Financial Resources

Credit cards, savings accounts, student loans, oh my!

We get it - managing your money can be confusing and stressful! That’s why GMercyU’s Money Matters program is here to give you the resources and information needed to make smart financial decisions now and in the future.  

Budgeting

As a student, it's important that you have a budget and stick to it! You're already investing a lot of money into your education, so you need to be aware of how much money you have and how you're spending it. 
Sound intimidating? Don't sweat it – there’s an app or website for everything! 

Here are some of our favorites: 

• Mint is a one-stop shop for money management. The Mint app calculates your spending by category and uses that information to make a basic budget, which can be adjusted as needed. 
• Need to write things on paper? MyMoney.gov has great resources, including budget worksheets that does the math for you. Print it out and stick it on your wall!

Saving

You may think it’s impossible to save while you’re in college but everything counts. Start small, but think big!

• Set goals. Don’t want to move in with your parents after graduation? Considering buying a car? The first step is saving some money! Research the costs and start putting money aside, even if it’s just a few bucks a week. 
• Make a plan. Did you know that people with savings plans are twice as likely to save successfully than people who don't? Come up with a plan to help you reach those big financial goals. 
• Save Automatically. Before tending to bills and other expenses, the first thing you should do after getting paid is pay yourself. Schedule an automatic transfer of a fixed amount from your checking account to a savings account. Your bank or credit union can help you arrange this.

As always, BuzzFeed has you covered with 25 Money Saving Tips Every College Student Needs to Know.

Student Loans

Despite what you may hear on the news, student debt isn't scary- especially if you learn to manage it properly. Having student loans can teach you to be a responsible borrower, which can help improve your credit score and help when it comes to making big purchases, such as a car or house. The key is understanding exactly what you're getting yourself into, especially what different kinds of student loans can entail.

Federal Loans. These loans are awarded to students by the Federal Government as part of financial aid packages. Every student with a high school diploma is eligible for a federal loan, you just need to fill out the FAFSA. You can learn more about your options on our Federal Financial Aid page.  

Private Loans. These loans are offered by private banks and financial institutions. Interest rates and eligibility are based on your credit score, but you can apply and state a parent or guardian as a co-signer. Generally speaking, private loans tend to come with less generous repayment options and higher interest rates than federal loans, so make sure you research all of your options. Looking for more information? Check out 3 Basic but Crucial Things to Know About Student Loans from the New York Times and Forbes' 10 Things You Absolutely Need to Know About Student Loans.

Building Credit

So, what is credit anyway and why is it important? Credit is borrowed money that you can use to purchase goods and services when you need them. Having good credit is crucial for making major purchases--like a car or house--and can also be used by employers and landlords as part of the selection process.

There are four main types of credit:

1. Revolving credit. You are given a maximum credit limit and you can make charges up to that limit. You carry a balance (i.e. revolve the debt) and make a payment. The most popular example of revolving credit is credit cards.
2. Charge cards. Although similar to credit cards, if you use a charge card for purchases, you must pay the total balance every month.
3. Service credit. This includes agreements with service providers--like electricity, cell service, and cable--where you agree to pay them for a specific service each month.
4. Installment credit. Creditors agree to loan you a specific amount of money, which you agree to repay along with interest in regular installments of a fixed amount over time. Car loans and mortgages are examples of installment credit.

The goal is to make sure you have good credit, which is measured by your Credit Score. Want more tips and tricks for managing your credit? GMercyU Accounting Professor Carlo Silvesti breaks down what credit scores are and why they’re important and five things you should look for when selecting a credit card.

Investing

Take your money and make it grow! Investments help your money grow over time, allowing you to reap the benefits later in life. It’s never too early or too late to start and you have plenty of investment options to choose from.

The three most popular types of investments are:

1. Stocks.Investing in stocks allows you to buy ownership shares in a company. Your return on investment (ROI) depends on the successes or failures of that company; this is highly affected by what’s happening in the stock market in general and the economy as a whole. This volatility can make investing in stocks alone risky.
2. Bonds. Bonds are loans that investors make to corporations, governments, federal agencies, or other organizations in exchange for interest payments over time and repayment of the bond itself at its maturity date. Investing in bonds produces the risk that you might lose money, especially if you buy an individual bond and want to sell it before it matures; the level of risk depends on the type of bond you own.
3. Investment funds. These funds pool the money of many investors and invest according to a specific strategy. They offer diversification and professional management featuring a variety of investment strategies and styles.

The Financial Industry Regulatory Authority (FINRA), a non-profit organization authorized by Congress to protect investors, is a great resource for first-time investors. 

Taxes

Taxes are something nobody enjoys thinking about, but it is very important that you educate yourself. This will ensure that you fulfill your legal and fiscal obligations and avoid penalties or other problems. Even if you only work part-time, you’ll still be expected to file a tax return each year--especially if you file the FAFSA and receive federal or state aid to pay for your education.

So, what kind of taxes are we responsible for paying?

Federal Income Tax. This tax is levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. They are applied to all forms of earnings that make up a taxpayer’s taxable income, including employment earnings or capital gains..

State Income Tax. Forty-three states levy individual income taxes--it is a major source of government revenue. Tax policies and procedures vary by state. In Pennsylvania, the personal income tax rate is 3.07% and is levied against residents or non-residents; if you’re an out-of-state student that works in Pennsylvania during the school year, you need to file PA state income taxes on eight different classes on income: compensation, interest, dividends, net profits from business operations, net gains or income from dispositions of property, net gains or income from rent/royalties/patents/copyrights, income derived from estates or trusts,and gambling or lottery winnings. The Department of Revenue has detailed information about PA tax code and how to file state income tax.

Local Earned Income Tax. This varies by state, but here in Pennsylvania, employers are required to withhold and remit the local Earned Income Tax (EIT) and Local Services Tax (LST) on behalf of their employees. These tax percentages vary by county and might be higher for non-residents. You can look up your withholding rates by address online through the PA Department of Community and Economic Development.

Check out GMercyU Accounting Professor Carlo Silvesti's Tips for Student Taxpayers.  

If you have specific questions about tax processes, contact a registered tax preparer practitioner--like CPAs, Attorneys, or Enrolled Agents. The Internal Revenue Service (IRS) also has useful information about filing your federal taxes. Residents of Pennsylvania can find information regarding state taxes through the Department of Revenue.

Other Resources

Money Tips. Find practical money tips to help better manage your finances.

Financial Calculator. This one-stop-shop can help you obtain information about budgets and goals, credit and debit, loans, family and life, savings and investments, and more.