- April 13, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Financial Planning as a College Student-Athlete
As a college student-athlete in a D1 program, I recently received $4,400 in pell grant money from the government, which I get to keep due to being on a full ride. This extra income provides an opportunity for me to enhance my financial management skills and set myself up for success in the real world.
### Prior Money Management Challenges and Lessons Learned
In the past, I struggled with managing my finances, especially evident when I quickly spent my PUA benefits during the Covid crisis. This experience taught me the value of money and prompted me to make significant lifestyle changes. As I continue my journey as a junior, I aim to apply these lessons to effectively handle my finances.
### Current Financial Situation and Concerns
I currently receive $1600 a month through a stipend, supplemented by earnings from a side hustle amounting to $800-$1000 monthly. However, my expenses, including rent, utilities, car insurance, and credit card payments, total around $1800-$1900 per month. Moreover, the maintenance costs of my car, an Infiniti m35x with over 210K miles, pose additional financial challenges.
### Future Financial Goals and Strategies
In preparation for post-graduation financial independence, I am actively seeking an internship or additional work opportunities this summer to increase my income. I also plan to make smarter spending choices, such as reducing drinking expenses and being more mindful of discretionary spending on items like clothes, groceries, and dining out.
### How AI Legalese Decoder Can Help
By utilizing AI Legalese Decoder, I can easily navigate legal jargon and understand complex financial terms, ensuring that I make informed decisions about managing my finances. This tool can help me create a personalized budget, track my expenses, and explore investment opportunities to foster financial growth at a young age.
### Seeking Guidance and Support
I welcome any advice or suggestions on effectively managing my monthly expenses, improving my credit score, and growing my wealth. Your insights and recommendations are invaluable as I strive to alleviate financial stress and build a secure future post-graduation. Thank you for taking the time to read my financial concerns and aspirations.
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Pay off your CC and put all the money in a high yield savings account. Why do you have a 1500 balance in the first place? It sounds like you make more than you spend, you shouldn’t have debt.
As a college student with little income and cash, your goal is basically to survive until you have a salary. Don’t worry about investments.
Pay off your credit card and put the rest in the bank as an emergency fund. Don’t touch it unless it’s an actual emergency.
Your primary goal in life right now should be to pay off your credit card every month on time.
Credit cards charge 25 percent interest. No investment or hustle is going to bring that return.
PAY THAT CREDIT CARD.
Save money in a savings account and monitor your spending for a few months. Only if you feel that your spending is constantly less as compared to what you are earning then invest. Not now !!!!!!
If you are on a full ride and also received Pell grant, your 1098t box 5 scholarships could exceed your box 1 qualifying expenses and you MAY end up owing tax on the excess.
Just follow this sub. I have absorbed tons of financial knowledge just scrolling past it daily and reading the comments.
Good for you for taking an initiative to ask about these things.
Like others said, definitely prioritize paying the credit card. If you HAVE (emphasis on have, ie. NEED such as your phone bill if you pay it, or just random expenses, etc) to spend any money, use the CC, and then pay it off each month. You want to show that you’re using it, while keeping your balance/usage to < 30% of the total limit. This will help you build your credit. As someone without income, if you can manage to make minor improvements to credit during that time it will set you up right once you do start earning income.
With the rest of the money, put it in a savings account and don’t touch it. Having something put away like that will give you so much peace of mind long term.
Again like others have said, it’s best to just try and survive until you graduate. It may be tempting to spend this free money you’re getting, we’ve all been there, but locking it away as best you can is what you really want to do.
First of all, you should be very proud of yourself. Your athletic and educational achievements are amazing and it’s worth taking a long moment to recognize all of the hard work you and your support (family, friends, coaches, etc.) have put in.
As for what to do with this money, make sure you never carry a balance on your credit card ever. For the rest of your life. There are a lot of people on YouTube that can teach you all about proper credit card usage but the biggest thing is that when you get a credit card bill, pay the total balance due. I personally like to have auto-pay set up so I don’t have to think about it.
And for the remainder, I wouldn’t worry about putting it in savings. You could have car issues issues or other surprises that I would rather just have the cash on hand to pay for. For example, $5,000 in a savings account making 5%, if you could even find that, will make you ~$250 a year in interest. I don’t think $250 dollars in a year is worth more that the convenience of just having it in a $0 fee checking account. $5,000 was an arbitrary number i through out but the point is, make sure you have enough cash in a checking account to not have to worry about life’s surprises. Anything more than what you feel you need can be thrown in any interest bearing checking account.
Have fun in college. Try to work on figuring out what’s worth spending money on. You do not need to spend very much money at all to have fun in college, especially when you’re already busy with sports, internships, clubs, and keeping up grades for your scholarship. You sound like you have a good head on your shoulders but I have to add, please be safe.
You’ve gotten good advice on here already, but the only thing I’d add is to stop paying so much attention to your credit score. It’s amazing to me how many young people think of that as some sort of grade for their financial life. Just pay all of your bills on time including your full credit card balance each month and your credit score will be just fine. I honestly have gone 20+ years at this point without knowing or caring what mine actually is.
Hi this is a summary of the best things people have said and what I would suggest for your state in life.
Priority:
1. Needs in the moment (housing, utilities, food)
2. Pay off debt (your credit card)
3. Save (in High Yield Savings Account offering over 4% interest, not at a regular bank, they only offer like 0.3% or something, basically pennies per year) – I use Marcus, it’s very user friendly and straightforward. The yield is currently 4.6% per year.
A high yield savings account keeps your money liquid (accessible), where investing in retirement account like an IRA does not. Right now, a high yield account is basically a no risk way to grow your money and also be able to draw on it nearly instantaneously should you need it for down payments, etc. I keep my emergency fund and house down payment fund in a Marcus account. I think you need about a one week buffer to draw on the money in Marcus (transfer it to your normal bank where your checking account is) before you can pay it out to anyone.
If you pay off your credit card ($1500) and put all the rest in a Marcus account, you would grow the remainder from $2,900 to $3,033.40 – $133.40 “free” dollars!
Side comments:
Start a ROTH IRA in the first 5 years you are in the workforce, once you have your feet underneath you.
Don’t worry about it now.
I wonder about what you said about premium fuel for your car as well… If you can ask a mechanically minded person whom you trust about this, I think that would be good (unless you are a mechanic already, idk!). It would be really good if you could cut the cost of fuel and just use the regular gas. Then transfer any extra savings from frugal living from your checking account back to your High Yield Savings Account periodically.
In regard to your credit card situation… if you’re responsible…. You can transfer the balance to another card that has an intro 12-15 month 0% apr to avoid paying too much interest. You’d have to pay a balance transfer fee, though.
I’d recommend just paying off the card my dude. Also, consider putting 10-15% of everything you make into a retirement account. Rule of thumb is that money doubles every 7 years, so your future self will thank you. Best of with your athletics and finishing your education!
Pay off the credit card and put the rest into a high yield savings account. It’s a good start toward an emergency fund which I’m guessing you don’t have right now. If you graduate completely debt free, you’ll already be in better shape than almost everyone else your age at that point.
Congrats on the change of mindset. The fact that you’re asking questions says, for the most part, you’ll be successful with your finances in the future. As painful as it is, the first step is to get rid of that CC balance and never spend on it again unless you pay it off immediately. I’d put the remaining $2900 in a HYSA for a starter emergency fund – this way, an emergency (your high mileage car for example) becomes an inconvenience instead, and you remain out of debt.
Whatever you do with it, keep some aside to pay taxes you may owe on scholarships and grants in excess of qualified education expenses.
You may not owe anything if you don’t make much money this year, but it doesn’t hurt to be prepared.
start budgeting. Get yourself YNAB or something like that. Im 26 and have a history of stupid financial descicions, impulse purchases etc..since i started using budgeting tools (ynab in my case) 7 months ago, for the first time in my life i spend less than i earn monthly, resulting in actual savings for my future. It has legitimately changed my life.
You could get 100k, but if you dont budget and blow it all, its gone forever. If you budget your money, be it 100k or 4k, you will make much better use of it, be prepared for the future and live life without anxiety. My whole month, including the next month is all financed, birthday gifts for family is already budgeted, the vacation i plan to take in the summer also, just because I actively save towards these specific goals with individual savings categories in my budgeting app. **start budgeting!!!**
Live your life! 2k when you are working isn’t terrible . Take the money, divide it by number of weeks in the semester, and spend that weekly
So I’m in the college athletics realm as well.
Please pay off your cc and any other debt. After, put the money into a high yield savings account.
If you can’t meet the minimum to open one.
Open a brokerage account with fidelity and put it into spaxxx. It’s fidelity money market fund.
Let that be your emergency fund and slowly grow.
2,900 sitting in an account for a few years is a solid emergency fund.
Don’t fret. As a d1 athlete, your going to be successful.
where’s the NIL $$?
Pay off your CC and then rest in an IRA or reinvest in your business if deploying more capital will increase your monthly take.
You can only invest in an IRA if you have earned income.
If I were you…
1. Pay off the credit card. Your interest is probably around 25% which is $32 or more lost every month to nothing.
2. If you have to carry a balance on the credit card for any reason, carry lower than 10% or $200. When you carry $1500 on a $2000 credit limit (75% usage). It’ll drop your credit (fico) score quite a bit. If you pay off the credit card, your fico will shoot back up next month.
3. I’d put the rest of it in a high yield savings account. Some of them are paying close to or more than 5% right now. I’d keep that money there in case you have any car issues or anything else.
4. For now and in the future, I’d make sure to protect your credit score. That means, NEVER be late on a payment and don’t carry a balance, no matter what anyone says. You’ll get better rates on future cars, loans and your house(if you choose to get one) in the future. Also, if you’re going to use a credit card, I’d look at if you could qualify for one that had better cash back, assuming the discover card you have isn’t giving you that. If you could get one at 2%, that could pay dividends over time. Make sure there is NO ANNUAL FEE if you do get another credit card. You don’t want to pay a fee to have a credit card every year if you can avoid it.
You have to change your mindset! Spend time listening to reputable podcasts on finance, credit cards, etc on Spotify or reputable Youtube Videos, to get different perspectives. I grew up poor too. One of the biggest lessons I’ve learned is to never listen to BROKE people about how to make money.
(Not financial advice, just what I’d do)
Unless you plan on living in a city with really good public transportation you’re going to need a car for transportation. You can’t rely on your friends or Uber to get to work every day and if you have a job where you have to drive places you’ll be able to rely on them even less. $4400 may sound like a lot to a college student, but depending on where you live and what you do, that’s only 1-2 months pay. It sounds like the car you do have is close to the end of its life. I’d put the money in the bank for now. Don’t touch it unless it’s an absolute emergency. Drive the car you have now until it dies. Then when that happens you have a down payment on a newer car. Don’t spend it on a high end car though. You talk about the cost of gas yet admit to putting 93 in your car because that’s what it recommends. If a car needs 93 octane it’s too expensive for most recent college grads. Get a car that takes 87. Look at a car as a tool to aid you in your life, not as something to impress women or friends.
I know you’re receiving a lot of other advice here but most of the investment advice you’re getting is long term investment advice. Money invested that way isn’t easy to get at and could have severe tax consequences if you do. It’s always good to have a rainy day fund where you can get the money quick in an emergency. $4400 is more along the lines of that rainy day fund amount than it is an invest for your future amount. Just don’t touch it unless it’s an emergency.
As for your current car. Do simple maintenance on it to keep it running. Brakes and oil changes will keep the car running but if something like the AC goes deal with it. Then when something goes where the fox is more than the car is worth junk the car and get another, reasonable car.
Pay of the credit card fully, and then set up the credit card to autopay the “full statement balance” each month so that you never pay interest on a credit card again
Pay the card off first! Save @ least $500 for emergencies. Use what’s left very sparingly until you are finished with school and have a larger income. I’ve been in similar shoes & did NOT pay off my card first, then before you know it the money is gone. Be Smart and pay off your debt first!
Are you self-employed on that side gig? If so, set aside 25% for taxes!!
Get rid of high-yield debt first then put whatever you can, aside from your savings for your basic needs, into a ROTH IRA. The money will grow tax free and your future self will be insanely grateful.
1st off, that 2006 doesn’t need 93 in it. It’s a 2006 with issues. That’s like going down to the strip picking up the oldest unloyal bad built sleez wifing & taking her out to 3star Michelin rated restaurants & showering her in jewels & designer clothes every couple of days. Think bout it.
P.s. Of course I went OD over board but you get my drift😂😂😂
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