Money Management


A Strategy for Financial Success:
10 Good Habits to Achieving Your Dreams

How can you achieve your dreams when faced with the reality of high educational debt? The following ten habits can help you realize your financial goals and fulfill your educational and professional dreams. Getting into these habits can be a strategy for financial success.

For most people, bad habits are hard to break, and it's difficult to get into good habits, particularly when it comes to money. This "Top 10" list includes some good financial habits that should help you succeed at achieving your goals and help you to be responsible in the financing of your education. It's not too early to get into these habits if you haven't already done so. The longer you wait, the more difficult it will be.

  • Live below your means while in school. Don't live a lifestyle you can't afford.
  • Budget your money just as carefully as your time; get on a monthly budget and stick to it.
  • Save a little each month (even if only $5), and plan for your financial future.
  • Keep accurate, well-organized records of your financial activities.
  • Establish and maintain a strong credit history; review your credit report annually.
  • Borrow the minimum amount you need.
  • Be a well-informed borrower. Not all loans are alike; know the differences and borrow wisely.
  • Pay your credit card bill(s) in full each month. Limit your use of credit cards - save them for emergencies.
  • Limit the number of credit cards you have to just a few; limit your total available credit.
  • Be realistic about how much money you will earn once you graduate - don't count on any immediate financial windfalls.

Taking a Job

There is an increasing number of students who work part-time during medical school. Before deciding whether to rely on employment earnings to partially meet your educational expenses, check to determine whether there is sufficient time available for work in addition to the time necessary to study. Many part-time positions, with flexible hours, pass directly from medical student to medical student. Others are listed on bulletin boards in the CHIP Lounge and the Women in Medicine office or are secured directly from departments and personnel services at the Medical School and main University campus.


Housing

Where to live, how much to pay, and how to find a roommate are a few commonly asked questions when the subject of housing arises. According to University Housing Services, you need to begin looking for housing three to six weeks before you need to move. When looking for housing, you need to think of other associated costs such as internet, fixed utility costs and, usually, an advance payment for a security deposit.

Due to a high demand for rental units close to campus, the amount of low-cost, inexpensive housing is limited. Generally, sharing an apartment is the least expensive type of housing.

What is affordable housing?

According to University Housing Services, the following are ranges of rental rates for campus-area apartments. Rates are given per month and based upon 2005-06 averages:

Efficiency/Studio  $450-$900

1 Bedroom  $525-$1,150

2 Bedrooms  $700-$1,700

4 Bedrooms  $1,236-$2,780

Where can I find affordable housing?

Housing Bulletin Board

There is a Housing Bulletin Board located outside the Financial Aid Office (B-606 Mayo Bldg.) with listings of apartments/rooms for rent and postings of individuals who may be seeking a roommate.

Medical Fraternity Houses

There are three medical fraternity houses for first- and second-year students:

Nu Sigma Nu
631 Oak St. SE
Cost: $350 - single size / $395 - double size
www.student.med.umn.edu/nusig/

Phi Chi
325 Harvard St. SE
Cost: Approx. $450 monthly; food co-op included
Cost: Approx. $360 monthly without food co-op
www.student.med.umn.edu/phichi/

Phi Rho Sigma
632 Erie St. SE
Cost: $390 monthly - private apartments with access to main house
www.student.med.umn.edu/phirho/

Rental Housing

Housing Services has listings of rental housing located within walking distance of campus as well as outside the campus area. Information regarding residence halls is also available. Some of the halls have spaces available for graduate students who prefer to live near other graduate/professional school students. Housing Services is open 8:00 am - 4:30 pm M-F.

Housing and Residential Life
Comstock Hall East
210 Delaware St. SE
Minneapolis, MN 55455 / (612) 624-2994
www.housing.umn.edu

Housing for Students with Families/Partners

The University also provides housing for married students with or without children, single parents, and domestic partners. There is usually a long waiting list, but the length fluctuates during the year. For more information contact:

Commonwealth Terrace Cooperative
1250 Fifield Avenue
Falcon Heights, MN 55108 / (651) 646-7526
www.umnctc.org

Como Student Community Cooperative
1024 27th Avenue SE
Minneapolis, MN 55414 / (612) 378-2434
www.cscc.umn.edu

Before You Sign the Lease:

According to University Housing Services, you should consider the following points before you sign a lease:

  • Rent: How much? When due? Starting date? Termination date?
  • Security deposit: How much? How and when is it refunded?
  • Damages: Who pays for breakage or other damages over and above normal wear and tear? Individuals or all occupants?
  • Subleasing: Is it permitted? What is the procedure?
  • Utilities: What utilities are included in the rent? When applying for utilities, be prepared to pay a deposit or installation fee. The person in whose name the utility is registered is legally responsible for the charges incurred.
  • Laundry facilities: Are they available? Any restrictions?
  • Inspection by landlord: Will notice be given as to those who may enter and when?
  • Parking: Is parking available? Is it included in the rent or as an added charge?
  • Pets: Are they allowed? Is there an extra charge for having a pet?

Transportation & Travel

Don't allow yourself the luxury of a new car prior to medical school, unless someone back home is paying the insurance, maintenance, and car payments. The Medical School budget does not cover these expenses, and you may find yourself financially strapped.

The University has relatively convenient and inexpensive public transportation. You can access the Parking and Transportation Services website at www.umn.edu/pts/. Here you will find suggestions and tips for commuting to, from, and around campus. Another option would be to select an apartment near the Medical School and ride your bike or carpool with others.

Minimize your trips back home. If you do travel, attempt to find a group carpooling in your direction. If you must fly, make reservations far enough in advance to take advantage of super-saver fares.


Books & Supplies

Find out from current students and via course websites which textbooks are recommended and/or required. If you sell your old books, you will have more money available to buy new ones. You can buy good reference volumes later in your career when you have more money available. Many students buy and sell textbooks through the Message Board located on the Medical Student Website found at www.student.med.umn.edu.


A Word About Credit Cards

When you use credit cards successfully, you build a positive credit history. Unfortunately, credit card debt can also ruin your credit history if you aren't careful. As a medical student, you will be inundated with offers of credit cards and unsecured lines of credit.

Following are a few tips on how to handle credit cards successfully, especially when on a tight budget:

  • Sign up only for those cards you really need.
  • Sign off on purchases where a credit card is useful or needed (e.g., an emergency car repair, an airline ticket, or a business expense for which you will be reimbursed).
  • Keep your receipts from every purchase and keep a running total, at least in your head, so you won't be surprised by a big balance when your statement arrives, or manually keep track of your debt. Establish a limit of what you can charge monthly on your credit cards. Use a Post-it note to mark down each charge as you make it. As the month progresses, keep an eye on the running total to make sure you are staying within the limit you have set.
  • Pay off in full every month, or at least by every third month. Don't use your credit card for major purchases you can't pay for in 90 days. Don't use it as a credit line for money to make payments on loans (even your student loans), except in the most dire emergency.
  • Pay special, skeptical attention to special offers. Read the fine print, and be sure a great-sounding deal really benefits you.

Credit Card ABCs

  • A credit card is helpful for emergencies, but emergencies rarely happen at the mall.
  • Buying something on SALE is still SPENDING, not SAVING!
  • Credit card debt is not an investment, but it does reduce your ability to invest!
  • Debt from credit cards can make it more difficult to achieve your financial goals.

Little Savings Add Up, Both Now & Through Repayment

Student A

Student A buys coffee 4 mornings per week at Starbucks at $2.50 per cup. Two of those mornings he also buys a muffin at $1.50. What is the actual cost of morning coffee/muffins over time?

Each week Student A purchases:

4 specialty coffees @ $2.50 ea.
2 muffins @ $1.50 ea.

Actual Costs to Student A:

Week $13
Month $52
9 months $468
4 school years $1,872
Over ten-year repayment period $2,760
Total cost, including loan
repayment (Assume 8%
constant interest rate over
a 10-year repayment period.)
$4,632

Student B

Student B buys coffee 4 mornings per week at White Hen at 75 cents per day. Two of those mornings she also buys a muffin at $1.50. What is the actual cost to Student B?

Each week Student B purchases:

4 coffees @ $0.75 ea.
2 muffins @ $1.50 ea.

Actual Costs to Student B:

Week $6
Month $24
9 months $216
4 school years $864
Over ten-year repayment period $1,320
Total cost, including loan
repayment (Assume 8%
constant interest rate over
a 10-year repayment period.)
$2,184

Student C

Student C buys a coffeemaker and Thermos for $40, and he makes coffee at home to bring to class. He purchases one pound of coffee for $6 every month. Student C does not purchase muffins. He eats breakfast at home. How much does Student C spend for morning coffee?

Student C purchases:

1 coffeemaker & a Thermos @ $40
1 pound of coffee each month @ $6
No muffins, eats at home

Actual Costs to Student C:

Week $1.50
Month $6
9 months $54
4 school years
(including coffeemaker)
$256
Over ten-year repayment period $360
Total cost, including loan
repayment (Assume 8%
constant interest rate over
a 10-year repayment period.)
$616
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