What's more daunting than streaking the Lawn, writing a thesis or raising your hand in huge lectures? What have only some of us done, but many of us failed to do? Does "learning how to manage your money" ring a bell?
Learning to manage your money is just about the easiest thing to keep putting off, but it is arguably the most essential investment you will make in your future.
As a fourth-year Commerce student, I'm ashamed to admit that credit management hasn't been my top priority these past four years. My financial situation, like that of many other University undergraduates, has not required me to be a credit management pro. I have one credit card -- in my parents' name. I have one debit card that I use to pay rent and utilities -- and my parents pay for those, too. I work during the summers but never during the school year, and I'm pretty lucky to have my family as a safety net to carry me through my college career.
But what about May? And graduation? And jobs? And apartments? And loans! For the first time, it's dawning on me that my credit history is just as essential to my future success as my resume, and I wish I had realized it sooner.
Let's get down to business. I referred to the process of "learning to manage your money" as an investment. What do you hope to get out of an investment? Cash
-- and hopefully lots of it.
How's this for a proposal: Paying off your credit card bill on time, every month, is one of the most lucrative investments you can ever make. When you carry a balance on your credit card, you are a paying a high price for that privilege.
For example, let's assume that your credit card carries an interest rate of 18 percent. Now, let's say that you paid your bill in full every month and avoided all interest payments. That's a guaranteed 18 percent more cash in your pocket each month, and that figure doesn't account for compounding interest. In an era of 1 percent bank interest rates, that's a Bill Gates kind of return.
If the prospect of extra cash does not motivate you to take control of your finances, perhaps the prospect of improving your reputation will. As college students concerned with our futures, we put a lot of time and energy into perfecting our resumes to land the ideal job or internship. We also spend extraordinary amounts of time doing schoolwork so that our transcripts are similarly impressive.
Shockingly, our credit histories speak volumes about how responsible and conscientious we are -- and yet many of us don't think twice about making sure our credit history is sending the right message.
Credit histories are founded on credit reports. These reports follow us throughout life, and they're pretty comprehensive. If you are not familiar with a credit report, this information should be helpful:
-- What's on it? A complete picture of your credit past: credit cards, loans, late payments and a lot more. Also included are businesses that have checked your credit report like utilities and cell phone companies.
-- How can you keep track of what's on it? Order a copy of your credit report annually. Review the report for errors and cancel any credit cards you do not need. This will improve your credit rating and protect yourself from identity theft.
--Who can review my credit report? A lender prior to granting a loan or a new line of credit; an apartment landlord; and even some potential employers.
Does all this seem a bit scary? Fear not, my fellow Wahoos, I've found help.
Ogilvy Public Relations has a program called "Are You Credit Wise?" It provides information on money management through workshops and handouts to University students.
The facts on credit and money management have been provided as an educational resource -- without marketing messages -- by MasterCard International, and are supported by Creditalk.com.
With the holiday season just weeks away, now is the perfect time to make sure that you are on top of your game. Ask yourself, Are You Credit Wise? If not, follow these tips when planning for shopping or other expenses over holiday break.
Control your debt
-- Don't procrastinate. Make a holiday spending plan and stick to it. Be sure your spending plan includes any costs of traveling home for the holidays.
-- Never spend more than you comfortably can pay back soon. Holiday credit card bills will be due in January when you will likely be spending money on books and supplies for new classes.
-- Pay more than the minimum due on credit card balances. Better yet, pay off your bills entirely.
-- Remember, you may have bills that are due during the holidays or while you are enjoying your break. Be sure to pay those bills on time. Additional fees, interest charges and negative credit reports can result from late or skipped payments.
Know your spending habits
-- Do you usually overspend during the holidays? Consider keeping a daily diary of what you spend, and review it often to see how much you have spent and to identify where you can make cuts.
-- Make a New Year's resolution to create and live by a realistic spending plan throughout the year.
Don't hesitate to seek financial help
-- If you are having trouble paying your bills, get help from a financial counselor.
Arm yourself with information today
Visit Creditalk.com for the following help:
-- A credit calculator that projects savings made by increased credit card payments
-- A budget worksheet to create a personalized plan to control spending
--A glossary of terms to explain credit card features, rates and the significance of a credit report.
I promise that the day we walk down the Lawn, we will wish we had paid a bit more attention to money matters. Do yourself a favor, and get Credit Wise.
(Kimberly Rem is a fourth-year Commerce student and Ogily Public Relations intern).
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