Back to School: 6 Tips to Prevent Overspending

Back to School FlatBrokeCoed

These tips and tricks are the easiest and sometimes most effectual steps you can take to save you money, because overspending can hurt you many times more than simply not shopping sales.

1)   Clear out old school supplies and clothing and inventory your stuff.

Get rid of every broken crayon, pencil without an eraser, dried out marker, shirt with an irreparable hole in it, and sweater you’ll never wear again. Once you’ve purged your clutter, you can better gauge what you have versus what you need. Gone are the days of buying duplicate cardigans and mechanical pencil packs! You’ll know everything you have before you go shopping.

2)   Comparison shop from home.

Before you even walk through the door, you should know what you need from the store and about how much it should cost you. During the back to school season, retailers will make their brick-and-mortar store pricing available through their weekly ads in your local Sunday paper, or even right on their website. Compare competing ads before you go to make sure you’re getting a great price.

3)   Make a list and stick to it.

I’m sure you’ve heard this tidbit before, but it’s tried and true. Once you’ve cleared out your clutter, make a list of things you NEED (not simply what you want) and review it. Cut out anything you could do without. For instance, you have a nice pair of black leggings in your closet, but do you really need a grey pair? You’re probably fine.

Bring that list with you to the store and stick to it! This is the hardest part, as it requires some serious impulse control and discipline.

4)   Set a budget.

I know this sounds thoroughly tiresome at first glance, but would you rather know how much money you can spend without missing rent or would you rather have to sell your hair to make ends meet? Set a budget and tailor your list to it.

5)   Use a cash-only approach.

If you bring your shopping budget in cash, you can see exactly how much is leaving your hands and you’ll know precisely where you stand with your budget. And studies show that people who bring cash while shopping tend to spend less. Bonus!

6)   Don’t get suckered into end cap advertising or BOGO/ “twofer” deals.

Okay, this is a pretty big one, as these two combined can make your total at the cash register skyrocket.

An “end cap” is the end of an aisle in a store which has its own display. Consumers have a misconception that whatever items are on the end caps are on sale or are a good value. Oftentimes stores will put featured items that are not on sale (they may even jack the price up!) in this prime real estate simply because it’s so eye-catching (and of course, to capitalize on the aforementioned popular consumer misconception).

Also, don’t be afraid to NOT go for a BOGO deal if you only really need one item. I’ve worked in a retail store where t-shirts were $19.50 a piece or 2/$32. While the unit price does drop when you buy two, you just went from a $19.50 purchase to a $32.00 purchase because of the perceived savings. You’re not saving when your shopping total goes up.

Wrap-Up and Helpful Links

There’s already enough going on with your BTS preparations, why add debt-related stress? Be realistic with your money and your needs versus your wants. If you know there is going to be a big expenditure time (in this case, BTS shopping) start setting aside a few dollars a week so you’re not totally unprepared when August comes around.

Find out some more great overspending prevention tips here and here.

Do you have some great BTS budgeting or spending ideas? Lay ’em on me down in the comments!

‘Til next time, stay saving, my friends.

Signed,

FlatBrokeCoed

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Back to School with FlatBrokeCoed

Do you hear what I hear? It’s the sound of millions of students and their families readying themselves for the back to school/ back to college season, and it sounds like wallets emptying.

Although August can be a great time to stock up on office supplies, school supplies, dorm furniture, and your back to school/ Fall season wardrobe, there are still a lot of tricks retailers use to try to get you to spend more than you have to on items you weren’t planning for.

That’s where I come in! You’re welcome in advance.

Throughout August, I’ll be doing a Back to School series about how to save money on all of the expenditures you and your family are sure to have, as well as share some tips and tricks on how to get the most out of shopping at some popular retailers.

To start off your BTS inspiration, follow me on Pinterest at @flatbrokecoed! I’ve already added and am continuing to add loads of money saving ideas and inspiration! I’m currently loving my new FlatBrokeDorm board, where I post low-cost and DIY dorm decorating and organization ideas.

Happy Pinning!

‘Til next time, keep saving and pinning, my friends.

Signed,

FlatBrokeCoed

Money Smarts 101- What is a FICO score?

Ladies and ‘gents, I would like to introduce you to my Money Smarts 101 series. This series will talk about all the basics of personal finance that you wish you were taught in school, but never were.

Today I’m touching on your FICO score. Have you heard of it before? It’s the official term and synonym for your credit score. “FICO” comes from Fair, Isaac and Company, which is the firm that creates the most widely used credit scoring formulas and algorithms.

 What is a FICO score, exactly?

     Your FICO score is a numeric representation (or summary) of your entire credit history. It reflects everything from how much available credit you have versus how much of that credit you use to your payment reliability and more. This score is compiled by “The Big Three”, AKA Equifax, Trans Union, and Experian. The Big Three are the 3 largest credit bureaus in the United States that take a close look at your credit and money behaviors.

Don’t get freaked. It’s legal, necessary, and can help you.

They look at your history and reliability and traits. The more traits and behaviors you have lined up with well-known links to good credit traits and behaviors, the higher your credit score.

General credit score range/levels

General credit score range/levels

Your score is on a range from 350 points to 850 points. The higher your score, the lower the risk you pose to creditors and the more likely you are to receive loans and credit cards, and better interest rates on those loans, cards, etc. Generally speaking, creditors look for a score of 725 (the median credit score) or better to award good rates. Credit scores ranking 625 or lower will earn you higher interest rates from creditors.

What influences my FICO score?

There are 5 major parameters the Big Three look at when determining your credit score. I’ll list them from least influential on your credit score to most influential:

Types of Credit (10% of your score)–  This score looks at the types of credit and how many you have. It will look at mortgages, auto loans, credit cards, store cards, etc.

Amount of New Credit (10%)– Opening a ton of credit sources in a short period of time looks sketchy to lenders. Every time you apply for a credit source, that source looks at your credit score. Multiple look-ups makes creditors think that you are high-risk because either you spend a lot (maybe more than you should) or there’s a cash flow problem (you’re spending money you don’t have through credit). Multiple look-ups could also be a red flag that you’re being denied by some lenders and are looking to others.

Length of Your Credit History (15%)– This looks at how long you’ve had credit in general, how long specific accounts have been open, and the length of time since using a credit account.

Any Outstanding/Owed Balances (30%)– This looks at a VERY important ratio in the credit world: Available Credit v. Used Credit. If you’re ratio is high (you’re using a lot of available credit) it’s considered risky. It makes it look like you’re having cash flow problems or are over-extending yourself financially. People with higher ratios tend to make payments late or not meet the minimum balance due, if they make payments at all.

Payment History (35%)– Obviously this is a big one, as late payments have the greatest capacity to ding your FICO score, given their weight. Creditors look at  how recently and how frequently you’ve made any late payments. A 60 day late payment has a bigger chance to ding you than a 15 day late payment. But how recently the late payment happened matters. A 15 day late payment last month has more of a negative impact than a 60 day late payment 2 years ago.

And I’ve even made a nifty pie chart! I’m so resourceful:

FICO Chart

FICO Chart

Wrap-Up

This is a lot of information to chew. I get that. But it’s crucial to know as a college student as this is the time many get their feet wet with credit. Credit can be a very useful tool, as it helps determining your buying power, but you MUST be careful.

I’ll get more into how to use your FICO score and how to increase your responsibility and reliability in the eyes of creditors in future installments.

Links:

If you’re curious for more info now, visit these sites:

http://www.ehow.com/about_4568090_fico-scores.html

http://www.transunion.com/personal-credit/credit-issues-bad-credit/what-affects-your-credit-score.page

http://www.experian.com/credit-education/understanding-credit-scores.html

COMMENTS AND QUESTIONS:

Have any comments on questions about Money Smarts 101 or your FICO score? Do you already have a credit card or other credit? Has it gotten you in trouble or are you a champ at handling it?

Leave a comment below!

Follow me on twitter @flatbrokecoed for exclusive content, freebie alerts, and post previews!

Email me at flatbrokecoed@gmail.com!

Signed, FlatBrokeCoed

Shameless Moneysaver: Video Games

I know it sounds a little off, but it’s basic math. Video games are actually a great way for college kids to entertain themselves while getting a great bang for their buck.

I’m all for ingenious ways to save, but this sounded odd when I first read it in Grigory Lukin’s e-book Go to College Without Going Broke: 33 Ways to Save Your Time, Money, and Sanity. After giving that tip a chance and reading it, it certainly began to make sense. Here’s the long and short of it:

Most of us already have a video game console. If you don’t have one already, one of the major 3 (Wii U, PS3, or Xbox 360) will generally cost you about $150. That’s a big price tag, but it’s a one-time expense.

From there, brand new video games generally go for $60 but used copies can be found for MUCH, much less than that. If you buy a new video game at $60, you can expect to around 60 hours of initial play time. That means an initial cost of $1/hour of play. Then you get into DLC (downloadable content), side quests, free online play, playing in group/party setting etc and the cost per hour of play plummets down to just cents!

As far as entertainment goes, this is pretty darn cheap. Lukin points out that it is far more affordable than, say, going to the movies. There, you pay $10 for a two hour movie, so that’s a $5/hour base price. Then there are concessions. We all know how much those drive up the price of a night out at the movies.

MY TAKE:

This makes me feel a little better about my Wii U purchase for sure. And Grigory Lukin certainly has a point about replay value, and how it stretches your dollar.

From my point of view, though, consoles are even more cost efficient that Lukin is giving them credit for. Most consoles now, including my Wii U or my boyfriend’s Xbox, include video streaming apps like Netflix, Amazon Prime, Hulu Plus, HBOGO, etc. If you already subscribe to any of these video services (which I will discuss in a future post), you can now watch them on the t.v. your console is hooked up to.

That effectively makes consoles like a Roku system. Once you’re done playing games on them, you can just hop onto a service like Netflix and watch, say, Doctor Who.

There’s one way to severely cut down on the purchase cost of a video game: TRADE INS! If you’re not taking advantage of trade in programs, you’re WASTING your hard-earned cash!

It’s simple enough. Go to a retailer that has a trade in program, such as GameStop or Target. I choose GameStop mostly. Take your used games in and they’ll assess their condition and relevance and give you a price. You can either use it right then toward your next purchase or they’ll put it on a gift card for you to use later.

My GameStop Trade-In Haul 06/29/2013

    I was in the mood for a new Wii U game, but not in the mood to pay $60 for it. I’ve had my eye on Game + Wario (a great multiplayer mini-game title) which JUST came out so there are no used copies. The ticket price was $39.99. I brought it 2 old Nintendo DS games to trade in and got $40 for the two of them, making my NEW game FREE! I just had to pay $2.39 for tax. BOOM.

If you’re strategic about your spending and take advantage of trade-in programs and used game prices, you can keep your entertainment costs very low.

I know college students in the throes of exams and essays don’t have a lot of time to burn, but that doesn’t mean you have to spend a bunch of money when you do.

‘Til next time, stay saving, my friends.

Signed, FlatBrokeCoed