I was recently reading the article “13 smart things to do before year-end” by Stacy Johnson on MSN Money[i] and thought she had some great tips. Utilizing some of her tips and adding some of my own I am calling my article “13 Smart Things for Students to do During the Winter Break”.
1. Review your credit report. We’ve talked about this a number of times on the Financial Tip of the Week, but reviewing your credit on a regular basis is an important financial step. Up to 25% of all credit reports contain errors serious enough that you would be denied credit. At www.AnnualCreditReport.com you can get a free copy of your credit report from each of the three major reporting agencies. If you find any errors go to the website of the credit reporting agency and search for their dispute form. They are required to research and correct any errors.
2. Put a credit or security freeze on your credit reports. A credit freeze stops thieves from being able to open new credit in your name. Here is a statement from the Equifax website: “A security freeze is designed to prevent the information in your credit file from being reported to others, such as credit grantors and other companies, except those exempted by law or those for whom you contacted us and requested that we temporarily lift the security freeze or those that access during a period of time when you requested we temporarily lift the security freeze.” What this means is that if a thief does steal your identity they can’t open new credit because your record is frozen. This will also prevent you from opening new credit unless you plan ahead and “unthaw” your credit report for a period of time. Credit freezes and unthaws do cost money, but think of the money spent like an insurance policy. In Missouri it is just $5 for each freeze. Here are the websites to freeze your credit report:
https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
https://annualcreditreport.transunion.com/fa/securityFreeze/landing
http://www.experian.com/consumer/security_freeze.html
3. Clear the clutter. A number of students are required to move out during the Winter break, so this would be a great time to turn some of your clutter into cash, or perhaps a tax deduction. Spend some time each day (after finals, of course) getting rid of stuff you aren’t using anymore. Do this in your college dorm as well as your old bedroom back home. If it’s junk, throw it out. If it's easily sold, sell it online. If you'd rather help someone less fortunate, donate it. You might even find some potential gifts among your stuff!
4. Work on your budget. If you haven’t done so already spend some time on a budget over the holiday break. Write down your income, including money from a job, money you receive from parents or others on a regular basis, student loans, etc. Next, write out your monthly expenses – start with your needs then move on to your wants. Put a dollar amount next to each item. Minus your expenses from your income, and the final number either needs to be a zero or a positive number (meaning you are making more than you spend). You will need to review your budget on a regular basis, but getting a jump on it in December can help make the process smoother in 2012.
5. Digitize documents. If you're buried in paper, maybe it's time to invest in a scanner. You can get a decent one for $50 and start transferring the contents of your filing cabinets and drawers to your computer. Just make sure to keep backups. The June 3, 2010 Financial Tip[ii] discusses how long to keep documents.
6. Make a plan to get out of debt. I talked about this item in great detail in the Financial Tip of the Week on March 4, 2010.[iii] Review that Tip and make a plan, using free PowerPay software, to get out of debt.
7. Make a will. Yes, even students should have a simple will. Most of you won’t need a lawyer to do so. You can find a number of do-it-yourself software packages for less than $50 and you can do it in less than an hour.
8. Make a living will and health care power of attorney. These are things that none of us like to talk about, but you should discuss with your loved ones what your wishes would be in you were seriously injured and were being kept alive by life support systems only. Also, who would make your healthcare decisions if you were hurt and couldn’t make them yourself? If you are a minor then your guardians will make these decisions for you, but you should take some time to draw up a living will and health care power of attorney and discuss your wishes with your loved ones. Just take a day and get your will, living will and health care power of attorney knocked out in one day. Then go out and do something really fun to take your mind off of it!
9. Review your insurance coverage. Are you paying your own insurance? If so, take some time over the break to review it. Are you getting the best deal possible on your car and renters insurance? Have you reviewed your life insurance coverage lately? Call up your agent and schedule an appointment.
10. Review your cell phone plan. A lot of people never check to see if they can get a cheaper cell phone plan, but it may be worth looking into. For example, Wal-mart sells a plan called Straight Talk that is unlimited text, talking and internet for $45 a month. Republic Wireless sells an unlimited plan for $19 a month. If it makes sense to switch you could potentially save a lot of money. Be sure to check your contract, though. Often getting out of your contract early will cost you a lot of money, so you may have to wait to switch until your current contract is up.
11. Check your student loan status. At www.nslds.ed.gov you can review all of your federal financial aid. It’s a good idea to check in regularly to know where you are. Your private loans won’t be on here – but you can find them on your credit report. To access the NSLDS website you need a Federal Pin Number. If you don’t have one yet you can request one at www.pin.ed.gov.
12. Read a book. What – read over the holidays? When it’s not assigned? YES! If you want to be really crazy, read a financial book! I really like The Millionaire Next Door by Dr Stanley and Dr. Danko. I also like Rich Dad, Poor Dad by Robert Kiyosaki. A few classics are George Clason’s The Richest Man in Babylon, James Allen’s As a Man Thinketh and Russell Conwell’s Acres of Diamonds.
13. RELAX and enjoy your family and friends. While I recommend you do a few of these items over the break, it’s even more important to relax and enjoy time with family and friends. Most of us are truly blessed and have many things to be grateful for – topping the list for most people are their family and friends. Be sure to enjoy this time with them.
Ryan H. Law, M.S., AFC
Personal Financial Planning Department
Office for Financial Success Director
University of Missouri Center on Economic Education Director
239E Stanley Hall
University of Missouri
Columbia, MO 65211
573.882.9211 (office)
573.884.8389 (fax)
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