Money Management Tips for College Students from the Massachusetts Bankers Association

College students have a lot to think about as they start a new academic year, no
matter what year they are entering. In the midst of all the frenetic activity it’s easy to
overlook their financial lives. The Massachusetts Bankers Association has a few tips to
help college students — and young adults anywhere — get off to a sound financial start.

Overall Money Management

Protect Your Personal Information
Dorms or off-campus housing can be a wonderful, shared experience. However,
be concerned about “friends” of your roommates tramping through the place. Use
a locked drawer or file holder to hold your personal documents — bank and credit
card account numbers, passport, social security number, etc. (Better yet, leave
your social security card at home and, certainly, don’t keep it in your wallet.)
Remember to log-off email and avoid doing online banking on public computers.
This information can be used to steal your identity, open bogus accounts in your
name and run up huge credit card bills. Protect your private information. Create
sophisticated passwords using upper and lower case letters, numbers and symbols
that are not your birthday, home address or some other easily determinable
information. Use separate passwords for banking and non-bank accounts.

Budgeting
For students, establishing and managing a budget is always a good idea. A great
way to start is to arrive at campus knowing all of your sources of income and the
totals: money from a summer job, savings, financial aid, scholarship money,
private loans, a campus job and, of course, parental funds. Then track and record
all of your spending very closely over the course of a month. Project outward to
the end of the semester and see how expenses compare to your available funds.
After reviewing your expenses, chances are you will be surprised that the little
things add up to so much. Think twice about stopping at the coffee shop or
ordering that late night pizza when you can eat on your meal plan instead. If you
are careful, there may be more money left over for important things like books
and academic apps. Don’t forget to budget carefully and realistically for
entertainment. You may learn that not ordering a movie on demand, music or
videos on iTunes, video games, escalating in-app purchases, or going on an
expensive weekend trip, will help you make it through the semester.

Credit Cards, Debit Cards and Other Bills
As a student just starting out on your financial life, it’s important to learn about
credit. Using a credit card or a debit card (included with your ATM card) can be a
good way to establish a positive credit history that will be a benefit throughout
life. In addition, you’ll find that a credit card can be very valuable in case of
emergency. Under federal law if you are under 21 years of age and want a credit
card you must demonstrate income, savings or have a co-signer to obtain a card.
Parents, teach your children about revolving credit and interest rates. They can be
onerous if the student just charges away and overspends. A poor credit score
could hamper your ability to buy a car, rent an apartment, own a home -- or even
get a job. If you receive a card, it’s very important that you check your statements
carefully and report any discrepancies within 60 days to your card company for
maximum protection against fraudulent activities. Pay all of your bills on time,
and remember that data and cell phone bills, and others like cable on demand and
streaming, can run up very fast. Save all statements and receipts and review the
statements thoroughly each month to ensure all charges are yours. Remember that
you probably did not budget for paying credit card debt each month.

Obtain a Free Credit Report
To protect your credit score (yes, you probably have one even if you are a
freshman) it’s a good idea to review your credit report once a year and look for
inaccuracies. You can get it free once a year by going online at
www.annualcreditreport.com

Important Banking Tools

The Checking Account
Open a checking account at a bank near home and use online banking and ATMs or
open an account at a bank near campus. Many colleges invite local banks to visit the
college, or provide brochures at the beginning of the school year. Knowing how to
write checks, balance a checkbook, and recognize the importance of recording ATM
withdrawals and debit card transactions can go a long way toward avoiding financial
trouble. Many parents open a joint account with their college student giving them the
flexibility to make funds transfers when necessary. As joint owners of the account
this arrangement also allows the parents to view all transactions online and foster
conversation to adjust saving and spending accordingly.

Online Banking
Online banking is not only convenient but it is a great way to easily monitor your
accounts and pay bills. Many customers now arrange to receive certain bills online.
Be sure to protect your financial passwords: make them different from your other
passwords and verify that all of the latest encryption and firewalls are in place on
your computer. Check your account every few days, verify transactions, and be sure
you haven’t overdrawn your account.

Mobile Banking
Plain and simple: do not use public wifi for your mobile banking, do not use
anyone else’s device, and always log out when you are through. Mobile banking is
an excellent way to check balances, deposit checks, pay bills and monitor
transaction history. Use it wisely and you will benefit from the convenience and the
safety precautions.

Funds Transfer
Inevitably, at some time during the school year you may need to transfer funds to
your account from your parents (hopefully not because you did not budget well).
Ask your bank about this process. Moving funds can be as easy as a phone call, a
visit to the ATM, or going online.

The ATM/Debit Card
Nothing beats an ATM card for convenience. However, there can be a cost
associated with the delivery of that convenience. Every student should be fully
aware of his or her bank’s fee policies. If you’re a customer, most banks will not
charge you for using their own ATMs, but you should know whether or not you
will be charged for using another bank’s ATM, and by your own bank for
managing that transaction. Be aware, if you are being charged, and you’re in the
habit of visiting the ATM many times a week, the charges can add up quickly.
Remember the option of using the cash-back feature of debit cards when making
purchases to possibly avoid some fees associated with using another
organization’s ATM. Also, if your bank is a member of the SUM ATM Program,
you can avoid ATM surcharges by using another bank’s ATM — if it is a SUM
member. Debit cards are a very useful and popular way to purchase many goods
and services as they take the funds directly from your checking account.
However, to avoid unexpected overdraft charges, consumers now have the right to
opt-out of any automatic overdraft protection plans on their debit cards. Consider
whether you want to allow your bank to let you overdraw your account to make a
purchase or withdraw funds at an ATM for additional fees that can add up.

ATM Safety
Consumers perform millions of ATM transactions a week. Fortunately, the vast
majority is completed without any incidents but, to improve your safety, take a
few precautions. Be aware of your surroundings, particularly at night. If you
observe suspicious persons or circumstances, do not use the machine. Have your
ATM card ready and in your hand as you approach the ATM. Use your hand and
body to shield the ATM keypad as you enter your PIN. Always take your receipts
or transaction records with you. Do not flash or visually display any money you
received from the ATM. Immediately put your money into your pocket or purse
and count it later. If you are using a drive-up ATM, be sure passenger windows
are rolled up and all doors are locked. If you leave your car and walk to the ATM,
lock your car. Think about bringing along a friend or trusted acquaintance. If you
are in an unfamiliar neighborhood, find an ATM that is located indoors, such as
bank branches that allow entry after regular business hours, or ATMs within
grocery or convenience stores. Never use an ATM if you see what looks like extra
equipment added to it — e.g. a card skimmer or an extra camera behind you. That
could be an attempt to defraud you. Keep your PIN a secret. Never write it down
or share it with anyone – not even family members.

Records
Students should keep a record of all of financial service providers (banks, credit
card companies, etc.) in a handy but secure place, separate from your wallet with
cards in it, or your checkbook, in case they are ever lost or stolen. Call your bank
or credit card company promptly to report lost or stolen cards to protect you from
financial loss, and to order new materials. If you do this electronically, say on an
Excel spreadsheet, be sure the document is in a secure location, not on your
college’s server, and that you have a way of backing it up. Consider spending
money on one of the cloud-based data backup services, not only for your financial
records, but for your increasingly important academic and career documents as
well. It’s affordable on an annual basis, but before purchasing, however, ask your
provider about its security/privacy protection.

Internet Advice

Avoid Phishing Scams
Criminals have gone “phishing,” and college students are prime targets. This is
the act of sending pretext emails to unsuspecting recipients who may think it is an
email from their own bank or credit card company — or university — referencing
problems with an account or some situation requiring a fast response. The emails
are random, but sending thousands increases the likelihood that the scammers will
reach some consumers who, indeed, do business with that particular institution.
The email or its links will use the institution’s logo and other graphics to give the
impression that it is actually the organization sending the email, or “spoofing” it.
The communication will then include a request to “verify” social security, account
numbers, or passwords. Don’t do it. Your bank, credit card company or university
knows this information and does not need to ask you for it. This is a fraudster. A
variation of this practice attaches “spyware” to your computer which can record
keystrokes and other activity. It can start by you opening attachments to odd
emails, even those that look like they may have come from your friends. Or
someone can call you on the phone and ask these questions. Hang up, unless you
initiated the call.

Avoid Suspicious Responses to Your Ad on the Internet
This scheme often involves a legitimate ad that you place on the Internet in
various websites or in social media, perhaps trying to sell a car, electronics or any
pricey item. Someone responds and cites complications with currency exchange
or shipping costs, and sends you a check for more than the selling price of your
stereo or car or whatever you are selling. After depositing the cashier’s check, you
are then instructed to keep a portion of the extra money and wire or send a check
for what’s left of the overpayment to the buyer’s agent/shipper. After you wire the
money out of your account you may find that the check you received and
deposited was counterfeit. An important rule: If you’re selling something, funds
should be moving only in one direction – to you. And make sure, after depositing
a check and before you release the goods, that your bank has the funds. Don’t
simply ask if the check has cleared (there’s no such thing), verify that the funds
are in your account by asking “Have the funds been ‘finally collected?’” A better
rule of thumb: If a deal sounds too good to be true, it probably is. Another
warning: A similar fraud using a counterfeit cashier’s check can also occur after
an online auction.

Avoid Email Scams
We’ve all received emails asking for cooperation in moving a large sum of money
out of another country — and likely discarded the letters as scams. But other
fraudulent letter writers have become more sophisticated, without errors, and with
documents bearing seemingly official seals and signatures. You might see a full
title, department and address along with other information that a scammer would
normally not be able to provide. The scammers pose as bankers, chief auditors,
chief security officers, remittance officials, and directors of finance, directors of
government or bank contract award divisions — all stating they have access to
unclaimed funds, generally inactive or delinquent accounts, with millions waiting
to be claimed. Others say they are kin to family members who died natural but
unexpected deaths, or their relatives were killed in assassinations, military coups,
or plane crashes, also leaving a tidy sum for the taking. Of course, you’re
thinking, No one would fall for that — sending money to cover transport fees or
personal information to claim a “fortune” — until someone does. You are still
likely to see grammatically incorrect letters with misspellings and wild schemes;
those are easy to spot as fakes. Then there are the good letter-writers — and
they’re all fraudsters. Don’t give them anything. If it seems harmless at first
such as asking for your fax or cell number, later, someone will ask for your social
security or bank account number and money will be wired out of your account
rather than the massive influx you were expecting.

Be Wary of Prizes, Trips, Lottery Winnings
This bogus communication can come to you via email, the U.S. Postal Service or
over the telephone. There are numerous variations but, again, what they have in
common is a request for you to advance funds to receive your prize. The
scammers claim you have won the Canadian or some other lottery, you have won
a trip or some other windfall and all you have to do is advance a “handling” fee to
the sponsor or provide your bank account number. Don’t do it.

Avoid Computer Viruses
Of all Internet frauds, this one is perhaps the most insidious. You receive an email
with a tender header, perhaps with an attachment titled “I love you,” or “call me,”
or just about anything that piques your curiosity. When you open the email, it
attaches a virus inside your computer that records keystrokes, log-in names and
passwords. And it does so without your knowing it. After you have visited 20 or
30 online banking or financial Web sites, it emails that information back to the
criminal sponsor. Best advice: Don’t open strange emails, especially those with an
.exe file. Check with your college and ask how to protect your computer from
viruses.

Be Careful with Credit and Job Applications
If you see a credit offer or a job posting online, you can complete an application
or send in a resume. However, don’t respond if it asks you for your social security
number or bank account information. These can be provided later after you have
established contact by phone, or mail, or in-person with the companies and have
verified that they are legitimate. Otherwise, you could be providing personal
information that could result in the draining of your bank account or the stealing
of your identity.

Resist the Temptation to Illegally Download Music & Videos
Yes, it’s tempting and so easy, but students (and their parents) have been sued all
over the country by recording companies and artists for sharing music and pirate
movies. Some colleges now have programs to avoid this problem. If yours does
not, be smart and pay the fee it costs to legally download music. At $1.29 per
song, iTunes are cheap compared to a lawsuit.
Always remember, spending just a little time thinking about finances each month
will make your college days — or experience in the working world — just a little less
stressful at a time that we all know can be stressful enough.

The Massachusetts Bankers Association represents approximately 155
commercial, savings and co-operative banks and savings and loan associations with
69,000 employees located in Massachusetts and elsewhere in New England.

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