Money Secrets #1

The following interactive program was created for the Modern Languages and Literature Graduate Student Association.

This program was written by Accredited Financial Counselors from the UNL Student Money Management Center.

Free money tools and resources will be available at the end of this quiz.

The main resources used were Cash Course from the National Endowment for Financial Education and Garmen & Forgue's Personal Finance textbook.

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Money Secret 1 of 10


You might be able to get your student loans forgiven.

One notable program is the Public Service Loan Forgiveness program. Under this program, anyone who works in a public service job can qualify. You must make 120 monthly payments (10 years), then your remaining balance is dropped.

The borrower must be employed full-time in a public service job for each of the 120 monthly payments. Public service jobs include, among other positions, emergency management, government, military service, public safety and law enforcement, public health, public education, early childhood education, social work, public services for individuals with disabilities or the elderly, public interest legal services, public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations.

People that qualify for this forgiveness program usually take the Income Based Repayment Plan, where monthly payments are calculated to be 15 percent of discretionary income. Under this plan, borrowers will ensure they have a balance left after 10 years to be forgiven.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 2 of 10


There are many ways to pay down student loans.

  • Standard Repayment Plan - Payments are a fixed amount of at least $50 per month. You have up to 10 years to get the balance paid off. You'll pay less interest for your loan over time under this plan than you would under other plans.

  • Graduated Repayment Plan - Payments are lower at first and then increase, usually every two years. You have up to 10 years to get the full amount paid off. You'll pay more for your loan over time than under the 10-year standard plan.

  • Extended Repayment Plan - Payments may be fixed or graduated. You have up to 25 years to get the balance paid off. Your monthly payments would be lower than the 10-year standard plan. You must have more than $30,000 in outstanding loans. You'll pay more for your loan over time than under the 10-year standard plan.

  • Income Based Repayment Plan - You must have partial financial hardship. Your maximum monthly payments will be 15 percent of discretionary income. Your payments change as your income changes. You have up to 25 years to get the balance paid off. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.

  • Pay as You Earn Repayment Plan - You must have a partial financial hardship. Your maximum monthly payments will be 10 percent of discretionary income. Your payments change as your income changes. Up to 20 years for repayment. You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 3 of 10


It's easy to find your spending leaks. Use a budget.

A budget sounds painful, but can save you lots of money. Just by tracking how you're spending your money, it's possible to identify, and fix, spending leaks. UNL students have saved over $6,000 a year.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 4 of 10


Want to become a better saver? It's easy. Just set financial goals.

Figure out how you want your money to help you get what you want out of life, like a house or a new car. Determine how much you want to save each month for each of your goals. Having these goals in mind will help you prevent impulse spending. You won't want to throw your money away on stuff you don't really need.

Be sure to include building an emergency fund as one of your financial goals. Build up an emergency fund of three to six months of living expenses so that you won't go into debt if you have a surprise in your life.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 5 of 10


It's not difficult to make money grow.

When you invest your money, you earn compound interest not only on what you put in, but also on any interest that accumulates. This is how money grows fast. If you begin saving for retirement at 25, putting away $2,000 a year for just 40 years, you'll have around $560,000. If you wait till you're 35 to start saving, when you're 65 you'll wind up with $245,000, less than half. This is assuming your earnings grow at 8 percent a year.

Anybody can invest. Most people start investing through their employer's 401K account, which is a company-sponsored retirement plan. The nice thing about 401Ks is you put in a certain percentage of your paycheck and your employer also makes contributions to your account, which is free money.

401K accounts are typically composed of mutual funds, which are collections of investments that typically include stocks and bonds. The nice thing about mutual funds is there is a professional managing the fund. They decides when to buy and sell the investments in your fund. Owning a mutual fund is a good way to learn about investing basics.

If your employer doesn't offer a 401K, you can open your own IRA - Individual Retirement Account. These accounts are also typically composed of mutual funds. Look into a Roth IRA, which means that you pay taxes on your IRA contributions BEFORE you put them in your IRA. Then you don't pay taxes when you take the money out during retirement. If you have a traditional IRA, you pay taxes when you take the money out during retirement. For young people, experts recommend a Roth IRA.

How much do experts suggest you contribute to your retirement account? Most recommend at least 10% to 15% of your income.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 6 of 10


It's not hard to save money on mortgages and car loans through building a good credit score.

First off, what is a credit score? This a numerical value that is a measure of how responsibly you've managed money that you've borrowed. A good credit score is in the mid to high 700s. Credit scores are built through using credit cards and having personal loans, car loans, student loans, and mortgages.

Maintaining a high credit score will earn you the respect of bankers and mortgage lenders. They will reward your responsible use of money with lower interest rates and attractive loan terms. When it comes time to buy a car or house, you’ll be glad you paid attention to the small habits that keep credit scores strong—such as paying credit card bills on time.

Tips for Building a Good Credit Score

  • Pay Bills on Time
    Delinquent payments, even if only a few days late, and collections can have a major negative impact on your score - dropping your score as much as 60 points.

  • Only Use 30% or Less of the Credit Available to You
    High outstanding debt can affect a credit score.

  • Don't Open Too Many Accounts
    If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.

  • Leave Accounts Open
    Once you have an account opened, leave it open to maintain a long account history. New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 7 of 10


Your future employer will probably check your credit score, so it's important to ensure your credit report is correct.

Many employers now check credit scores to help determine if you will be a responsible employee. They assume if you can handle your finances, you can handle the responsibilities they would give you.

Your credit report includes all the items that make up your credit score. It's important to make sure your credit report is correct. Mistakes on credit reports are very common.

You can check your credit score for free at annualcreditreport.com. You can get one free credit report from each of the 3 credit reporting bureaus. NOTE: The 3 credit reporting bureau may receive different information, so credit reports may vary slightly.

If you find a mistake, to insure it gets corrected as quickly as possible, contact both the credit bureau and organization that provided the information to the bureau. Both these parties are responsible for correcting inaccurate or incomplete information in your report under the Fair Credit Reporting Act.

Free money tools and resources will be available at the end of this quiz.

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Money Secret 8 of 10


You might be missing out on tax deductions and could increase your refund.

Tax deductions reduce your taxable income. Especially after you graduate, you want to start comparing itemized vs. standardized deductions. Itemized deductions are those that you add up yourself. The standardized deduction is a lump sum that the government allows you to take. Use whichever deduction is greater. Itemizing your deductions can take time. However, if you'll save more from itemizing, it can be worth it. Do your research to make sure you take every deduction allowed.

Some common tax deductions include:

  • Tuition and fees
  • Student loan interest
  • Mortgage interest
  • Charitable donations
  • Medical expenses (if they are more than 7.5 percent of your adjusted gross income)

While tax deductions work by lowering taxable income, tax credits are a direct reduction of the tax due. After you figure out your taxable income and subtract your deductions, you calculate your tax due. You still have a chance to reduce that amount, often significantly, by taking advantage of any allowable tax credits. Make sure you know exactly what tax credits you qualify for before you get your taxes done. Some of the more utilized credits include the Earned Income Credit and American Opportunity Credit.

Another thing you can do to be tax savvy is to ensure the right amount of withholding on your W-4 forms. Having taxes withheld from your paycheck enables you to pay taxes a little at a time. That way, you’re not hit with a big tax bill in April. Make sure, however, that you're not having too much taken out. If you receive a large refund at tax time, this means you've basically loaned the government that money, interest free.

Free money tools and resources will be available at the end of this quiz.

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Piggy

Money Secret 9 of 10


There are ways to save money on health insurance.

The amount you pay each year for health care coverage is called your health insurance premium. Premiums are affected not just by your age, but also by the components of your policy. If you need to keep premiums low, consider the following:

  • Higher deductibles - A deductible is the amount that you must pay out of your pocket each year before your policy kicks in. Deductibles typically range from $500 to $5,000 per year. Higher deductibles usually mean lower premiums.

  • Higher co-payments - A co-payment is an amount that you pay toward medical care. Co-payments are made in addition to the deductible on your policy. With higher co-payments, you may pay more at the time of a doctor's visit or hospital stay. However, your premiums overall will be lower.

  • Higher total out-of-pocket maximums - Your out-of-pocket maximum is the total amount that you must pay toward your health care under your plan. Most plans cap off your out-of-pocket costs at a certain amount. In general, the more you pay yourself toward medical costs, the lower your annual premium.

Free money tools and resources will be available at the end of this quiz.

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Piggy

Money Secret 10 of 10


It's not difficult to become a master couponer.

Four Steps to Making Couponing Work

  • Stock Up - Know what items you use often and can stock up on. The basic rule of couponing is to buy in bulk when you can get the most savings.

  • Stack Your Coupons - Stacking simply means use one manufacturer coupon (from the company that makes the item) paired with a store promotion/sale. Target, Walgreens, and CVS allow you to stack coupons. One of the biggest mistakes you can make is using a coupon just because you have it. The key is to wait until that item goes on sale. When you’re sure the promotion is too good to pass up, then add a coupon on top of it, and you’ve just scored an amazing deal!

  • Easily Find Coupons and Promotions - Sign up for store rewards programs to get store promotions. Follow couponing blogs to get manufacturer coupons.

  • Take Advantage of Double Coupon Days - This is when a store will accept your coupon at twice the face value. So, for example, if a coupon is $0.50 off one item, the store will honor that coupon at $1.00 off. In Lincoln, only two stores do this - Save-Mart (11th & Cornhusker Hwy) doubles manufacturers coupons up to $.50 and IGA in Air Park on Saturdays.

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