Financial Aid

Financial Literacy

In order to prepare students for global citizenship and responsible leadership, we must also ensure financial literacy becomes integral to you. We have compiled financial resources to aid in this journey and to prepare you for life at and beyond Rollins.

Budgeting

Why do you need a budget?

You have to know where you are to know where you are headed. Budgeting is simply the first step in the process. There are many websites and apps to help you, so even if accounting isn't your strongest area, everyone can keep their finances in order. 

How to create a budget?

1. Create a starting budget using your best guess of what you spend each month. Combine expenses into categories like: books, meals, rent, utilities, gas, entertainment, and miscellaneous.

2. Track your expenses for at least a month. Use an app, spreadsheet, or piece of paper. Just be sure to write down each expense. You might be surprised where your money actually goes.

3. Review your expenses. Decide if each expense is necessary or if you have alternatives (either eliminating the expense or reducing the expense in other ways). If that expense isn't adding value to your life or isn't a necessity, then you should consider reducing or eliminating it.

4. Make sure you have the right categories in your budget based on your expenses and adjust the figures.

5. Review your budget monthly for accuracy and make any necessary changes.

Importance of an Emergency Fund

Setting money aside for life's unexpected events is extremely important to create a solid, financial foundation. Life crises will happen. If you can have a cushion to soften the financial impact, the crisis may only be an inconvenience instead of a financial catastrophe. True financial emergencies (i.e. medical expense, car expense, or home repair) can impact you well beyond the event if you have not prepared.

Many experts suggest accumulating 3-6 months of expenses. That can be difficult in the beginning, so don't be afraid to start small (if necessary) and increase your monthly savings. The key is to start now. Experts also suggest that if you're in debt, you should still set an emergency account goal (i.e. $1,000 or so) and then pay down your debt. If you don't have an emergency account, you will likely just add to your debt when a situation arises.

Get creative in setting up your emergency account -- sell stuff you no longer need; take on another part-time job until you fund your emergency account; look for bank account that provide bonses for saving with them. Every bit helps and you might be surprised how quickly $10 here and there can quickly add up.

Saving and Investing

Beyond the Emergency Fund, the way to gain financial security is by saving and investing. This might not be on your radar as a college student, but if you can make saving and investing a habit, you are building a foundation for financial success. Now is the best time to save for the future.

Where to start?

Plan: As with budgeting, you need to set goals and establish a budget. Are you saving for a short-term or long-term goal?

Compound interest:Principle that your money will grow faster as your rate of return is calulated on the initial investment plus all accumulated interest. Also referred to as interest on top of interest. As an example, if you invested $1,000 today at an 8% rate of return and let it compound for 20 years, that investment would be worth $4,660.96. If you could invest it for 30 years instead, the additional return plus compounded interest will result in an investmet value of $10,062.66. The longer the investment timeframe, the more you are able to increase the potential outcome.

Where to Save/Invest: There are many financial institutions and options to save/invest. The key is to ensure the financial account aligns with your goal. For example, if you're saving for a vacation, this would be a short-term goal and you want to ensure a steady, predictible rate of return. On the other hand, if you're saving for retirement, your timeframe is likely 30 years or more and you may want to consider other options to increase your rate of return.

Track Your Results: Lastly, track your savings and investment goals. If you receive an annual raise, this is a great time to re-evaluate your investments. Experts often recommend that you allocate a portion of the raise towards your long-term goals. With the power of compound interest, even a small amount today can make a significant impact in the future!

Bonus: See the power of compound interest by using the U.S. Securities and Exchange Commission calculator. Keep in mind, compound interest can either benefit you (through saving and investing) or cost you (credit card and other debt).

Debt

Debt is an obligation that must be paid back (often with interest). This means that what you purchased today will potentially cost significantly more if you took on debt. Sometimes, loans are needed in order to achieve something, purchase a need, or add value. If you must borrow, be an informed consumer and borrow only what you need. You might ask yourself a few questions before taking on debt. Ask yourself: Will I remember what I bought?; Is this something of value?; and will the total cost (including interest) be worth it?. If you answer "no" to any one question, you should consider not purchasing until you've saved up enough to purchase without taking on debt.

Credit Cards:

You've probably received multiple offers for credit cards. Be careful. Often times, using credit cards may encourage us to spend more than we have or to spend what we haven't budgeted. This can lead to interest charges which are not in the budget. Any item you purchase on credit that is not paid in full will be much more expensive than originally thought because of compound interest. Remember, compound interest is great for our savings and investments, but an unnecessary cost and drain to our budget. If you use credit cards, make sure you only spend what you have in your budget which will ensure you pay them off every month.

Student Loans:

If at all possible, use alternative ways to fund your education instead of borrowing. If you must borrow, then maximize your investment into your education. Seek out low interest, federal loans first. The maximum you can borrow as an undergraduate is $31,000 (or $57,500 if you are independent) or $138,500 as a graduate students. You can estimate your monthly payments by visiting the U.S. Department of Education's Repayment Estimator.

Alternatives to Borrowing:

Seek outside scholarships: Set up an account with Fastweb and other free, scholarship search databases. Also, check out listings on our scholarship website. Most outside scholarships received can help reduce your educational expenses.

Seek part-time employement: Working on campus is a great way to earn some extra spending money and immerse yourself on campus. Please visit the Office of Student Employment for current opportunities. They are also a great resource for building your resume and looking for local opportunities as well.

Consider monthly payment plans: The Student Account Services Office can assist in setting up a monthly payment plan.

What to do if you're already in debt:

Pay more than the minimum. Even an extra $25 will directly lower the amount of the debt which reduces future interest charges. For example, if you have a $10,000 loan at 5% interest, your monthly payment would be $106.07 and the debt would be paid off in 10 years. If you add $25 to your monthly payment, you will reduce the amount of time to 7.7 years and saved nearly $670! That's money you can then invest in your or pay down other debt.

Make Prepayments: Most loans allow payments before they are due. If you make any amount of payment before they are due, you will save on interest charges. Even if you can only reduce the overall debt by a small amount, that's still savings to you.

Make Extra Payments: Similar to prepayments, you're making a payment that isn't due. If you're monthly payment is $100 and you have a tax refund of $500, you should consider using some or all of that refund to make an extra payment on your loan. As with the other options, your overall interest paid will reduce since this extra payment will go directly to your principal balance.