-- Help a student with his money --

**Joan.of.the.Arch** · 07-31-2010, 06:59 AM

Put it in a savings account that you will not touch and label it as being scholarship money STILL. Money that is to keep you in school. You are a junior and you think your expenses are more than covered. If something unexpected comes up during the coming year this money will be there for that so that you won't have to quite school or cut back to part time while you earn money to cover your broken down car or whatever.

If you get through the junior year without needing to spend it, still hang onto it in savings. Many state funded scholarships are being trimmed back. I don't know about privately sourced ones. But scanter state scholarships would mean more competition for the private ones as well. So if you finish your junior year with savings, hold on to it for your senior year.

Senior year often brings extra graduation related expenses, fees for grad school applications, moving expenses, new rental deposits, etc. So you probably do have some new expenses coming your way. Be ready to be able to say yes to the best opportunities that come along by having the savings to get you there.

**MonkeyMama** · 07-31-2010, 08:31 AM

Agreed with Joan. I would put it all in a savings account.

College can be an expensive time. I am thinking to my own college days when I had a lot more expenses (like rent and tuition). BUT, that said, my husband's budget was a lot more like yours in college. He always worked, and saved tens of thousands of dollars which came in handy for a down payment on a home. He also had to replace his car sometime in college (I had to replace mind about the minute I graduated, also).

Build yourself a nice savings account, and then when you graduate and get paid good money you can jump head first into investing and savings for retirement. Get used to keeping at least $5k - $10k cash in savings for a rainy day. It will make life infinitely easier when you are on your own.

We could have put more of our money into investments, but that wouldn't have been as useful in when we were 20, 21, 22. My opinion, anyway.

**jpg7n16** · 07-31-2010, 12:01 PM

I'm with the keep it in savings crowd. For a couple additional reasons:

-It's a buffer against consumer debt if car breaks down, etc.
-It's a head start to your EF when you graduate in 2 years (which at that time will show you a clearer picture of what you need for a 3-6 mo EF)

Oh and please tell us that you have no CC's and/or student loans...

**snshijuptr** · 07-31-2010, 12:36 PM

Put all of the money into the highest interest savings account you can get. Unless you are getting some other perks from a savings account, interest rates are all that matter. Don't buy into bank loyalty because unlike credit cards which boost your credit score, you don't get anything from savings loyalty.

Graduation is ridiculously expensive for many reasons: ceremony, student loans, moving, possible weddings/relationship stuff, buying business clothes, etc. You will want to live as cheaply as possible for as long as possible and this money can help give you a debt free start.

Be careful that your scholarship money can be justified as having gone to "education expenses". They could claim that you need to give the money back if they somehow sent you too much.

Some will disagree, but get yourself a student credit card and use it for NEEDS only. That means gas and groceries. Then pay it all off every single month. If you are responsible, you will want to have decent credit built up by the time you graduate so you can get an apartment or home all on your own. You don't want to be the 24 year old with a huge home down payment, but no credit.

Finally, try out various budgeting methods. You don't spend much now and everything is really simple. Get used to tracking your spending and limiting yourself. You have time enough now to really keep an eye on your spending and learn how YOU like to budget.

**jpg7n16** · 07-31-2010, 06:00 PM

FYI, the OP posted this reply in a separate thread, and is currently experiencing technical issues with trying to post:

Originally posted by DrSavin' View Post

I am placing this here in response to my original thread. Everytime I have attempted to reply (since 10am) I get a "database error" message. This is the only solution I can think of.

I should have added that I have an on campus job that gets me $500 a month. This is usually enough to cover expenses and leave me some for savings.

I have no student loans, and, to be frank, credit cards scare me. I pay my own phone bill and car insurance. Are these good for building a credit score? Should I really get a CC to build more credit?

It seems like savings has been the most suggested and will be what I probably go with. I have looked at getting an ING account. Does anyone have experience with ING?

If I can I'd like to buy a house when I graduate. I will be going to Medical School after undergraduate and would rather not pay rent.

Thank you so much for your inputs!!!!

(edit: I can't reply here either >.<)

Try logging out, and reopening the browser to see if that works. Since I'm able to reply it is likely a local issue for you.

**jpg7n16** · 07-31-2010, 06:03 PM

Unless you are trying to borrow money, you don't need to worry about your credit score. The phone bill and insurance won't help it.

So good work on the no Student Loans and/or CC's

I'm also assuming you mean, "I'd like to borrow a bunch of money - by means of a mortgage - to buy a house, because I don't want to rent"; that may or may not be the most appropriate action for you.

Usually, we'll suggest a 3-6month EF in place, with 0 debt, and an additional 20% down payment saved up - before purchasing a home. I doubt this $3k will get you there. Renting's not that bad actually.

**DrSavin** · 08-01-2010, 07:41 AM

Thank you all so much for the replies!

The school is definitely going to give it to me, it's their policy with excess money. It will be direct deposited into my checking account. From there, I will send $1000 to my mother's account. $1000 will go into an ING checking account, and another $1000 will get locked into a CD only if the interest rate is higher than ING's savings account. If not it's going into the ING fund too.

I think I'm going to use the remainder to get things I need like clothes. I haven't gone clothes shopping since I was a freshman in highschool. I also plan on buying a mountain bike that will cost me around $500. The remaining amount will go into my Wachovia savings account and left alone.

Good plan?

**DrSavin** · 08-02-2010, 07:32 AM

Originally posted by lbs

Oh and please tell us that you have no CC's and/or student loans...

Did you copy and paste this? I don't have either.

**jpg7n16** · 08-02-2010, 08:20 AM

Originally posted by DrSavin View Post

Thank you all so much for the replies!

The school is definitely going to give it to me, it's their policy with excess money. It will be direct deposited into my checking account. From there, I will send $1000 to my mother's account. $1000 will go into an ING checking account, and another $1000 will get locked into a CD only if the interest rate is higher than ING's savings account. If not it's going into the ING fund too.

I think I'm going to use the remainder to get things I need like clothes. I haven't gone clothes shopping since I was a freshman in highschool. I also plan on buying a mountain bike that will cost me around $500. The remaining amount will go into my Wachovia savings account and left alone.

Good plan?

Hmmmm... see this is one of the problems I think you'll have with keeping it in savings: you really want to spend this money!

Helping your mom out is honorable. And saving a lot into a CD or ING account account is better than nothing. But then the rest, you want to spend. 1st it was a motorcycle, then a house, and now a mountain bike.

Now I won't say that you should never spend this money. And if that's what you want to do, then go ahead and enjoy the bike

But be careful that you don't spend it all. Then you'd be right back where you started.

Money for clothing should be part of your regular monthly budget. Start including like $20-50/month for projected clothing expense. And save it up, then buy some clothes.

**Joan.of.the.Arch** · 08-02-2010, 09:11 AM

Seriously, if you are going to med school, you need to hang onto this money. Every dollar you have available during med school is money you will not need to borrow. It can be very hard to make money to support yourself while in med school, so in addition to tuition, you might find yourself borrowing for living expenses.

If you do feel a strong pull to just SPEND this money, then look into spending it on stuff you will need in med school. Mundane stuff like a decent pair of shoes, a couple lab coats, excellent stethoscope, otoscope, whatever "scope-y" stuff is relevant, reference material that you are certain would be necessary. If you've got to spend, let your spending be helpful for you.

**DrSavin** · 08-02-2010, 09:25 AM

I'm not entirely sure what I will need when I do get to medical school, so I think saving it until then will be my best plan of action. As for the ING account, I have done some looking around and found that a Sallie Mae High Interest Savings Account would be a better option as they have a 1.4% rate as opposed to ING's 1.1% rate.

I don't think that I'll be budgeting for clothes, however. I'm not a big proponent of fashion. I just really need some new clothes because of wear and tear.

I've decided against the CD. If I were to need the money having it in a CD would not be the best option. The savings account's rate vs. the 12 month CD's rate is not different enough to merit using a CD. The savings account will keep the money accessible in case of an emergency, but it is still a much higher rate than my local bank's saving's interest rate. I believe it is a paltry .4%.

Perhaps I will sock away the other $1000 and just wait to save for those things I want under my own power. Besides, I didn't expect this money otherwise, so I should treat it as such.

Thank you all for your replies. I love this website and what I think it's going to do to my thinking pattern.

**jpg7n16** · 08-02-2010, 10:38 AM

Originally posted by DrSavin View Post

I don't think that I'll be budgeting for clothes, however. I'm not a big proponent of fashion. I just really need some new clothes because of wear and tear.

That is precisely why you must budget for clothes. Necessary clothing - not clothing blow money. And I'm not sure what that will run you, but clothes wear out. And new shoes, shirts, pants, socks and underwear all cost money, don't they? So won't you need to plan for that upcoming expense?

I'm not sure if $20/month is too much or too little for you. 1 new pair of dress shoes for work per year could easily run $80-100/year; $6.67-8.33/month.... and that's for only 1 pair of shoes.

So think through your needs and budget in advance for the planned replacement of clothing (a need).

Nice, stylish clothing is a want and should only be budgeted if desired after all needs are met.

**DrSavin** · 08-02-2010, 10:50 AM

Good point. Perhaps I should be more detailed when it comes to my budgeting. It's just difficult to think about things divided up as such when all the saved money for various things all goes to the same account.

**Joan.of.the.Arch** · 08-02-2010, 01:43 PM

The internet makes it easier to find better interest rates. A lot of us use bankrate.com, where you can also look up credit union rates. Nonetheless, I usually hear of the best rates on radio or even local TV ads, before I even think to check out bankrate.com.

Here is one currently offering 4.01% on a checking account. https://www.firstcloverleafbank.com/home/home

Your $3000 sitting in a 4.01% account would become $3245 in two years if you don't reduce it by spending from it.

Bankrate.com only gives that bank one star, yet deposits are, of course, insured.

Oh, come to think of it, bankrate might not collate info on interest bearing checking. But a similar checking account is my best option for cash savings these days.

-- Help a student with his money --