Money Management
Financial Literacy is the knowledge gained to implement the most effective and successful money management practices. Financial Literacy is vital for an individuals’ professional and personal growth.
Our key goal is the provide students with the information and tools to be financially literate and successful. We will provide information and tools on the following financial literacy topics:
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Budgeting
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Credit Reports and Scores
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Savings
While you are attending Meharry Medical College, you will need to learn how to manage your finances, plan for changes, and prepare for the unexpected. Budgeting will help you build decision-making skills and your financial and academic goals.
Good Habits for A Sound Financial Future:
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Not all loans are alike, know the differences and borrow wisely;
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Budget your money just as carefully as you budget your time; put yourself on a monthly budget and sick to it;
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You only need one credit card, and it should be used in emergencies;
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Get in the habit of saving even if you can only save $5 per month;
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Keep accurate records of your total debt and minimize it;
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Do not start living the lifestyle of a health professional until you have completed your training;
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Plan now for the financial future you want;
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You may not be offered as much money as you expect when you graduate, so plan accordingly by estimating now what your discretionary (after-tax) income will be after school;
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You are making an investment in your future; make sure the benefits of the investment exceed all costs.
If you need tips with creating a budget, please visit the U.S. Department of Education’s Federal Student Aid website.
A credit report is a record of your credit activities. It lists any credit card accounts or loans you may have, the balances, and how regularly you make your payments. It also shows if any action has been taken against you due to unpaid bills. Potential creditors and lenders use credit reports as a part of their decision-making process to decide whether to extend you credit and the terms.
A credit score is a number that summarize a person’s credit risk based on your credit file and helps lenders to evaluate your creditworthiness.
Here is the breakdown of the credit score ranges:
| 800 – 850 | Excellent |
| 740 – 799 | Very Good |
| 670 – 739 | Good |
| 580 – 669 | Fair |
| 300 – 579 | Poor |
The five factors that affects your credit score are:
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Payment History – 35%: lenders are most concerned about whether you paid your bills on time. Paying late has a negative effect on your score.
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Amounts Owed -30%: measures how much debt you have compared to your available credit limits.
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Length of Credit History – 15%: a longer credit history is favorable because it gives more information about your spending habits. A longer history if reliable borrowing means your score will be higher
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New Credit – 10%: people who open many new credit accounts in a short amount of time are seen as riskier borrowers. Too many applications for credit can mean that you are taking on a lot of debt or that you are in financial trouble.
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Type of Credit Used – 10%: having different kinds of accounts is favorable because it shows that you have experience managing a mix of credit. This is not a significant factor in your credit score unless you do have much other information on which to base your score.
For students who borrows Graduate PLUS loans every academic year, will need to check your credit report for free once a year at the Annual Credit Report website.
If you would like to learn more about credit reports and scores, please visit the USA website.
The Association of American Medical Colleges (AAMC) has created FIRST for webinars about student loans, loan repayment, money management, budgeting, credit, and more.
You can watch the FIRST videos and webinars through AAMC’s website.