MONEY 101. An MIT Student s Guide to Financial Wellness. Your guide and online resource to answer the questions you have about financial wellness.

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1 MONEY 101 An MIT Student s Guide to Financial Wellness Your guide and online resource to answer the questions you have about financial wellness.

2 FAQs and Tips on: 1. The Value of Credit Union Membership 2. Checking Accounts 3. Credit Cards 4. Student Loans 5. Budgeting, Spending, Saving 6. Credit History & Establishing Good Credit 1. The Value of Credit Union Membership What is a credit union? Credit unions are not-for-profit organizations created to serve their members with financial products and services including savings/checking, loan, financial services and financial education products. MIT Federal Credit Union membership is open to the greater MIT community. The value of joining MIT FCU. Even with an account elsewhere, we find that most students still join since your membership at MIT FCU is a life-long valuable asset. As a part of MIT, the credit union understands the needs of students and alumni and gives back to that larger community. We re convenient for students; with branches and ATMs located right on campus. And after you graduate, MIT FCU will continue to be there for you with auto and home loans, insurance programs, financial planning, and even retirement services. Plus membership with MIT FCU is also available to your immediate family members and house mates. Why not open your account online now? We offer a range of products and services. mitfcu.org/newstudents

3 MIT Federal Credit Union makes adulting easy. Taylor MEMBER SINCE 2015 PRODUCTS The ones most undergraduate students start with. Savings Account: A $5 deposit opens and maintains your membership. Checking Account: Our FREE checking account has NO minimum balance, NO monthly fee, offers overdraft protection options, free online banking and bill payment, and free monthly e-statements or paper statements. SUPPORTING SERVICES AND FEATURES We also offer all the usual online services for FREE, including Bill Pay, e-statements, e-banking, mobile apps, money management and budget setting tools, and automation for protecting and controlling cards, setting travel alerts, and notices for account activity. CREDIT UNION APPS MIT FCU Mobile App: Quickly deposit checks from your mobile phone, check balances and find the nearest location with our free and convenient app. My Mobile Money : Control travel alerts, and card usage from your smart device, even turning cards off and on in real time. POP Money: Safely send funds to friends, family and others quickly and easily via your smart device, even if they don t have the service.

4 2. Checking Accounts This is the account used most often for paying bills, making purchases, and managing your budget. Open one online today. FAQs WITH ANSWERS BASED ON OUR BASIC CHECKING Will I have to pay a monthly fee? No. Is there a minimum balance required? No. Is there a fee if I use my debit card at another bank? You receive 8 surcharge-free withdrawals and/or balance inquiries per month at any non-network financial institution in addition to unlimited access to the 35,000+ ATMs and 6,000+ branches found nationwide. Need more? Find local surcharge-free ATMs with our locator service online or via our app. Getting cash back with a purchase using your debit card is another way to avoid ATM fees. What overdraft protection options do you offer? Share-to-Share Overdraft Lines of Credit Courtesy Pay protection These options include a fee for use. 3. Credit Cards The MIT FCU Student-Friendly Visa MIT FCU offers MIT students a starter Visa credit card with a credit limit of just $1,000. This lets you build a credit history while keeping spending under control. Proof of income or a co-applicant signing as joint on the card is required to get an MIT FCU Visa. Visit our website for tips and FAQs for managing credit cards and avoiding overspending. It s important to understand the unique terms and conditions of each card. Read the credit card contract carefully before you sign it. Visit our website for tips and FAQs to consider when shopping for a credit card.

5 4. Student Loans As college tuition continues to rise each year, many students rely on loans, grants, and other assistance from an outside source. Federal Loan Options Federal Student Loans are supported by the federal government. The most common type of federal student loans are Stafford and PLUS loans. Visit our site for more details on the various types of Stafford and other loans. Private Student Loan Private student loans help fill the funding gaps that federal aid can leave behind and should be considered after all other federal aid and low-cost sources of funding have been exhausted. Student Loans are held in the name of the student and, unlike Stafford Loans, they often require a cosigner. They are issued by private lenders and are not guaranteed or subsidized by the government. Instead, the interest rate is based on the student s credit and/or the credit of any co-signers included on the loan. MIT FCU Offers Private Student Loans We offer a certified private student loan through our partnership with Credit Union Student Choice. Granted in the form of a line of credit, you apply just once and then make multiple draws over the course of your college career. An annual credit review will be performed in order to authorize future draw requests.

6 5. Budgeting and Controlling Expenses Effective planning and budgeting are essential to remain financially healthy. The remaining portion of this booklet outlines brief steps to create an effective financial plan of action. To get started now, visit our website and sign up for our Money Management tool in e-branch. Step 1 Know Your Financial Situation You need to know your as-is financial standing. Knowing your gross income (what you earn before taxes and deductions), and your net income (what you actually have in your pocket after taxes and deductions) allows you to determine your budget, including allotting spending money. Step 2 Create a Spending Plan Developing a spending plan is easy; sticking to it isn t. Determine your monthly expenses, such as rent, car insurance, groceries, personal expenses, and other costs. Subtract these monthly expenses from your net monthly income. If you re negative, you ll need to either reduce your expenses or increase your income. If you find that your income exceeds your expenses, that s great. You ve got excess cash and can design a savings plan to make the best use of that excess money. You can also start a retirement savings account.

7 Step 3 Maintaining a Budget Once you ve developed a budget, monitor it and make adjustments as your situation changes. In the beginning, you should review, evaluate, and revise your budget on a monthly basis. Once your income and expenses have stabilized you can review less frequently. Step 4 Start Saving Now You may not have a huge amount of extra cash to set aside right now, but it s a good idea to get in the habit of saving a portion of your income (regardless of how much). As your extra cash increases (with raises, new jobs, or other sources) you can increase the amount you set aside. 6. Establishing Good Credit History Credit history impacts many things; from applying for a credit card, phone plan, or loan, to buying/leasing a car, purchasing a house, renting an apartment, or even applying for a job. Without building your credit, you may not be able to do these things, and you may end up paying extra deposits or receiving a higher rate. Visit our website for more information on credit bureaus, building your credit history and how to manage your credit.

8 At MIT Federal Credit Union we re a part of the Institute and the community. We understand the needs and lives of the students, and provide service and access that meets the needs of life on campus. We re also available around the country at shared branches and surcharge-free ATMs in all 50 states! While there are many choices when it comes to meeting financial needs for students, we feel confident that we are the best choice for you as you start life at MIT! Got a question? We re available year round to help: Weekdays from 8:00 am - 5:00 pm EST toll-free at For more information on the topics in this brochure, please visit us at mitfcu.org/newstudents Insured by NCUA