A Financial Game Plan for Students

Asha Santee loves shoes. Especially sneakers. Every time she got money, she bought a pair. Sometimes even two. While her feet were covered, her wallet was empty.

“I felt like I’d just gotten money yet was always asking, ‘How come I’m broke?'” the 20-year-old Howard University senior said with a laugh. “My biggest mistake was spending all my money on material things, like new purses and new shoes.”

student debtTo get on offense for her financial future, the forward for the Bisons’ women’s basketball team attended a seminar sponsored by a program called Playbook for Life.

Aimed at college athletes and students, Playbook for Life teaches the basic concepts of financial literacy, covering topics like budgeting, savings and investing, credit cards and credit debt, and sticking to goals.

The program is a free service offered by The Hartford Financial Services Group in partnership with the NCAA. Based on surveys of college students and their parents, as well as professionals fearing a gap in financial preparedness between young adults and their older coworkers, Playbook for Life is responding to a need articulated in the marketplace, according to Susan Coleman, the educational advisor to the Playbook program and a professor at the University of Hartford.

“It made a big difference and really gave me an in-depth explanation about budgeting, loans, and interest and how it works,” Santee said.

To make sure you don’t get left out of the game, check out some of these moves from the Playbook.

BUDGETING
It’s easy to find yourself wondering where your money went. Putting a budget in writing can show how you’re actually spending your money and what you can do to help control where it goes.

Playbook for Life gives a practical example of how a little money here and there can add up: spending $5 a day on a coffee drink comes out to $150 a month, money you could be putting toward credit card debt, a car payment, or earning interest in savings.

“I allow myself to buy shoes every now and then, only when I need them,” Santee said. “After I cut back I saw my funds lasting a lot longer than they used to.”

Yet it’s not to say that things like a Starbucks frappuccino or new pair of Nikes are out of bounds; just remember to add entertainment and shopping expenses into your monthly budget.

Don’t forget to include savings into the budget; treat it with the same importance you would utility bills, never saving what’s simply left over. In fact, the earlier you start saving, the earlier that money can start working for you.

COMPOUNDING
The best thing you can do is get off the bench when it comes to saving. The power of compounding lets your money do all the work.

“Start saving and investing as early as you can,” Coleman said. “By doing it every paycheck in your first real job, you can accumulate substantial amounts of wealth. If you wait until your 30s, that amount diminishes substantially.”

Coleman suggests participating in 401Ks, mutual funds, or IRAs.

“When I explain to students that they can be a millionaire by the time they’re in their fifties, they say, ‘Wow, I never realized that,'” Coleman said.

CREDIT
Playbook for Life not only teaches you how to sit back and watch your money grow, but also coaches defense against credit card debt.

“So many young adults see credit cards as a convenience, but don’t think about high interest rates, fees, or costs,” Coleman said. “They get students into patterns of impulse buying, which can lead to real financial difficulty.”

The program advises you to borrow on school loans or a mortgage, rather than pizza and movies, because you’re left with assets like education and a home instead of just payments. Always pay on time and as much as you can; only paying off the minimum won’t get you out of debt.

When using credit cards, factor in the cost of borrowing money. The Playbook illustrates how a price tag often doesn’t end up being the final cost. If you charge your $1,000 Spring Break trip to a credit card with 12 percent interest and only pay the minimum payments of $15, it will actually end up costing twice the original price at $2,100.

STICKING TO IT
Whether it’s a basketball shot or financial success, there’s got to be a follow-through.

“It was really hard to stick to a budget at first because I wasn’t disciplined,” Santee said. “But I didn’t want to live pay check to pay check. I have my mind set on getting my life off on a good foot – and not buying shoes!”

To download or request a Playbook for Life and get more tips on everything from taxes to insurance to evaluating job offers, visit www.playbook.thehartford.com.