What You Need to Know to Prepare Your Students for Billing Perspectives and Risks
Studies show that since 1970, the cost of higher education has risen more than 1,100 percent as compared to other economic indices such as the cost of a car, healthcare, housing, etc. While that increase is certainly not unique to Au.D. programs, this meteoric rise in cost is significantly impacting students and their families, as well as the profession as a whole. How can you help your students position themselves for financial stability in the face of mounting educational loans and an uncertain economic forecast? Here are some ideas.
Make sure students have access to budget-wise tools and resources
There is so much involved in financial-planning decisions that the concept can be overwhelming for young adults. Many people do not get started because they simply do not know where to start. Sound financial planning comes down to three simple steps:
Developing a budget for life and for any large financial projects (wedding, buying a house, remodeling, vacations, etc.). A good budget breakdown is the 50/20/30 rule, and the graph below details these allocations.
Help students consider this allocation with every dollar they spend going to one of three categories: needs, savings, or wants.
- Fifty percent of a budget should go to essential expenses. These are the regularly occurring expenses that always have to be paid to keep your life going, such as housing, transportation, groceries, and utilities.
- Next, 20 percent should go to financial priorities. These are expenses that accomplish important financial tasks, such as paying off loans, building savings, saving for retirement, and more; they generally include savings, debt repayment, and financial contributions.
- Lastly, 30 percent should go to lifestyle choices. These are funds used for daily living and expenses such as dining out, shopping, and other fun spending.
There’s good news for student budget management! There are now many user-friendly apps and online resources to help young professionals begin effective personal budget management. These include Mint, YNAB (You Need a Budget), Mvelopes, and LevelMoney. Of course, more conventional tools such as Quicken, QuickBooks, and good old-fashioned Excel spreadsheets are also available.
Encourage students to create meaningful budgets and familiarize themselves with associated financial resources and tools as part of their graduate educational process.
Financial solvency begins with saving. Time is money, so helping students see the value in “feeding the piggy bank” for emergencies and retirement is a big part of their financial future.
Millennials are already saving more than other generations, but be sure your students have the tools needed for success.
Here are some student-friendly tips for students to use when starting a savings program:
- Pay yourself first! Be sure to save what you need each month before you pay bills.
- One of the best ways to do this is to set up automatic savings transfers with your employer.
- There are plenty of savings “tricks” you can use: Pay only in cash and save change. Each day, save $1 to $5 before you buy anything, etc.
- Savings technology is millennial friendly! There are many great web- and text-based savings apps. A good example is Digit. Simply text Digit when you want to save (for example, each morning — hint, hint).
- Daily transfer max is $150.00
- FDIC insured
- If Digit were to go out of business, all money is transferred back to your bank account
Encourage students to establish financial goals. Goals are dreams with a deadline. Students are primarily focused on successfully finishing their educational program, achieving their degree, and finding employment. To ensure they are motivated to achieve financial health as well, provide opportunities for them to develop and discuss their personal, professional, and financial goals. Typical financial goals would be things like debt reduction, buying a house, saving for a wedding, etc. Once goals are established and the required actions are relevant, motivating young adults to embrace the strategies and resources to achieve these milestones becomes easier.
Need more information to share with your students regarding personal financial health? Audigy University can help! Contact Dr. Bettie Borton, firstname.lastname@example.org, for additional resources.
Watch for Audigy University’s student loan repayment strategies in our fall newsletter!