PCCC’s Business Leadership Club Teaches Money Management
By Jarred Fernandez—
As advisor of the Business Leadership Club at PCCC, Professor Khloud Kourani, 42, held a meeting via Zoom last week, April 30th.
For many people, the first time they learn how to live on their own and how to take control of their finances, happens in college. Consequently, the majority of students who drop out of school decide to do so because of financial instability, said Alaa Hafez, 22, who is acting treasurer for the BLC. In this meeting, Professor Kourani outlined a number of short and long-term strategies, that could hopefully produce a stress-free environment for students to focus on schoolwork rather money troubles.
Kourani welcomed everyone to the meeting and jumped right into the most vital tactic for effectively managing your finances; creating a budget. The key to any good budgeting system, according to Professor Kourani, is to review your monthly income, list all monthly expenses, and identify the things you are able to live without. This will force you to cut out all unnecessary expenses, while simultaneously making you a more sensible spender.
She continued to say that because students are so young, many have not yet experienced the trials and tribulations of life, leaving them ill-prepared in the unlikely event that they file for bankruptcy. Professor Kourani suggested that an emergency fund provides you with a safety net to fall back on in times of financial crisis. The amount of money you put into that account is entirely up to you.
To create an emergency fund, you must first learn to consistently take out a portion of your paycheck and put into the account. If you do this for a few months, you will at least be able to pay off any medical or other essential expenses. Professor Kourani then pulled out her phone to demonstrate how the app “Chime” helps you set up your emergency fund, by using a feature that will round up your purchases, then automatically move the rounded number to your account.
The next subject Professor Kourani tackled was building your credit early. She stressed that although it is good to get a head start, you need to proceed with caution as it could lead to inescapable credit card debt.
Before purchasing a credit card, you should first carefully research companies to determine which would be the best fit for you, she continued. While researching companies through the internet is a good first step, Professor Kourani suggests that you call their customer service reps directly. She also pointed out that if you cannot get approved for a credit card, credit builder loans can help you get the established credit necessary for membership access, and they don’t even require upfront payment.
After concluding her lesson, professor Kourani turned the meeting over to the acting secretary for the BLC, Susana Nassri-Igne, 21, to give a presentation on student loans. Nassri-Igne informed the group that she would be discussing the biggest mistakes to avoid, when applying for student loans.
She began by encouraging us to vigilantly look for all possible loan options, because choosing the cheapest payment plan will not serve you well. During her freshman year, the money Nassri-Igne thought she would be saving, ended up going right back to the Federal Student Aid. She explained that those loans have the longest payment terms and will end up costing you more in the future due to increased interest.
Even if you manage to find a reasonable payment option, Nassri-Igne stressed how critical it is to payback your student debt on time. Understanding that paying off loans can negatively affect your stress levels, she suggested that you sign up for automatic payments to ensure that you never forget to pay the bill. Every month it will take out money from your account and pay the bill electronically.
By signing up for autopay, Nassri-Igne’s lenders even notified her that she qualified for interest rate reduction. Additionally, she was able to claim a “student loan interest deduction” on her tax returns, resulting in a $2,500 tax cut.
She went on to emphasize how student debts are something you alone are responsible for, and lenders will always penalize late payments. “If you do not keep your contact information updated, you will miss payments,” said Nassri-Igne.
She explained that because she spends most of her time at her grandmother’s place, that was the only mailing address she listed to receive bill notices. However, she also lives with her older sister, and assumed they would notify her if a payment was due.
Subsequently, after a two week visit at her sister’s house, she was notified that she would be charged an expensive late fee because she failed to pay the bill for the previous month. She forgot the bill was due and failed to realize all she had to do was update her billing information.
Nassri-Igne concluded her presentation by reassuring everybody that although student loans can be complicated, she is living proof that it gets easier after a while. Through her own experiences, she was able to spread awareness and share advice with members of PCCC; the same advice she wished she had received her freshman year.