Finance 101

Opening a Bank Account

There are dozens of banks to choose from when opening a bank account. You can make one online or in person, but you’ll need a government-issued ID, personal details such as your SSN, and a way to fund your new account with an initial deposit.

You must be 18 years or older to open a checking account in your name only. Minors can’t own a checking account in their name alone (must be with guardian oversight).

When looking at certain banks, you’ll want to know what to look for when opening your account. You’ll ideally want to look for no monthly fees, low/no overdraft fees and free ATM fees for checking accounts. For savings accounts, you’ll want to look for high interest rates (which will keep putting money in your savings as long as there’s money in it) and no monthly fees.

Savings Account vs. Checking

Savings

Savings accounts are primarily used for long-term savings. The earlier you start your savings, the better.

Checking

Checking accounts are primarily used for accessing money on a daily use.

our credit score is a prediction of your credit behavior. It’s higher if you pay your credit card debt off in time and in full and predicts how reliable you are and how likely you are to pay off a loan or your debt on time.

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Many factors impact your credit score, including:

  • Your bill-paying history
  • Your current unpaid debt
  • The number and type of accounts you have
  • How long you have had your accounts open
  • How much of your available credit you’re using
  • New applications for credit
  • Foreclosures
  • Debt sent to a collection

Understanding Your Score

For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score in the U.S. reached 714.

The better your credit score, the more money you can save on insurance and interest rates. With a good score, it will be easier to get approved when applying for a new credit card or trying to get a higher credit limit. It'll also get you better rates on car insurance and give you more housing options. That said, different lenders use their own criteria for deciding whom to lend to and what rates.

Loans

Financial aid loans provide low-interest funding for students and parents, typically based on financial need. These loans must be repaid. To be eligible for most loans, you must complete the Free Application for Federal Student Aid (FAFSA) each year you attend college.

Interest

In short, interest is a charge that accumulates for the use of an asset. Assets can be cash, vehicles, property, and consumer goods. Interest accumulates on loans and any credit cards. Think of it as like paying rent on the money you borrow.

Expressed in annual terms and not in month or quarter terms. Includes interest rate and additional fees for a big picture view of a loan cost.

Calculation of interest based on the principal balance plus any outstanding interest accrued. Compounds over time, like with a credit card balance.

The interest rate you need to earn on a given amount of money in the future. It's the rate that the Federal Reserve charges banks for short-term loans.

Set rate of interest that doesn't change throughout the life of the loan.

The interest rate that banks or financial institutions charge their most creditworthy customers.

Calculation of interest using the principal balance of a loan where the prinicipal is the same every year and a fixed percentage of the prinicipal is borrowed.

Using your Aid Refund

Sometimes in college, you’ll get money back for your financial aid refund if you have money left over from what you paid in school fees and tuition. Your aid refund will come back to your eBill before the semester you paid for is over.

Use it wisely! When you receive your refund, ideally, you should be prioritizing using that money towards paying back your loans, bills, rent, car payments, insurance payments, etc. Your future self will thank you.

Good Debt vs. Bad Debt

Good Debt
Good debt is something that can benefit your long-term financial wellness. A mortgage on a house, student loan for your schooling, or investing in a business may be considered good debt just because all of those things could increase your net worth and/or help you generate value.

Bad Debt
Bad debt is money borrowed to purchase assets that are depreciating in value and will not increase your wealth because the goods have no lasting value. High credit card debt and cars can be considered bad debt. Things that are unplanned in your budget or things that negatively impact your credit score (like store credit can) are also considered bad debt.

To manage your balance effectively, consider signing up for a payment plan for non-registered students only. This option allows you to break up the payments into manageable installments, making it easier to stay on top of your finances. Complete this promissory note promptly and return it to us at bsufinancialwellness@bsu.edu

  • Only you know your spending habits and what you need to buy every week.
  • Set financial goals for yourself. Write down your spending habits per month, devise a plan, and set limits for yourself based on your needs. Be sure to accommodate for things like bills, rent, groceries, gas, general travel expenses, school fees, books, and monthly subscriptions.
  • Monthly Budget Planner