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Breaking down budgeting, insurance and banking

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Phones are built to trigger adrenaline rushes: Google Calendar, Gmail, banking apps, social media and games all vie for attention with stylized notification sounds.  Prioritizing these notifications are a part of the daily organizational tasks that give many young adults anxiety as the complex scheme of fiscal responsibility approaches. The world of personal finances and legal responsibilities can be daunting, but they are the foundation to living life independently. Broken down, these tasks can actually be satisfying to complete and form a part of building an optimal lifestyle.

In the digital age, phones can make or break the organizational structure of someone’s life. Certain apps can be excellent at assisting people to budget, manage time and focus: the unmeasured skills needed to navigate adulthood. “All of the hard and soft skills you don’t learn formally,” health education coordinator Robyn Manning-Samuels said.

Some apps highly recommended for organizing life and meeting personal goals are Google Calendar or Wonderlist for managing time, Daylio for regulating and recording emotions, Mint or Qapital for a useful mobile budgeting tool, Groupon for finding good discounts on services and Slack, Join.me and Trello for collaborative project management. 

Manning-Samuels urges students to find tools that work for them.

“Do your research,” Manning-Samuels said. “Find something that works for your brain; what’s popular isn’t always what works for you. There’s a ton of resources available for people to manage their brain.” 

Budgeting

When designing their future, people should have decent idea of where money is coming from and where it goes. By tracking down the pesky dollars that push the boundary of the budget, a consumer has clarity over the best possible strategy for conserving money and growing their savings. 

“It’s a combination of personal values and practicality,” Director of the Center of Career Engagement and Opportunity Dwayne Peterson said. “If you have a budget, you see what you actually need to make at the bare minimum to sustain the lifestyle that you desire.” 

For students looking to calculate their living situation, Peterson recommends the website Paycheck City, which allows users to simulate their personal finances with a calculator to examine their expenses and project savings. Peterson discussed how the cost of living and negotiating a salary affects constructing a budget, as the amount of money earned is just as valuable as tracking the amount saved. 

Peterson offered an example: “Let’s say you get offered a job earning $40,000 a year, there’s going to be a lot removed before you take home your net pay.”

Although income can be difficult to track, constructing a budget is essential to managing finances from a place of control and awareness. Mistaking essential income needed to satisfy obligations—such as tuition, bill and grocery payments—for spare spending money can place students in a difficult position. However, the biggest benefit to budgeting is the potential to allocate a certain amount of earnings to savings. 

There are a multitude of model budgets available to adopt. The 50/30/20 budget allocates 50 percent of earnings towards needs, 30 percent for wants and extra expenses and 20 percent to savings. This setup ensures long term funds grow but also marks for obligations and additional purchases.

Zero sum budgeting assigns each dollar earned to a purpose. The method, personalized with online budgeting tool You Need a Budget (YNAB), divides financials into categories and follows four major rules to reduce extra spending.

Cash Diet, also known as the envelope method, directs a certain amount of money to labeled envelopes to represent the different needs and wants. 

60 percent solution has two pools of money, where 60 percent goes for committed expenses and the remaining 30 percent goes to retirement, short term and long term savings. The final 10 percent is dedicated to frivolous expenses. 

Banking 

Whether online or brick-and-mortar, there are a variety of banking options for students. Every financial decision requires extensive research and individuals should consider factors such as the cost of extraction, encountered fees and available options for investment. 

Online bank Ally is highly recommended for students exploring banking options for the first time. Despite not offering a student specific checking account or cash deposits, all ATM locations are free to use and there are no monthly fees. With an interest rate higher than average amongst most banks, Ally can be helpful to students wanting independence who are not overly reliant on cash. 

Another online bank includes a mobile app for both banking and budgeting: Simple incorporates budgeting techniques in a platform similar to money management apps, but tied to the earnings and spendings recorded by the app. There are no fees for banking activity, but there is no way to deposit cash. 

Health Care

Open enrollment for 2020 health plans lasts from November 1st to December 15th. To determine what health care plan is best suited to someone’s needs, they should examine the health care expenses from the past and oncoming year to gauge what category is most appropriate to their individual situation. The categories are Bronze, Silver, Gold, Platinum: 60, 70, 80, 90 percent of healthcare costs are covered by the plan, respectively. While plans with low coverage will charge lower premiums, a person in need of frequent medical services would benefit from the minimal out of pocket costs from a Platinum plan.

There are five plan types: preferred provider organizations (PPOs), health maintenance organizations (HMOs), Point of service (POSs), exclusive provider organizations (EPOs) and High deductible health plans (HDHPs). 

Preferred provider organizations (PPOs) are heavily used in employer based health care plans. Alongside HMOs, this is the most common individual type of plan, providing flexibility and a larger network of health care providers at the cost of high premiums and a deductible. 

Health maintenance organizations (HMOs) make up 15 percent of health plans. They are a valuable option for those who require minimal medical services and want low premiums. The plan requires a primary doctor to refer the patient to specialists. 

High deductible health plans (HDHPs), which now cover 30 percent of workers, benefit those with low healthcare expenses willing to pay a high deductible. 

A blend of the Point of service plans (POS) and Exclusive provider organization plans (EPO) are less common among individuals but are also available to consumers. Typically, employers offer a choice of a PPO, HMO or HDHP health care plan.

When judging healthcare providers, there are multiple ways to approach selection. Accessing websites that compare or search for plans, contacting a health insurance agent and using a health insurance marketplace specific to each state and investigating health insurance plans online are the easiest tactics. 

Thesis student Jesus Olive recommends the company he works for, First Alternatives, to students in need of low cost coverage. The healthcare provider includes unlimited video and phone consultations, to cover any non urgent condition for the consumer and household members for 35 dollars a month.  For a dorm of four, the cost would be split to $8.75 each. 

Car Insurance

After learning to drive, purchasing a car and getting a license, drivers have one last step to take before they are free to take on the road and all its hazards. Auto insurance is a massive industry and the available options can be overwhelming, but driving without insurance is a major financial and legal risk. Paying the full price of a car accident can devastate someone’s financial stability, and in Florida fines for offenses range from $150 to $500, not including a suspended license for three years. 

There are three primary types of auto insurance: liability coverage, collision coverage and comprehensive coverage. Liability coverage only covers the costs of bodily and property damage that occurs to others in an accident, but collision coverage also covers personal repair and replacement of a car. Comprehensive coverage is for any non collision damage such as natural disasters and theft, which is more important for expensive cars.

To understand the best possible match for auto insurance, thorough research is necessary. Some commonly used auto insurance companies for college students include Metromile, ideal for on-campus students who drive minimally. The base rate is 30 dollars and the rate per mile is 3.2 cents. Allstate offers students discounted auto insurance if going to school 100 miles away from primary residence, which coupled with a Good Student Discount is a fairly affordable option. Having a 3.0 GPA and being under 25 qualifies students for Liberty Mutual’s student discount, and for those under 21 completing a Driver Training Program qualifies a consumer for Driver Training Discount. 

State Farm, Farmers, Esurance, and American Family offer similar discounted prices for academic achievement and safe driving; Farmers has the highest discount, enabling students to save 24 percent each year for prowess in school. 

For students seeking answers regarding financial literacy or personal guidance on budgets, work plans, or success strategies, Anjali Cadena and Kaylie Stokes of the Student Success Center as well as all of the student success coaches are available for an appointment. Located in HCL 5, the Student Success Center will focus on the soft skills involved in meeting personal goals related to achievement in and beyond school. 

Information for this article was gathered from Insurance.com and Efile.com

And a successquest powerpoint created by Kaylie Stokes 

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