How do I lower my weekly food costs?

If you’re struggling to keep your personal food costs down, there are several ways to cut your spending while still getting the most bang for your buck.  A good way to start reducing your own personal food costs is to first track your spending on food for a period of time—week, month, etc.—and see the amount of food you spend.  Ask yourself a few questions such as how much you spend on at-home cooking and eating out?  What do you spend more on?  Do you find yourself in need of eating out more or eating at home?  Once you figure out your personal expenses and answer these questions, you can start to sort out way to minimize them.

There are quite a few ways you can cut your costs on food such as:

  • Going out to eat less. According to The Huffington Post, the third largest way students waste their money is by eating out too much. If you cut back on your expenditures while you eat out or become more aware of the prices of food you are eating that is a large point of spending for many people.
  • Cooking with a friend. If you are eating meals with more than one person it is typically more economical to cook food, reducing the cost per head for food.  If you live with roommates, shop together and buy certain items together that you know you would not finish on your own which can also reduce food waste.
  • Utilizing sales and coupons. Saving a few cents on several items can quickly add up and give you more money to spend elsewhere.
  • Buying staple items in bulk. Many non-perishables can be bought in bulk at cheaper prices thus reducing your average costs on them and resulting in you visiting the store less often.
  • Shopping at cheaper retailers. This can give you the opportunity to buy most traditional items for a cheaper price.
  • Freezing fresh produce. This can extend how long fresh produce lasts and can reduce food waste in general.

If you take small steps in your day-to-day life it is very possible to reduce your food costs resulting in an overall reduction in your expenses.  Good luck!

Written by Libby Cocagne, Financial Wellness for College Students Peer Educator, University of Illinois Extension.

Reviewed by Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension.

How can I successfully achieve my goals?

Creating a savings goal is commonly confused with creating a dream. For example, when people are asked to create a savings goal for a vacation trip or a car, their response is “I want to go to [location]” and “I want to have a [car model]”. This only represents what the individuals want (a dream) without creating a reasonable process (savings goal) to achieve this end product.

That being said, we peer educators at the Financial Wellness for College Students program advocate S.M.A.R.T. Goals. When creating a savings goal, it is important that you incorporate all five of these components: Specific, Measurable, Agreed Upon, Realistic, and Timely.

Specific: Make your goal well defined so that it can be clear to anyone who has a basic knowledge of your project.

Measurable: Create an easy way to keep track of your goals that allow it to be motivational to achieve.

Agreed Upon: In cases when your goal involves others, collaborate and make sure that everyone acknowledges the goal.

Realistic: This allows your goal to be results-oriented and a reasonable-seeming accomplishment.

Timely: Create a timeline when this goal will be achieved. Being able to track your progress encourages you to continue and see that the effort is effective.

Download a handy form to write your own S.M.A.R.T. goals.

Written by: Rex Wang, Financial Wellness Peer Educator, University of Illinois Extension, 2017.

Reviewed by: Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension, 2017.

What is a discount broker?

A discount broker is somebody (typically a stock broker or brokerage firm) that charges a small fee on orders they carry out for you. An order is the process of submitting a request to buy or sell a stock. Below are the main pros and cons of a discount broker.

Pros

  • Small fee (typically less than $10 per transaction)
  • Simple

Cons

  • No additional services

As you can see, the disadvantage to a discount broker is that the only thing they do is carry out the order for you. On top of carrying out the order, a full-service broker offers investment advice, retirement planning, tax tips and more for their clients. But remember, those extra services come at a price. Depending on your needs, it may be in your best interest to consider a discount broker. They are simple and relatively inexpensive. Just be sure to research your investment choice!

 

Written by: JT Donahue, Financial Wellness Peer Educator, University of Illinois Extension, 2017

Reviewed by: Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension, 2017

Early In My Career: Is it necessary to understand the difference between a Traditional and a Roth IRA?

During our college years the thought of retirement is way down the road, so far down the road, a lot of college students and recent graduates don’t even bother thinking about it. There is a false notion that people do not need to start thinking about retirement until we are well into our careers. However, becoming aware of what retirement plans can offer and contributing to them early can make your retirement that much more enjoyable.

Many people are confused about the difference between a Traditional and a Roth IRA, or if a difference even exists between the two. An IRA is an abbreviation for Individual Retirement Account; it is available for any working Americans. The two most common IRA’s are the Traditional and the Roth IRA.

In a Traditional IRA, the account owner puts pre-tax dollars into their account. Once the owner withdraws their money from the account they then pay ordinary income tax on the withdrawals.

In a Roth IRA the individual pays tax on income, then puts after-tax dollars into their Roth account. If the money has been in the account for at least five years and the owner is 59 ½ years old the principle and earnings are both tax-free when they decide to withdraw from the account. Roth IRA’s are typically a good idea for young people because they have many years for earnings to grow tax-free. Roth IRA’s also appeal to those who believe their tax bracket is likely to be higher in the future.

For more details about the differences between the two, read Traditional and Roth IRA’s, https://www.irs.gov/retirement-plans/traditional-and-roth-iras

 

Written by: Brandon Wyeth, Financial Wellness Peer Educator, University of Illinois Extension, 2017

Reviewed by: Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension, 2017

How can I prepare financially for transitions while in school?

What’s up next for you?  A big move? An internship? Graduation? Marriage?

Unexpected costs can often be overwhelming and sometimes difficult to manage.  The busier we get, the easier it is to miss something or develop a bad habit.  It could be a bad eating habit or it could be a bad spending habit.  Both increase stress, which is the last thing you’ll want during that time.  So, take some time now to prepare so you don’t experience even more stress during what should be an exciting time!

Create or maintain savings.  Savings is often that last thing we add to our budget, if at all, but even setting aside $5 a week yields $260 after 1 year!  It can be hard to predict how much money we need during times of transition, which is why creating a habit of saving can reduce the burden if not eliminate it.  However, to prepare for a transition you can consider all the costs you know you’ll experience and use that amount, or a little more, to help set a goal.  Divide your total goal by the amount of time you have until your transition. For example, if you need $1,000 by September 2017 you’ll need to save $91 a month, or $3 a day.

You can use a savings account to separate that money and you’ll earn some interest!  Take a look at our blog post Why get a savings account? for more information about why savings accounts can be beneficial for you.

It’s easy to make split second decisions that can derail your savings goals.  If you don’t have a budget, this is a great time to make one.  If you feel comfortable and confident to make it on your own—great!  Stop by the Student Money Management Center’s website for tips and tricks to create a solid budget.

Written by Carol Brobeck, University of Illinois USFSCO Student Money Management Center.