Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, August 23, 1993 TAG: 9308200378
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
How you handle your finances now will affect your peace of mind for the next four years.
More than that, however, you are beginning to write the credit record that will follow you when you leave campus.
The Virginia Society of Certified Public Accountants offers a primer for freshmen - and upperclassmen who need a fresh financial start.
The first step in taking charge of your finances is to prepare a budget before the semester begins. It should be a realistic plan for meeting your living expenses at college.
First, identify your total income and total expenses. If you're responsible for paying for tuition, room and board costs, be sure to set aside enough money for these expenses.
Then estimate the money you need to cover your day-to-day expenses.
For the average college student living on campus, typical budget categories might include food, transportation, school-related expenses, personal expenses and entertainment. Don't forget to set aside money for trips home to visit your family.
Then it's time to add up your income. Whether your income comes from parents, savings, a part-time job, grants and student loans, be realistic about the amount of money at your disposal.
Now compare your total income with your total expenses. If you're lucky, your income will cover your expenses - or at least come close.
If you find that you have more expenses than income, you'll have to make some adjustments. Perhaps you can cut discretionary expenses, such as for entertainment. Or maybe you can increase income by finding a job or working more hours.
If you haven't already done so, now is the time to take on banking responsibilities.
As a general rule, it makes more sense to open an account in your college community rather than in your home town.
Be prepared to shop around for a bank that offers you what you need in convenience, service, banking products and costs.
A checking account is a safe and efficient way to keep and spend money.
To maintain your checking account in good standing, record each deposit, check and automatic-teller transaction immediately.
Be sure you know how many days your bank will take to credit your account with a check you deposit.
Bank charges for bounced checks are high, typically $12 to $20 in this part of Virginia, so be careful.
On the back of your monthly checking account statement, you'll find a worksheet for reconciling your account. Taking the time to balance your bank statement each month can help you avoid problems.
A major credit card can be a valuable financial tool for the student who knows how to handle debt.
Before applying for a card - or accepting one that is offered to you - compare the amount of interest you will pay for outstanding balances. This amount can vary significantly from issuer to issuer, so you want to see which offers you the best deal.
In addition to looking at rates, compare annual fees, the method of computing interest and fees charged for special circumstances such as late payments or going over your credit limit.
But use the card for convenience or for buying something you really need such as a lamp or bedspread or books. Don't rely on using credit when your cash runs out. You'll only find yourself mired in debt at the end of the school year.
Remember that you may have to file an income tax return if you have a part-time job or receive any earnings from investments.
The Virginia CPAs said most single students can use Form 1040EZ, a shorter and simpler version of the standard 1040. IRS Publication 4, "Student's Guide to Federal Income Tax," is a source of helpful information.
Basic money-management skills are critical to your financial well-being.
Maintaining a realistic budget, developing banking relationships, getting and using credit and filing a tax return can prepare you for your post-graduate wealth-building years.
by CNB