Students walking behind Bretherns House

Financial Literacy: Confident Money Management

Empowering You with the Tools for Financial Success

At Moravian University, we believe financial literacy is essential to your success both during your time here and in life beyond college. That’s why we’ve developed resources to help you build financial understanding and make informed decisions. 

This guide provides an overview of key topics like budgeting, credit, saving, investing, and taxes, along with helpful tools and links to external resources to support your financial journey.

In This Guide:

  1. Budgeting
  2. Credit
  3. Saving and Investing
  4. Taxes
  5. Federal Student Loan Repayment
  6. Additional Resources

Dive into financial basics with expert Dylan Stroup ’10. Listen now!

Budgeting

What is a Budget?

A budget is a plan for your money. By tracking income and expenses, you can create a framework for how to spend, save, and prepare for the future.

Why is Budgeting Important?

If you’ve ever looked at your bank account and wondered where your money went, budgeting can provide clarity. Spending more than you earn is one of the most common financial pitfalls. With a flexible, realistic budget, you can control your finances, reduce stress, and prioritize what matters most.

Steps to Start Budgeting

  1. Estimate Your Expenses: Create a rough budget with your expected monthly expenses, broken into categories like rent, books, groceries, and entertainment.
  2. Track Your Spending: Monitor your actual expenses for a few months and compare them with your estimates to identify discrepancies
  3. Compare Income to Expenses: If you’re spending more than you’re earning, make adjustments to your budget.
  4. Differentiate Needs vs. Wants: Small changes, like limiting daily coffee purchases, can result in significant savings over time.
  5. Review and Adjust Regularly: Budgets should evolve with your income, goals, and lifestyle changes.

Our Community Support Coordinator (Case Manager), Aileen Thompson, has a sample budget sheet she often shares with students. She's happy to meet with students through case management and discuss this in more detail. Learn more and contact Aileen today!

  • PocketGuard: A budgeting tool that allows users to track spending, bills, savings goals, and account balances. Free trial and paid subscription options may be available. (Source: Nerdwallet)
  • Zeta: A free budgeting app designed specifically for couples, joint finances or not. The app caters to all types of couples, including those who are living together, engaged, married, or new parents. Sync various accounts to track spending, see your net worth, and manage bills together. (Source: Investopedia)
  • Honeydue: Allows you and your partner to see both financial pictures in one spot, including bank accounts, credit cards, loans, and investments. You can choose how much you share with your significant other. The app categorizes expenses automatically but allows for custom categories. (Source: Nerdwallet)

  • Empower Personal Dashboard: A financial dashboard that allows users to connect accounts, track spending and net worth, and access financial planning tools.

  • YNAB ("why-nab"): A zero-based budgeting app option that also offers educational resources. Once your accounts are synced, YNAB will suggest allocations across categories such as savings, spending, and debt. Though pricier than other options, it offers a free trial year for college students.
  • EveryDollar: A zero-based budgeting app that does not require syncing your financial accounts, but it means entering every transaction manually. Upgrading to the paid version allows account syncing.

  • Goodbudget: Uses the envelope budgeting method, where you allocate incoming funds toward different envelopes or categories. The basic and plus versions do not sync with your bank accounts, so you must manually enter income and spending.

    Note: Moravian University does not endorse a specific budgeting platform. Features, pricing, and availability of third-party financial tools may change. Review each provider's current terms, privacy practices, and costs before creating an account.
     

Credit

Credit Report vs. Credit Score

  • Credit Report: A detailed record of your credit history, including personal information and a list of open and closed accounts. Get your free annual credit report at AnnualCreditReport.com.
  • Credit Score: A numerical representation of your creditworthiness. Scores range from 300-850, with higher scores indicating lower risk to lenders.

Why Credit Matters

Good credit can affect your ability to qualify for loans, credit cards, housing, and other financial products and may influence the interest rates and terms you receive. In some circumstances and where permitted by law, information from a credit report may also be considered for employment or insurance purposes.

What Can Affect Your Credit Score?

Credit-scoring models vary, but factors that may influence your score include:

  1. Payment history: Paying bills on time is one of the most important ways to build and maintain strong credit.
  2. Credit utilization: Keep balances low compared with your total available credit. Experts commonly recommend using no more than 30% of your available credit, and lower utilization may be even better.
  3. Length of credit history: Longer-established accounts can contribute positively to your credit profile.
  4. New credit: Frequently applying for new credit may affect your score.
  5. Types of credit: Credit-scoring models may consider your experience managing different types of credit accounts.

Saving and Investing

Tips for Getting Started

  • Pay Yourself First: Automatically transfer a portion of your paycheck to savings.
  • Track Progress: Use mobile banking to monitor your savings growth.
  • Set Goals: Whether it’s building an emergency fund or saving for a major purchase, clear goals can keep you motivated.

Thinking Ahead: Investing

  1. Start Early: Compound interest allows your money to grow faster over time. Use the SEC Compound Interest Calculator to see the impact of starting now.
  2. Understand Risk: Short-term goals often call for conservative investments, while long-term goals like retirement can benefit from higher-risk options.
  3. Plan Ahead: Set a strategy for reaching both short- and long-term financial milestones.

Build an Emergency Fund:  Even a small emergency fund can help you manage unexpected expenses without relying on credit. Start with an achievable goal and build your savings gradually over time.

Taxes

Do You Need to File Taxes?

Whether you are required to file a federal income tax return depends on several factors, including your income, filing status, age, and the type of income you received. Even if you are not required to file, you may choose to do so if you are eligible for a refund or certain tax credits.

If you received wages, a stipend, scholarship, fellowship, or other payment during the year, you may receive tax documentation related to that payment. The type of documentation depends on the nature of the payment. Contact the appropriate Moravian office if you have questions about a tax document issued by the University.

Depending on your individual circumstances, you or the person who claims you as a dependent may qualify for certain education-related tax benefits. Eligibility requirements and income limits apply and may change over time.

Education-Related Tax Benefits

  • American Opportunity Tax Credit (AOTC): Eligible taxpayers may receive a credit of up to $2,500 per eligible student for qualified education expenses. Eligibility requirements apply.
  • Lifetime Learning Credit (LLC): Eligible taxpayers may receive a credit of up to $2,000 per tax return for qualified education expenses. Eligibility requirements apply.
  • Student Loan Interest Deduction: Eligible taxpayers may be able to deduct up to $2,500 in interest paid on qualified student loans. Income and other eligibility requirements apply.

  • IRS Education Credits: Overview of tax benefits for education.
  • IRS Publication 970: Comprehensive guide on tax benefits for education.
  • Moravian University’s Financial Aid Office: Assistance with tax-related questions for students.

Tax information changes over time. The information provided here is intended for general educational purposes and should not be considered individual tax advice. Visit the IRS website for current requirements and eligibility information or consult a qualified tax professional.
 

Federal Student Loan Repayment

If you borrowed federal student loans, understanding when repayment begins and what repayment options are available is an important part of preparing for life after college. Repayment requirements vary based on your loan type. For example, Direct Subsidized and Direct Unsubsidized Loans generally have a six-month grace period after you graduate, leave school, or drop below half-time enrollment. Visit StudentAid.gov to review your individual loans and current repayment requirements.

Step 1: Complete Exit Counseling
If you borrowed federal student loans, exit counseling provides important information about your loans, repayment responsibilities, and available repayment options. Complete federal student loan exit counseling through StudentAid.gov.

Step 2: Know What You Owe and Who You Owe
Log in to your StudentAid.gov Dashboard to review your federal student loan balance, loan types, interest rates, and loan servicer information.

Step 3: Understand Your Monthly Budget
Before selecting a repayment plan, review your expected income and expenses and consider how a student loan payment fits within your overall budget. Federal Student Aid provides tools to help borrowers compare repayment options and estimate monthly payments.

Step 4: Explore Your Repayment Options
Federal student loan repayment plans vary based on factors such as your loan type, when your loans were borrowed, income, and other circumstances. Repayment options and requirements may change over time.

Use the tools available through StudentAid.gov to review the repayment plans currently available for your loans and estimate potential monthly payments.

Step 5: Stay Connected with Your Loan Servicer
Keep your contact information current with Federal Student Aid and your loan servicer, and carefully review communications about your loans. If you are having difficulty making payments, contact your loan servicer and review your options through StudentAid.gov rather than ignoring your payments.

Additional Resources

Resources for Parents

Take control of your finances today to build a strong foundation for tomorrow. If you have questions or need further assistance, the Moravian University Financial Aid Office is here to help.

finaid@moravian.edu 
610-861-1330