can do it! And we can help you. Our members should never feel nervous to share their hardships with us so we can give them the resources they need to overcome them. It’s what we live for!
Do you have a story you’d like to share? Send it to Melody Vega at mvega@sctelcofcu.org. 5
CAR LOAN S
The 411 Extended Warranties You’re in the process of buying a new car (or new to you, at least) and before you know it, you’re in the office of a sales manager talking about all the “extra” stuff you can add on to your bill, including the option for an extended warranty. It all sounds good to you—being able to prevent any issues that may arise in the future with a swipe of the pen now— but how important is all of that, anyway?
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CA R LOA NS
Let’s take a look at extended warranties, and whether or not they are worth that additional financed payment at all. A typical extended warranty is just that—a warranty that picks up after the manufacturer’s warranty has run out. In truth, they aren’t typically warranties at all; they are Service Contracts designed to protect you from certain hazards you might come across with your car. And while it’s naturally a much bigger topic of discussion when purchasing a used car, many dealerships will try to sell this package on new car purchases as well, touting their ability to prevent headaches for what the manufacturer’s warranty didn’t catch, or where coverage has lapsed.
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What is covered? There are a few different types of warranties you may be offered, so it’s important to understand what you are on the hook for and what you’ll potentially get out of it. A basic bumper-to-bumper warranty will offer general coverage, but typically only covers defects in factory-installed parts by the manufacturer. Powertrain warranties cover the major power systems—engine and transmission being the two major parts. Less common are roadside assistance, which covers tows and tires if your car breaks down on the side of the road; rust and corrosion, which covers rust damage; and emission warranties, which covers repairs needed to bring a car to compliance with EPA regulations, if necessary.
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Will you have the car long enough to need the warranty? If you’re in the market for a new car—or even one “certified” by the dealer—you’re probably going to already have a warranty in place, with most covering three years or 36,000 miles on a limited warranty, and 5 years or 60,000 miles for your powertrain. So if you’re buying new and selling or trading in between three and five years, it’s worth questioning whether or not you’ll need the extended warranty at all.
Is the price reasonable?
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Ultimately, the price of any extended warranty is determined by a number of factors: deductible price, term of coverage, and age of vehicle. Determine exactly how much the dealer is charging for their extended warranty, what kind of deductible you’re taking on (if any) and what it covers. Then, you have the option to find a comparable plan elsewhere, for cheaper. Without this information, you’re putting your decision-making power in the hands of a salesman, whose job it is to get as much money as possible from you.
Do you need it? This is the big question, and one that only you can answer. If you feel like it’s a good purchase for you, based on your driving history and the type of car you are purchasing, by all means, get the extended warranty. Keep in mind that you might be able to purchase that extended warranty elsewhere for a cheaper price—but that’s only useful if you know the details of what you are buying, and are able to make an educated decision. In fact, SC Telco offers a three-tiered extended warranty that covers everything from basic components and roadside assistance through your engine, cooling system, and more, with no deductible on covered parts. Ask your local branch associate about the Route 66 extended warranty and how SC Telco can provide this service to you.
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RESO U RC E S
WHAT WE READ Synopsis:
A Great Read If:
Written in 2001, Good to Great poses a balance between corporate case studies on leadership, effectiveness and success (with success being defined as “financial performance several multiples better than the market average over a sustained period”) and common sense advice for managers, executives and entrepreneurs. By illustrating different points with the challenges and successes of real companies and their leadership—with examples including Bank of America, Phillip Morris, Circuit City, and others—Collins is able to create an immersive experience where the reader has the opportunity to evaluate and examine the true effect certain practices may have on their company.
You are trying to differentiate what makes a company truly successful, instead of being one that simply gets the job done. From leadership principles (in the book Level 5 Leadership), to technology and growth principles, Good to Great provides a well-rounded look at entrepreneurship.
Why Read It: Good to Great sits on the shelves of most entrepreneurs and CEOs, and for good reason: it has become a staple in the business world as a go-to for great business advice. The book manages to take pretty standard business practices and align them with real-world examples of companies that have either failed or succeeded, and in doing so, create a compilation of case studies on corporate “shoulds” and “shouldn’ts.” 8
A Special Takeaway: “First Who, Then What.” This practice, of focusing on the getting the right people on the team first, and then figuring out how they fit into the team, is likely one of the concepts this book has become known for in the business world. Collins stresses the need to “get the right people in the right seat on the bus,” where the “bus” is your company, and “seats” are positions within your company.
The Final Word: Good to Great should be one of the top 10 in your business book go-to list, for sure, so if you haven’t read this book yet, it would be a great idea to grab it and check it out.
RE SOURCE S
MONEY MATTERS WITH
Okay. So, you say you didn’t learn enough about personal finances in school? None of us did. Good thing there’s a wealth of well-written, relatable, fun resources out there—enough to put yourself through a master’s program without all the student loan debt. I like to stay up-to-date, so my shelves are stocked with hundreds of financial titles. To get you started, here are my top three. All short, all sweet. You can read all three for Financial Literacy Month and be well on your way to a stronger financial future: Best For Young Tycoons in Training:
Best for Trying to Break Bad Habits:
Best For People Who Like Simplicity:
Why Didn’t They Teach Me This in School? by Cary Siegel
You Are a Badass at Making Money by Jen Sincero
The Automatic Millionaire by David Bach
The subtitle of this book is 99 Personal Money Management Principles to Live By. Yeah, I know that sounds like a lot to get through, but the principles are broken down into eight broad, easy-to-understand lessons, and the entire book is less than 200 pages. These easily digestible, bite-sized lessons are perfect for twentysomethings—or anyone who wants to brush up on the basics.
If you like your financial advice with a dash of humor, then this candid, cheerful book is for you. Get ready to laugh, to cry—and maybe to turn a bit red when you recognize yourself in some of the terrible money habits in these pages. Sincero writes her book like it’s part confessional, part memoir, and part manifesto as she challenges readers to develop a new money mindset and stop their worst habits for good.
You know those 30-day challenges or 10-step plans to achieving financial independence that you pick up once and never look at again? This book is nothing like that. This is A Powerful One-Step Plan to Live and Finish Rich. That’s right. One-step. I think I can handle that! This book reads like a fun work of fiction. No wonder it spent 31 weeks on the New York Times Bestseller List.
BONUS
Best for Multitaskers and Workout-aholics: Podcasts! How can I limit my list to three when there are so many amazing podcasts to listen to? Why not improve your financial fitness and your physical fitness at the same time? With podcasts, anytime is the right time to get smart about your finances. I like Stacking Benjamins, The Clark Howard Show, and Money Girl’s Quick & Dirty Tips for a Richer Life.
Learn more & see Moxie in action:
sctelco.com/MeetMoxie
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Personal Finance Understanding the Four Pillars of Personal Finance
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he beginning of the year is a great time to take a personal financial inventory especially when you may be recovering from overspending at Christmas. Perhaps you are thinking ahead to 2018 taxes and how to lower them. Maybe you’ve made a resolution to make and really live by, a monthly budget. In any case, it’s never a bad time to get your financial house in order. There are many different financial profiles and household budgets vary widely. Budgets also fluctuate, morphing continually, due to unexpected changes—positive or negative—and disruptions. So how can you really determine the health of your financial profile? Regardless of income or wealth, number of investments, or amount of credit card debt, everyone’s financial state fits into a common, fundamental framework, that we call the Four Pillars of Personal Finance. Everyone has four basic components in their financial structure: assets, debts, income, and expenses. Measuring and comparing these can help you determine the state of your finances and your current net worth. You can think of them as the vital signs of your financial circumstances. When they are all in balance and working for you, your vitals are strong. When things get off kilter, like your liabilities being off the charts, your finances may need some CPR to set them right.
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HOW TO TAKE YOUR PERSONAL FINANCIAL INVENTORY
Assets & Liabilities
Assets and Liabilities are the fundamental elements of your financial position. The difference between the two represents your net worth. To get started understanding your overall personal financial health, tally up your assets and your liabilities.
ASSETS
LIABILITIES
What is Considered an Asset?
What is a Liability?
Assets are items that you own and that have value that can be turned into cash when needed. Assets include cash in your personal checking or savings account, whole life insurance policies, 401k’s, investments, land, equity in your home, valuable jewelry, even Great Aunt Sally’s beautiful antique fine china. But it’s probably best not to count on your baseball card collection or your Precious Moments figurines. The key to an asset is its ability to be converted to liquid cash within a short period of time. Your vinyl collection may be the envy of all your friends, but if you cannot convert it to liquid cash when you need it, then it cannot be considered an asset.
Many of us never learned the basics of effective debt management, and only when we find ourselves in debtrelated trouble do we get serious about figuring it out. Liabilities, or debts, are obligations or items that are owed to others. Debts are the accounting opposite of assets and include all accounts payable. Things like your mortgage, student loans, car loans, credit card balances, taxes owed, bills due, and money you owe others for services are all considered liabilities. In addition, accrued interest and principal on mortgages and other loans are liabilities as well. Remember, interest rates are an indicator of the cost of carrying debt, and tend to be negatively correlated with one’s credit score: the lower the credit score, the higher the interest rate.
Why are Assets Important? That asset can be used later in life, so it’s important to understand how it works and how to use it wisely. We can help you make informed decisions about leveraging your home’s equity. In short, using your equity for things that will produce a positive long-range return, like improvements that increase your home’s value or paying off high interest credit cards, or for covering emergency expenses are good reasons to access your home equity. It is a bad idea to liquidate your equity for luxury purchases, vacations, and daily living expenses.
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How Should I Manage My Liabilities? Debt isn’t always a bad thing, especially if it’s debt you accrued in order to create a stable home for your family or further your education. However, too much debt can feel crushing and increase your mental load. Your first step is to be honest with yourself about how much debt you are comfortable with. What is your upper limit? It should always be the goal to regularly increase assets while decreasing debts—think of it as building your own personal equity. Make it a goal to get and stay debt free; it’s the new rich.
THE FO UR PIL L AR S O F PER S O NA L FINA NCE
Income & Expenses While Assets and Liabilities give a great picture of your overall, long-term financial health, tracking Income and Expenses can help you understand your money day-to-day and month-to-month.
INCOME
How Do I Calculate My Income? Income is all the money you generate. It also includes interest and dividends you make on your investments. Tax refunds also qualify as income. For those under age 65, take-home pay usually constitutes the majority of income. Retirees and those over 65 gain most of their income from investments, Social Security, or pensions. When taking stock of your income, be sure to include benefits that reduce your expenses, such as employerprovided health insurance, or that increase your assets, such as 401K programs. While these benefits don’t put cash in your checking account directly, they do increase your overall financial health and reduce your out-ofpocket expenses.
How Do I Know What I Can Safely Spend? Have you heard the terms disposable and discretionary income? Disposable income is not really disposable; it refers to any remaining income after paying taxes. That’s the money we use for our necessities, like housing, groceries, and transportation. Discretionary income is what’s left after paying for the necessities, and with any luck at all, we can have a little fun with it. It pays for vacations and tickets to see our favorite band. But discretionary income is also what we draw from to build savings or to more aggressively pay down debts. So using it wisely is crucial.
EXPENSES
What Counts as an Expense? Expenses, or outflow, is all the money you spend. To gain an accurate total of expenses, it is important to establish a budget and to keep track of every penny spent. There are some fun, user-friendly apps like BillGuard, YNAB and Dollarbird to help you with this. Keeping track of expenses is more challenging than keeping up with income because of the sheer number of different expenses. It is typical to overestimate or underestimate expenses and to forget entire categories (like haircuts and dog treats). So, when listing your expenses, don’t just list the big easy items like your mortgage, car payment, and phone bill. Remember money you spend on vacations, taxes, oil changes, school supplies, and other things that do not necessarily occur monthly. Using a personal statement tool can help jog your memory and account for all the different items you spend money on.
How Do I Keep My Spending in Check? This is one of the toughest personal finance questions to answer, and the answer varies for everyone. In general, avoid impulse and emotional purchases. If you are inclined to retail therapy when you’re sad, stressed, bored, or lonely, there are ways to keep yourself in check. If while shopping you discover something wonderful that you didn’t know existed but now cannot possibly live without, don’t buy it. Let’s say that again: Don’t buy it! Ask yourself if it is a want or a need. Make yourself wait several days before deciding to purchase the item—chances are, your excitement will pass and you’ll forget about it. Limit your exposure to ads that tempt you to buy things. Cancel catalogs that show up in your mail. Don’t click on those Facebook ads for the new shoes. Avoid the shopping mall if that is your downfall. The less you are aware of what’s out there to buy, the less likely you will be to make impulse purchases for things you do not need that throw your expenses and income out of balance.
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MONE Y M AN AGE M E N T
HOW TO MANAGE YOUR DEBT
GETTING RID OF DEBT THE SMART WAY
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MO N EY MA NAGE ME NT
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inancial management can be tricky on its own; add debt management to that and many people can be overwhelmed by the weight of paying off debt and balances owed. But debt management doesn’t have to be difficult; by taking a few steps and mastering the formula of debt repayment, you can get back on top and be debt-free in no time.
• Step 1: Pay Your Bills on Time — Consistently Sounds easier than it can be, we know. But, if there’s one thing you can do to protect your credit while you pay down debt, it’s making sure you pay your bills on time—every month. Not only can late payments affect your credit score, but they also open doors that allow creditors to alter your credit limits or interest rates. Nobody wants to pay 25% interest, so make sure you are hitting those due dates. As a better practice, set up direct drafts where possible, or utilize SC Telco’s Bill Pay through MONEYLINK℠ Online to pay all your bills, in one easy place.
• Step 2: Build an Emergency Savings Account Once you’ve got your payments in line, start pushing money into an emergency savings account, to provide a level of insurance against future obstacles that may arise. Most experts recommend keeping somewhere between $1,000 and $1,500 in this account, to be used only for insurance deductibles (in case of a medical situation or car accident, for example) or large purchases (like when your air conditioning goes out in the middle of a 100-degree summer). Fortunately, SC Telco offers a number of options in savings accounts—including high interest savings accounts and money market accounts—so you can start building your emergency buffer today.
• Step 3: Consolidate Past Debt with Lower Interest Rates It’s hard enough to pay down debt, but high interest rates can keep you from making much progress at all. As a practice, go through and determine all your debt—balance owed and interest rate charged. Quickly pay off small balances if you can, then focus extra payments into your debts with the highest interest rate. Sometimes, if you’ve kept up payments and your account is in good standing, you can call your creditor and negotiate lower interest rates. You can also refinance car loans, saving hundreds or thousands of dollars in interest alone. As another option, consider a personal loan through SC Telco to consolidate your debt and pay it off quickly at a much lower interest rate, making serious progress in a short period of time.
• Step 4: Use Available Tools to Manage your Finances Most financial institutions—and creditors—offer a number of tools that you can use for your benefit. At SC Telco, examples include free credit checkups so you can watch your score improve over time. Other options are online bill payment, automatic draft, and utilizing My Mobile Money fraud alerts to manage your debit card. Want more on smart debt management? Check out sctelco.com for our debt consolidation and credit card payoff calculators. 15
K ID S & M ON E Y
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College Savings Preparation
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ollege days are here again, and if you have a child going off to college, you are probably already bearing the brunt of the financial stress that this
rite of passage bestows. But while many college students exit college in dire straits (with the average college graduate owing around $37,000 in student loans), that’s no reason that your student has to suffer the same fate. In order to put your child on the right track, here are some lessons you can teach them now, to prevent future financial heartache.
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K I DS & MONE Y
Savings If they haven’t learned already, remind them now that saving when times are good can help prevent major stresses when times aren’t so good. As adults, it’s important they learn to think ahead. Major health issues, car accidents, theft and property damage are all realities they should consider. They should also plan ahead for future benefits including road trips, football games, weddings and large purchases, like getting a new car.
Credit During the first week of class, most major universities bring out an influx of credit card lenders. Freshmen students with newly found freedom are often easy to bait. Teaching your child about the differences between credit and debit is a must. Remind them “free” benefits are often not free at all. They must learn how to manage a credit account without getting behind or deep into debt. Without such knowledge your student could find themselves thousands of dollars in the hole—with very little to show for it.
Keeping Track With any account—credit, debit, checking or savings—it’s important that your student know how to keep track of it. Those applying for credit cards should understand the differences in “perks” that are offered; those applying for used car loans should understand the interest rate and how it plays into the larger picture of their overall payment. Every student by this age should know how to balance a checkbook, and how to spot fraudulent activity on their account.
Managing Debt When it comes to student loans, it’s easy to get confused by all the options your student may have signed up for. Still, from loans, to grants, and scholarships—it’s important that they understand what they have signed up for, how much it will cost them, and how long they will be under that debt umbrella. Keep in mind that most student loans have low-interest rates locked in, unless you consolidate with an outside lender.
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PO Box 10708 Greenville, SC 29603 sctelco.com