This month

Working and managing your money

• Feature — Avoiding debt and saving for the future
• Did you know? — Working while attending college
• Stay on track — A checklist of "to-dos"
• Take notice — Important dates
• All about AIEmail — Subscribe, suggest, review

Feature

Avoiding debt and saving for the future

As you gain financial independence, keep in mind that you are the only person who can keep an eye on your money. If you don't pay attention to what you spend and save on a regular basis, you are likely to find yourself in difficult situations because you can't meet your basic obligations.

The dangers of debt

As you move on to college or a career, be wary of getting too deep into debt.

Understand that debt, in and of itself, is not a bad thing. In fact, without debt, most people would be unable to purchase homes, vehicles, or other big-ticket items. However, debt can become a problem for you, particularly if you fail to seriously consider the impact it can have on your ability to meet your expense commitments.

In almost all situations, when you take on debt, you make a promise to pay the amount you owe sometime in the future, with interest. Interest is the fee you pay to borrow the money.

There are several factors that are used to calculate how much additional money, over the amount that you borrowed, you will have to pay for borrowing. Your credit rating, the time it takes for you to pay back what you owe, and other factors all play into determining how much additional money you will have to pay.

Unfortunately, too many people fail to recognize the importance of borrowing responsibly. Many individuals find themselves over their heads in debt, and unable to pay their obligations. As time goes on and the borrowing continues, it takes very little to get yourself in severe financial trouble.

To avoid running into problems, learn as much as you can about debt and how it can impact your financial health. One good option is to visit Consumer Credit Counseling Services (www.moneymanagement.org) or the Jump$tart Coalition (www.jumpstart.org) to learn more about debt.

Saving for the future
When considering options for saving for the future, remember that a little can go a long way.

For example, if you were able to save $100 each month and earn 6 percent annually in interest, in 25 years you could have over $100,000.

If you haven't already, open a savings account with your local bank. If you have a checking account and you receive income regularly, consider setting up an "automatic transfer" once a month from your checking to your savings.

You may also want to consider investing your money in low-risk investments, particularly if you're saving for the long term and you know you won't need to access the money for a while. In addition, encourage your parents to explore college savings plans that can help you lock in and "purchase" college at today's prices, before the costs go up. For more information about the different types of college savings plans, visit AIE's College Savings Options page (www.AIE.org/Parents/saving.cfm).

Remember, the more you save now, the more you'll be able to do in the years ahead. Invest in the future — your efforts will benefit you greatly throughout your lifetime.

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Your turn

Working while attending college

Many students have to work in order to pay for tuition, books, car notes, rent, food, and other basics. However, an excessive number of hours spent working instead of studying can endanger a student's chances of receiving a four-year degree. Students who enroll on a full-time basis and devote most of their time to school are more likely to complete a degree in a timely manner than are students who go to school part-time. While two-thirds of freshmen who entered college in 1995 were still enrolled in school in 1998, fewer than half of those who worked full-time were still enrolled.

Students who work modest hours are the most likely to be on their way to earning a four-year degree, while students who work full-time are the least likely: 65 percent of incoming 1995 freshmen who worked 1-14 hours per week were still enrolled in a four-year school in 1998, versus just 15 percent of those who worked 35 hours or more.

Source: State of Student Aid and Higher Education in Texas, 2005

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Stay on track

Checklist for this week

For freshmen and sophomores

• Keep an accurate record of all the hours you spend volunteering in your community.
• Consider starting a journal of your summer experiences.
• If you have a summer job, be sure to save a portion of your earnings.
• Read regularly and maintain your list of unfamiliar words.
• If your reading program is part of a requirement for school, don't wait until the last minute to read your selections.
• Surf the Web for information regarding colleges and careers. Start your search by visiting AIE's High School page.

For juniors

• Make a list of colleges that you have an interest in attending. Visit the Web sites of the colleges that you listed.
• Pick up a college reference book at your area library or bookstore and begin reading about the college admissions process.
• Read about college entrance exams and visit the College Board (www.collegeboard.com) Web site to learn more about the PSAT/NMSQT that you will take in October.
• If you have required reading for school, don't wait until the last minute.
• Record your summer earnings to date, and save a portion of the amount.
• Keep an accurate list of your community service hours.
• Make college campus visits and record your observations about each school.

For seniors

• Check the AP policies of your prospective colleges to determine college course credits for which you may be eligible.
• If you have not already done so, request that your AP scores be sent to the colleges of your choice.
• File your AP score report in a secure place.
• Find any ACT or SAT score reports that you have received in the last month.
• Record your summer earnings to date, and save a portion of the amount.
• Spend time preparing for fall college admissions tests.
• Prepare your resume. Visit AIE to see a sample resume (www.AIE.org/HighSchool/Jobs/Resumes/index.cfm).
• Complete rough drafts of your college application essays.

For parents

• Encourage your teen to have a regular reading program.
• Have your child maintain a list of books read.
• If they had a reading assignment for school, make sure they are doing it.
• Review ACT, SAT, and AP test score results with your child, and assist in the filing of these documents in a secure place.
• Check with your teen to be sure they have saved a portion of their summer earnings.
• Encourage your teen to keep a journal.
• Make college campus visits with your junior or senior.

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Take notice

Important dates

Mark down these dates.

To get more information on the SAT or SAT Subject Tests, access useful tools, or register, visit the College Board's Web Site(www.collegeboard.com) or call (609) 771-7600.

To get more information on the ACT, access useful tools, or register, visit the ACT Web Site (www.act.org) or call (319) 337-1270.

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