# Understanding Financial Literacy

## Banking and Emergency Funds

Questions to Consider:
1. How do I plan appropriately for a financial emergency?
2. What do I need to keep in mind when it comes to the banking system?

### Emergency Funds

Plan on the unplanned happening to you. It happens to all of us: a car repair, a broken computer, an unplanned visit to the doctor, a friend or relative in desperate need, etc. How will you pay for it? A recent study found that over 60 percent of households could not pay cash for a $400 unexpected expense.Board of Governors of the Federal Reserve System. “Report on the Economic Wellbeing of US Households, 2018” https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm  Could you?

### What Is an Emergency Fund?

An emergency fund is a cash reserve that’s specifically set aside for unplanned expenses or financial emergenciesConsumer Financial Protection Bureau. “An Essential Guide to Building an Emergency Fund.” https://www.consumerfinance.gov/start-small-save-up/an-essential-guide-to-building-an-emergency-fund/?utm_source=newsletter&utm_medium=email&utm_campaign=SSSU_YSFT&utm_content=FY20_Jan_P. Some common examples include car repairs, home repairs, medical bills, and a loss of income. In general, emergency savings can be used for large or small unplanned bills or payments that are not part of your routine monthly expenses and spending.

### Why Do I Need an Emergency Fund?

Without savings, even a minor financial shock could set you back, and if it turns into debt, it can potentially have a lasting impact.
Research suggests that individuals who struggle to recover from a financial shock have less savings to help protect against a future emergency. They may rely on credit cards or loans, which can lead to debt that’s generally harder to pay off. They may also pull from other savings, such as retirement funds, to cover these costs.

### How Much Money Should I Keep in My Emergency Fund?

There is no magic or “official” amount to keep in an emergency fund, but you can look at your own life to get an idea to start with. How much could you put into a bank account to have for emergencies? Some students and their parents will not have a problem paying for most emergencies, but many students are on their own. What can you save up over time? A common recommendation for graduates with full-time jobs is perhaps three to six months’ worth of expenses. This may not be practical for you. A large sampling of students in financial literacy classes recommend approximately $1,000.
One thousand dollars can cover a lot of small to medium unexpected expenses, such as last-minute textbooks, computer repair or replacement, car repair, or a prescription or doctor’s visit. The emergency fund is best kept separate from other money for living expenses to protect it as emergency money. While you could keep cash, an emergency fund is often best kept in a bank, in order to avoid theft or loss and still have easy access by debit card or ATM. Pizza is not an emergency!

### How Do I Create an Emergency Fund?

Emergency funds can be created quickly if you have the money, or over time if you need to save a little from each paycheck, loan, or gift. You can use a financial planning tool similar to the one in section 10.1. Follow these steps:
1. Set an emergency fund goal.
2. Identify an amount to keep on hand.
3. Determine how to fund it, monthly or all at once.
4. Decide where you will keep your fund (e.g., a savings account), and set specific dates to deposit money in it.
5. Start now!

### Safety and Success: Bank on It!

The banking system in the United States is one of the safest and most regulated banking systems in the world. A host of federal and state agencies regulate financial institutions to keep them from accidentally or purposefully losing customer money.

### Banks, Credit Unions, and Online Banking

In the United States, financial institutions (FIs) are divided into multiple types of companies. The banking system is generally divided into banks and credit unions, which have similar offerings and are both regulated and insured by the federal government.

### Choosing a Bank or Credit Union

When choosing a bank or credit union, it is important to understand what you are looking for and what benefits each company provides. Generally, large national banks offer the most advanced technology and a large network of branches. There are also smaller community banks that serve specific groups of people and may offer products to meet the specific needs of the community. For example, a community bank that serves Latino customers might make it easier to send money to family in South American countries, while a bank that focuses on small businesses will promote products specifically needed by business owners.
Credit unions differ from banks in that they don’t have a profit motive. Instead, they are not-for-profit organizations that are owned by the people who bank with them. Each member of a credit union gets one vote for the board of directors, which runs the credit union. This means that whether you have $5 in your account or $5 million, you get the same vote. Credit unions tend to offer better rates and lower fees, on average, than banks.
There is no single best answer for what bank or credit union you should choose. The most vital question to ask and answer about a financial institution is whether it meets both your current and your future needs. Use figure 10.3 to compare different options and determine the best one for you.
Many banks and credit unions do not publish the interest rates paid on deposit accounts or charged on loans. While some colleges have their own bank or credit union right on campus, you should consider visiting at least one other bank or one credit union to compare. You may also explore at least one online bank, which will publish interest rates on their website. Consider interest rates, access to automated teller machines (ATMs), online transfers, automatic paycheck deposits, branch locations if you will use one, and other services important to you. Since you will select a bank or credit union that is insured, do not feel pressure to use any specific institution.

### Banking Products and Services

Banks and credit unions offer a similar set of financial products or services, called account types. The difference between the account types lies primarily in how easy it is to put money into or take money out of an account. Regulations set maximum numbers of transactions (deposits or withdrawals) for each type of account at a bank or credit union.
How you use these accounts is less about the rules and more about how long you plan to keep the money in the account. The main reason to use a bank is to keep your money safe and available. Banks may offer other services that benefit you, such as certificates of deposit (which allow you to earn higher interest over a longer time), retirement accounts, and car and home loans.

### Checking

Checking accounts allow you to deposit money and take money out anytime you want. There are no government limits on the number of transactions, although a bank or credit union might begin to charge you if you make too many transactions. Checking accounts often don’t pay any interest or pay an extremely low rate of interest. They are used to keep money safe and pay bills conveniently.
Checking accounts are ideal for depositing paychecks, cashing paper checks, buying everyday items, and paying your bills. The money you have in your checking account should be money you plan to spend by the end of the month. Any money you don’t plan to spend within a month should be transferred from your checking account to a savings account. Your savings account should be the first bill that you pay each month. You can still add extra at the end of the month!

### Savings Accounts

Savings accounts allow you a specific number of transactions each month or each quarter. If you go over the maximum number of transactions, the bank won’t let you take any more money out or put any more money into the account until the next month. Savings accounts pay a small amount of interest on your money, but usually not enough to keep up with inflation or overcome banking fees (see below).
This actually causes your savings to go backwards. If you earn 2 percent on a savings account but inflation is 3 percent per year, you are losing 1 percent of purchasing power each year. For this reason, money in a savings account should be money you plan to spend within the next 12–48 months. The only exception to this is money you have saved for an emergency, called an emergency fund. Since you never know when an emergency (such as losing your job) is going to happen, you want the money to be available to you in a savings account.

### Debit Cards

When you get a checking account, you’ll also get a debit card, or check card. This card allows you to access the money in your checking account (and savings account at an ATM) using a plastic card similar to a credit card. But it is not a credit card.
A debit card only uses money available in your account. Paying with a debit card is like paying with a paper check, but more immediate and convenient. You will have the option of selecting overdraft protection, which means the bank or credit union will allow you to buy stuff even if you don’t have enough money in your account; they’ll just charge you a fee, perhaps $25, for each event. This can be compared to a high-interest loan. Depending on how many things you buy in a week, overdraft protection could add many fees to your statement and use up your cash so it will not be available for your planned expenses. Consider opting out of overdraft protection and carefully keeping track of your account balance. This way you can only spend the money that you have.
Be aware that by using your debit card at an ATM associated with a different bank, you can incur fees—sometimes from both banks!
Debit cards offer a lot of security benefits over carrying around cash, including the ability to cancel a lost or stolen debit card. While the legal protections on debit cards are not as great as the legal protections on credit cards, you can’t go into debt using a debit card. This inability to go into significant debt is a major advantage for those who struggle with debt.

### Banking Fees

Banks and credit unions charge fees to operate. Many charge fees for a checking or savings account, overdrafts, and other services. You should seek to avoid fees for which you receive no extra services or when you can get similar services elsewhere for free. Two areas that are most subject to fees are services and “triggered” events. Triggered events are primarily caused by actions such as overdrawing your account (an overdraft). Overdraft fees are avoidable. The best way to avoid an overdraft fee is to continually monitor your bank balance and only spend money that you have.
Standard bank fees can often be avoided by taking one or more measures as specified by the bank, such as maintaining a minimum balance or using direct deposit. Avoid getting paid on a payroll or prepaid card unless you know all related costs or have a reason to want to be paid in that manner. Payroll cards often lead to ATM and banking fees, so federal law requires employers to offer you an alternative.Dratch, Dana. “It pays to know these five things about payroll cards.” Credit Cards.com. https://www.creditcards.com/credit-card-news/payroll_cards-fees-employer-1271.php Ask at your financial institution for assistance in setting up an account or accounts that are best for you.

### Online and Mobile Banking

There are other important banking tools you should also consider. Online and mobile banking are among the most important activities in banking. You should list all the things you might want to do regularly with your bank accounts and make sure you can do them through the bank’s website and app. This might include making payments on loans, transferring money between your checking and savings accounts, paying bills through automated bill pay, and creating new savings accounts.
Learn the rules of your account, and keep track of how you use it. This can help you keep costs down and develop a positive banking relationship.

### Earning Interest and Compound Interest

Interest refers to money paid for the privilege of borrowing money. When banks use our money for their investments, they pay us interest. (Remember, our bank accounts are insured, so you can’t lose your money even when the banks use it.) When you take out a loan using the bank’s money, you pay the bank interest.
Compound interest means that you earn interest on the money that you deposit, called the principal, first. After that, you earn money on your money plus all the interest that has been paid to your account. Your earnings are reinvested. Interest on interest! You are being paid on the basis of other people’s money—the interest that they paid you. Over time, this compound interest results in more and more money in your account. The same principle holds true for investing. Banks sometimes have investment services that pay higher interest but include risk to your money, which you typically access after completing your degree or certificate and obtaining full-time work. If you are employed full time and have access to investment, perhaps in a company-sponsored retirement account, see a brief section below on Investing and Buying Power.
Consider the example below, and notice that the amount of interest paid each year is larger than the year before. That is compound interest. The only money deposited by the account owner was the first $2,000.
In this example, at the end of four years, the account owner has put in $2,000 and has added $524.95 of other people’s money in earned interest! You can use online financial calculators to try scenarios for saving, buying a car or home, and even building a retirement account. One source is bankrate.com. Look under Calculators. Do not pursue marketing efforts on the sites suggested or used for examples in this chapter. Stick to the tools used.


# Understanding Financial Literacy

## Credit Cards and Other Debt

Questions to Consider:
1. What do I need to know about student loans?
2. How dangerous is debt?
3. What should I think about when getting and using a credit card?
Yes, taking on too much debt can (and does) have disastrous effects on people’s personal finances, but if used appropriately, debt can be a tool to help you build wealth. Debt is like fire. You can use it to keep yourself warm, cook food, and ward off animals—but if you don’t know how to control it, it’ll burn your house down.

### The Danger of Debt

When you take out a loan, you take on an obligation to pay the money back, with interest, through a monthly payment. You will take this debt with you when you apply for auto loans or home loans, when you enter into a marriage, and so on. Effectively, you have committed your future income to the loan. While this can be a good idea with student loans, take on too many loans and your future self will be poor, no matter how much money you make. Worse, you’ll be transferring more and more of your money to the bank through interest payments.

### Compounding Interest

While compounding works to make you money when you are earning interest on savings or investments, it works against you when you are paying the interest on loans. To avoid compounding interest on loans, make sure your payments are at least enough to cover the interest charged each month. The good news is that the interest you are charged will be listed each month on the loan account statements you are sent by the bank or credit union, and fully amortized loans will always cover the interest costs plus enough principal to pay off what you owe by the end of the loan term.
The two most common loans on which people get stuck paying compounding interest are credit cards and student loans. Paying the minimum payment each month on a credit card will just barely cover the interest charged that month, while anything you buy with the credit card will begin to accrue interest on the day you make the purchase. Since credit cards charge interest daily, you’ll begin paying interest on the interest immediately, starting the compound interest snowball working against you. When you get a credit card, always pay the credit card balance down to $0 each month to avoid the compound interest trap.
Student loans are another way you can be caught in the compound interest trap. When you have an unsubsidized student loan or put your loans into deferment, the interest continues to rack up on the loans. Again, you’ll be charged interest on the interest, not just on the original loan amount, forcing you to pay compound interest on the loan.

### Sacrificing Your Future Fun

When you graduate college, you are most likely to graduate with student loan debt and credit card debt.Debt.org. “Demographics of Debt.”  https://www.debt.org/faqs/americans-in-debt/demographics/ Many students use credit cards and student loans to allow them to pay for fun today, such as trips, clothing, and expensive meals.
Getting into debt while in college forces you to sacrifice your future fun. Say you take out $100,000 in student loans instead of the $50,000 you need, doubling your monthly payment. You are not just making an extra $338 payment; you are also sacrificing anything else you can do with that money. You sacrifice that extra $338 a month, every month, for the next twenty-five years. You can’t use it to go to the movies, pay down other debt, save for a home, take a vacation, or throw a party. When you sign those papers, you sacrifice all those opportunities every month for decades. As a result, when you take out a loan, you should make sure it’s a good loan.

### How Much Good Debt to Take On

A drink of water is refreshing on a hot day and is required to stay alive. Too much water, however, and you will drown.
During college and for the first few years after graduation, most students should only have two loans: student loans and possibly a car loan. We’ve already discussed your student loans, which should be equal to or less than your first year’s expected salary after graduation.
When you get a car, you should keep your car payment to between 10 and 20 percent of your monthly take-home pay. This means if your paycheck is $200 per week, your car payment should be no more than $80–$160 each month.
In total, you want your debt payments (plus rent if you are renting) to be no more than 44 percent of your take-home pay. If you are planning to build wealth, however, you want to cap it at 30 percent of take-home pay.

### Signs You Have Too Much Debt

You can consider yourself in too much debt if you have any of the following situations:
1. You cannot make your minimum credit card payments.
2. Your money is gone before your next paycheck.
3. Bill collectors are contacting you.
4. You are unable to get a loan.
5. Your paycheck is being garnished by creditor.
6. You are considering a debt consolidation loan with extra fees added.
7. Your items are repossessed.
8. You do not know your debt or financial situation.

### Getting and Using a Credit Card

One of the most controversial aspects of personal finance is the use of credit cards. While credit cards can be an incredibly useful tool, their high interest rates, combined with the how easily credit cards can bury you in debt, make them extremely dangerous if not managed correctly.
Reflect on Elan from the chapter introduction and how he felt. How would you (or did you) feel to hold a new credit card with a $2,000 spending limit?

### Benefits of a Credit Card

There are three main benefits of getting a credit card. The first is that credit cards offer a secure and convenient method of making purchases, similar to using a debit card. When you carry cash, you have the potential of having the money lost or stolen. A credit card or debit card, on the other hand, can be canceled and replaced at no cost to you.
Additionally, credit cards offer greater consumer protections than debit cards do. These consumer protections are written into law, and with credit cards you have a maximum liability of $50. With a debit card, you are responsible for transfers made up until the point you report the card stolen. In order to have the same protections as with credit cards, you need to report the card lost or stolen within 48 hours. The longer you wait to report the loss of the card, or the longer it takes you to realize you lost your card, the more money you may be responsible for, up to an unlimited amount.Federal Trade Commission. “Lost Or Stolen Credit, ATM, and Debit Cards.” 2012.
The final benefit is that a credit card will allow you to build your credit score, which is helpful in many aspects of life. While most people associate a credit score with getting better rates on loans, credit scores are also important to getting a job, lowering car insurance rates, and finding an apartment.Purposeful Finance. “Four Surprising Ways Your Credit Score Will Affect Your Life.”  https://www.purposefulfinance.org/home/Articles/2016/four-surprising-ways-your-credit-score-will-affect-your-life

### What Is a Good Credit Score?

Most credit scores have a 300–850 score range. The higher the score, the lower the risk to lenders. A “good” credit score is considered to be in the 670–739 score range.

### Components of a Credit Score and How to Improve Your Credit

Credit scores contain a total of five components. These components are credit payment history (35 percent), credit utilization (30 percent), length of credit history (15 percent), new credit (10 percent), and credit mix (10 percent). The main action you can take to improve your credit score is to stop charging and pay all bills on time. Even if you cannot pay the full amount of the credit card balance, which is the best practice, pay the minimum on time. Paying more is better for your debt load but does not improve your score. Carrying a balance on a credit card does not improve your score. Your score will go down if you pay bills late and owe more than 30 percent of your credit available. Your credit score is a reflection of your willingness and ability to do what you say you will do—pay your debts on time.

### How to Use a Credit Card

All the benefits of credit cards are destroyed if you carry credit card debt. Credit cards should be used as a method of paying for things you can afford, meaning you should only use a credit card if the money is already sitting in your bank account and is budgeted for the item you are buying. If you use credit cards as a loan, you are losing the game.
Every month, you should pay your credit card off in full, meaning you will be bringing the loan amount down to $0. If your statement says you charged $432.56 that month, make sure you can pay off all $432.56. If you do this, you won’t pay any interest on the credit card.
But what happens if you don’t pay it off in full? If you are even one cent short on the payment, meaning you pay $432.55 instead, you must pay daily interest on the entire amount from the date you made the purchases. Your credit card company, of course, will be perfectly happy for you to make smaller payments—that’s how they make money. It is not uncommon for people to pay twice as much as the amount purchased and take years to pay off a credit card when they only pay the minimum payment each month.
What to Look for in Your Initial Credit Card
1. Find a Low-Rate Credit Card
Even though you plan to never pay interest, mistakes will happen, and you don’t want to be paying high interest while you fix a misstep. Start by narrowing the hundreds of card options to the few with the lowest APR (annual percentage rate).

2. Avoid Cards with Annual Fees or Minimum Usage Requirements
Your first credit card should ideally be one you can keep forever, but that’s expensive to do if they charge you an annual fee or have other requirements just for having the card. There are many options that won’t require you to spend a minimum amount each month and won’t charge you an annual fee.

3. Keep the Credit Limit Equal to Two Weeks’ Take-Home Pay
Even though you want to pay your credit card off in full, most people will max out their credit cards once or twice while they are building their good financial habits. If this happens to you, having a small credit limit makes that mistake a small mistake instead of a $5,000 mistake.

4. Avoid Rewards Cards
Everyone loves to talk about rewards cards, but credit card companies wouldn’t offer rewards if they didn’t earn them a profit. Rewards systems with credit cards are designed by experts to get you to spend more money and pay more interest than you otherwise would. Until you build a strong habit of paying off your card in full each month, don’t step into their trap.


# Understanding Financial Literacy

## Education Debt: Paying for College

Questions to Consider:
1. What choices should you consider when taking on student debt?
2. How do you match debt to postgraduate income?
3. What types of financial aid are available?
4. How do you apply for financial aid?
5. What are the best repayment strategies?
As you progress through your college experience, the cost of college can add up rapidly. Worse, your anxiety about the cost of college may rise faster as you hear about the rising costs of college and horror stories regarding the “student loan crisis.” It is important to remember that you are in control of your choices and the cost of your college experience, and you do not have to be a sad statistic.

### Education Choices

Education is vital to living. Education starts at the beginning of our life, and as we grow, we learn language, sharing, and to look both ways before crossing the street. We also generally pursue a secular or public education that often ends at high school graduation. After that, we have many choices, including getting a job and stopping our education, working at a trade or business started by our parents and bypassing additional schooling, earning a certificate from a community college or four-year college or university, earning a two-year or associate degree from one of the same schools, and completing a bachelor’s or advanced degree at a college or university. We can choose to attend a public or private school. We can live at home or on a campus.
Each of these choices impacts our debt, happiness, and earning power. The average income goes up with an increase in education, but that is not an absolute rule. The New York Federal Reserve Bank reported in 2017 that approximately 34 percent of college graduates worked in a job that did not require a college degree,https://www.forbes.com/sites/prestoncooper2/2017/07/13/new-york-fed-highlights-underemployment-among-college-graduates/#55be172f40d8 and in 2013, CNN Money reported on a study from Georgetown University’s Center on Education and the Workforce showing that nearly 30 percent of Americans with two-year degrees are now earning more than graduates with bachelor’s degrees.https://www.communitycollegereview.com/blog/studies-show-community-college-may-offer-superior-roi-to-some-four-year-schools Of course, many well-paying occupations do require a bachelor’s or master’s degree. You have started on a path that may be perfect for you, but you may also choose to make adjustments.
College success from a financial perspective means that you must:
1. Know the total cost of the education
2. Consider job market trends
3. Work hard at school during the education
4. Pursue ways to reduce costs
Most importantly: Buy only the amount of education that returns more than you invest.
According to US News & World Report, the average cost of college (including university) tuition and fees varies widely. In-state colleges average $9,716 while out-of-state students pay $21,629 for the same state college. Private colleges average $35,676. The local community college averages approximately $3,726. On-campus housing and meals, if available, can add approximately $10,000 per year.https://www.usnews.com/education/best-colleges/paying-for-college/articles/what-you-need-to-know-about-college-tuition-costs See the table below, and create your own chart after you research.
You may need to adjust your college plan as circumstances change for you and in the job market. You can modify plans based on funding opportunities available to you (see next sections) and your location. You may prefer a community-college-only education, or you may complete two years at a community college and then transfer to a university to complete a bachelor’s degree. Living at home for the first two years or all of your college education will save a lot of money if your circumstances allow. Be creative!

### Key to Success: Matching Student Debt to Postgraduation Income

Students and parents often ask, “How much debt should I have?” The problem is that the correct answer depends on your personal situation. A big-firm attorney in a major city might make $120,000 in their first year as a lawyer. Having $100,00 or even $200,000 in student debt in this situation may be reasonable. But a high school teacher making $40,000 in their first year would never be able to pay off the debt.
The amount of debt you take on should be tied to the income you expect.

### Research Your Starting Salary

Begin by researching your expected starting salary when you graduate. Most students expect to make significantly more than they will actually make.Hess, Abigail. “College Grades expect to earn $60,000.” 2019. CNBC. https://www.cnbc.com/2019/02/15/college-grads-expect-to-earn-60000-in-their-first-job----few-do.html As a result, your salary expectations are likely much higher than reality. Ask professors at your college what is typical for a recent graduate in your field, or do informational interviews with human resource managers at local companies. Explore the US Bureau of Labor Statistics’ . PayScale also has a handy tool for getting general information based on your personal experience and location. Search websites and talk to employees of companies that interest you for future employment to identify real starting salaries.

### Undergraduate Degree: 1 x Annual Salary

For students working toward a bachelor’s or associate degree, both forms of undergraduate degrees, you should try to keep your student loans equal to or less than your expected first year’s salary. So if, based on research, you expect to make $40,000 in your first year out of college, then $33,000 in student loans would be a reasonable amount for you to pay out of a monthly budget with some sacrifice.

### Advanced Degrees: 1–2 x Annual Salary

Once you’ve graduated with your bachelor’s degree, you may want to get an advanced degree such as a master’s degree, a law degree, a medical degree, or a doctorate. While these degrees can greatly increase your income, you still need to match your student debt to your expected income. Advanced degrees can often double your expected annual salary, meaning your total debt for all your degrees should be equal to or less than twice your expected first job income. A lower number for the debt portion of your education would be more manageable.
Your goal should be to pay for college using multiple methods so your student loan debt can be as small as possible, rather than just making low monthly payments on a large loan that will lead to a higher overall cost.

### Types of Financial Aid: How to Pay for College

The true cost of college may be more than you expected, but you can make an effort to make the cost less than many might think. While the price tag for a school might say $40,000, the net cost of college may be significantly less. The net price for a college is the true cost a family will pay when grants, scholarships, and education tax benefits are factored in. The net cost for the average family at a public in-state school is only $3,980. And for a private school, free financial aid money reduces the cost to the average family from $32,410 per year to just $14,890.
If you haven’t visited your college’s financial aid office recently, it’s probably worth it to talk with them. You must seek out opportunities, complete paperwork, and learn and meet criteria, but it can save you thousands of dollars.

### Grants and Scholarships

Grants and scholarships are free money you can use to pay for college. Unlike loans, you never have to pay back a grant or a scholarship. All you have to do is go to school. And you don’t have to be a straight-A student to get grants and scholarships. There is so much free money, in fact, that billions of dollars go unclaimed every year.https://www.usatoday.com/story/college/2015/01/20/29-billion-unused-federal-grant-awards-in-last-academic-year/37399897/
While some grants and scholarships are based on a student’s academic record, many are given to average students based on their major, ethnic background, gender, religion, or other factors. There are likely dozens or hundreds of scholarships and grants available to you personally if you look for them.

### Federal Grants

Federal Pell Grants are awarded to students based on financial need, although there is no income or wealth limit on the grant program. The Pell Grant can give you more than $6,000 per year in free money toward tuition, fees, and living expenses.https://studentaid.ed.gov/sa/types/grants-scholarships/pell If you qualify for a Pell Grant based on your financial need, you will automatically get the money.
Federal Supplemental Educational Opportunity Grants (FSEOGs) are additional free money available to students with financial need. Through the FSEOG program, you can receive up to an additional $4,000 in free money. These grants are distributed through your school’s financial aid department on a first-come, first-served basis, so pay close attention to deadlines.
Teacher Education Assistance for College and Higher Education (TEACH) Grants are designed to help students who plan to go into the teaching profession. You can receive up to $4,000 per year through the TEACH Grant. To be eligible for a TEACH Grant, you must take specific classes and majors and must hold a qualifying teaching job for at least four years after graduation. If you do not fulfill these obligations, your TEACH Grant will be converted to a loan, which you will have to pay back with both interest and back interest.
There are numerous other grants available through individual states, employers, colleges, and private organizations.
State Grants
Most states also have grant programs for their residents, often based on financial need. Eleven states have even implemented free college tuition programs for residents who plan to continue to live in the state. Even some medical schools are beginning to be tuition free. Check your school’s financial aid office and your state’s department of education for details.
College/University Grants and Scholarships
Most colleges and universities have their own scholarships and grants. These are distributed through a wide variety of sources, including the school’s financial aid office, the school’s endowment fund, individual departments, and clubs on campus.
Private Organization Grants and Scholarships
A wide variety of grants and scholarships and are awarded by foundations, civic groups, companies, religious groups, professional organizations, and charities. Most are small awards under $4,000, but multiple awards can add up to large amounts of money each year. Your financial aid office can help you find these opportunities.
Employer Grants and Scholarships
Many employers also offer free money to help employees go to school. A common work benefit is a tuition reimbursement program, where employers will pay students extra money to cover the cost of tuition once they’ve earned a passing grade in a college class. And some companies are going even further, offering to pay 100 percent of college costs for employees. Check to see whether your employer offers any kind of educational support.

### Additional Federal Support

The federal government offers a handful of additional options for college students to find financial support.

### Education Tax Credits

The IRS gives out free money to students and their parents through two tax credits, although you will have to choose between them. The American opportunity tax credit (AOTC) will refund up to $2,500 of qualifying education expenses per eligible student, while the lifetime learning credit (LLC) refunds up to $2,000 per year regardless of the number of qualifying students.
While the AOTC may be a better tax credit to choose for some, it can only be claimed for four years for each student, and it has other limitations. The LLC has fewer limitations, and there is no limit on the number of years you can claim it. Lifetime learners and nontraditional students may consider the LLC a better choice. Calculate the benefits for your situation.
The IRS warns taxpayers to be careful when claiming the credits. There are potential penalties for incorrectly claiming the credits, and you or your family should consult a tax professional or financial adviser when claiming these credits.

### Federal Work-Study Program

The Federal Work-Study Program provides part-time jobs through colleges and universities to students who are enrolled in the school. The program offers students the opportunity to work in their field, for their school, or for a nonprofit or civic organization to help pay for the cost of college. If your school participates in the program, it will be offered through your school’s financial aid office.

### Student Loans

Federal student loans are offered through the US Department of Education and are designed to give easy and inexpensive access to loans for school. You don’t have to make payments on the loans while you are in school, and the interest on the loans is tax deductible for most people. Direct Loans, also called Federal Stafford Loans, have a competitive fixed interest rate and don’t require a credit check or cosigner.

### Direct Subsidized Loans

Direct Subsidized Loans are federal student loans on which the government pays the interest while you are in school. Direct Subsidized Loans are made based on financial need as calculated from the information you provide in your application. Qualifying students can get up to $3,500 in subsidized loans in their first year, $4,500 in their second year, and $5,500 in later years of their college education.

### Direct Unsubsidized Loans

Direct Unsubsidized Loans are federal loans on which you are charged interest while you are in school. If you don’t make interest payments while in school, the interest will be added to the loan amount each year and will result in a larger student loan balance when you graduate. The amount you can borrow each year depends on numerous factors, with a maximum of $12,500 annually for undergraduates and $20,500 annually for professional or graduate students.
There are also aggregate loan limits that apply to put a maximum cap on the total amount you can borrow for student loans.

### Direct PLUS Loans

Direct PLUS Loans are additional loans a parent, grandparent, or graduate student can take out to help pay for additional costs of college. PLUS loans require a credit check and have higher interest rates, but the interest is still tax deductible. The maximum PLUS loan you can receive is the remaining cost of attending the school.
Parents and other family members should be careful when taking out PLUS loans on behalf of a child. Whoever is on the loan is responsible for the loan forever, and the loan generally cannot be forgiven in bankruptcy. The government can also take Social Security benefits should the loan not be repaid.

### Private Loans

Private loans are also available for students who need them from banks, credit unions, private investors, and even predatory lenders. But with all the other resources for paying for college, a private loan is generally unnecessary and unwise. Private loans will require a credit check and potentially a cosigner, they will likely have higher interest rates, and the interest is not tax deductible. As a general rule, you should be wary of private student loans or avoid them altogether.

### Repayment Strategies

Payments on student loans will begin shortly after you graduate. While many websites, financial “gurus,” and talking heads in the media will encourage you to pay off your student loans as quickly as possible, you should give careful consideration to your repayment options and how they may impact your financial plans. Quickly paying off your student loans or refinancing your student loans into a private loan may be the worst option available to you.

### Payment Plans

The federal government has eight separate loan repayment programs, each with their own way of calculating the payment you owe. Five of the programs tie loan payments to your income, which can make it easier to afford your student loans when you are just starting off in your career. The programs are described briefly below, but you should seek the help of a licensed fiduciary financial adviser familiar with student loans when making decisions related to student loan payment plans.
The standard repayment plan sets a consistent monthly payment to pay off your loan within 10 years (or up to 30 years for consolidated loans). You can also choose a graduated repayment plan, which will begin with lower payments and then increase the payment every two years. The graduated plan is also designed to pay off your student loans in 10 years (or up to 30 years for consolidated loans). A third option is the extended repayment plan, which provides a fixed or graduated payment for up to 25 years. However, none of these programs are ideal for individuals planning to seek loan forgiveness options, which are discussed below.
Beyond the “normal” repayment options, the government offers five income-based repayment options: (1) the Pay As You Earn (PAYE) repayment plan, (2) the Revised Pay As You Earn (REPAYE) repayment plan, (3) the Income-Based Repayment (IBR) plan, (4) the Income-Contingent Repayment (ICR) plan, and (5) the Income-Sensitive Repayment (ISR) plan. Each program has its method of calculating payments, along with specific requirements for eligibility and rules for staying eligible in the program. Many income-based repayment plans are also eligible for loan forgiveness after a set period of time, assuming you follow all the rules and remain eligible.

### Loan Forgiveness Programs

Many income-based repayment options also have a loan forgiveness feature built into the repayment plan. If you make 100 percent of your payments on time and follow all the other plan rules, any remaining loan balance at the end of the plan repayment term (typically 20 to 30 years) will be forgiven. This means you will not have to pay the remainder on your student loans.
This loan forgiveness, however, comes with a catch: taxes. Any forgiven balance will be counted and taxed as income during that year. So if you have a $100,000 loan forgiven, you could be looking at an additional $20,000 tax bill that year (assuming you were in the 20 percent marginal tax rate).
Another option is the Public Service Loan Forgiveness (PSLF) program for students who go on to work for a nonprofit or government organization. If eligible, you can have your loans forgiven after working for 10 years in a qualifying public service job and making 120 on-time payments on your loans. A major advantage of PSLF is that the loan forgiveness may not be taxed as income in the year the loan is forgiven.

### Consider Professional Advice

The complexity of the payment and forgiveness programs makes it difficult for nonexperts to choose the best strategy to minimize costs. Additionally, the strict rules and potential tax implications create a minefield of potential financial problems. In 2017, the first year graduates were eligible for the PSLF program, 99 percent of applicants were denied due to misunderstanding the programs or having broken one of the many requirements for eligibility.https://www.forbes.com/sites/zackfriedman/2019/05/01/99-of-borrowers-rejected-again-for-student-loan-forgiveness/

### Your Rights as a Loan Recipient

As a recipient of a federal student loan, you have the same rights and protections as you would for any other loan. This includes the right to know the terms and conditions for any loan before signing the paperwork. You also have the right to know information on your credit report and to dispute any loan or information on your credit file.
If you end up in collections, you also have several rights, even though you have missed loan payments. Debt collectors can only call you between 8 a.m. and 9 p.m. They also cannot harass you, threaten you, or call you at work once you’ve told them to stop. The United States doesn’t have debtors’ prisons, so anyone threatening you with arrest or jail time is automatically breaking the law.
Federal student loans also come with many other rights, including the right to put your loan in deferment or forbearance (pushing pause on making payments) under qualifying circumstances. Deferment or forbearance can be granted if you lose your job, go back to school, or have an economic hardship. If you have a life event that makes it difficult to make your payments, immediately contact the student loan servicing company on your loan statements to see if you can pause your student loan payments.
The Consumer Financial Protection Bureau (CFPB) has created a series of sample letters you can use to respond to a debt collector. You can also file a complaint with the CFPB if you believe your rights have been violated.

### Applying for Financial Aid, FAFSA, and Everything Else

Take this first step—you will need to do it. The federal government offers a standard form called the Free Application for Federal Student Aid (FAFSA), which qualifies you for federal financial aid and also opens the door for nearly all other financial aid. Most grants and scholarships require you to fill out the FAFSA, and they base their decisions on the information in the application.
The FAFSA only requests financial aid for the specific year you file your application. This means you will need to file a FAFSA for each year you are in college. Since your financial needs will change over time, you may qualify for financial aid even if you did not qualify before.
You can apply for the FAFSA through your college’s financial aid office or at studentaid.gov if you don’t have access to a financial aid office. Once you file a FAFSA, any college can gain access to the information (with your approval), so you can shop around for financial aid offers from colleges.

### Maintaining Financial Aid

To maintain your financial aid throughout your college, you need to make sure you meet the eligibility requirements for each year you are in school, not just the year of your initial application. The basic requirements include being a US citizen or eligible noncitizen, having a valid Social Security number, and registering for selective service if required. Undocumented residents may receive financial aid as well and should check with their school’s financial aid office.
You also must make satisfactory academic progress, including meeting a minimum grade-point average, taking and completing a minimum number of classes, and making progress toward graduation or a certificate. Your school will have a policy for satisfactory academic progress, which you can get from the financial aid office.

### What to Do with Extra Financial Aid Money

One expensive mistake that students make with financial aid money is spending the money on noneducation expenses. Students often use financial aid, including student loans, to purchase clothing, take vacations, or dine out at restaurants. Nearly 3 percent spend student loan money on alcohol and drugs.https://studentloanhero.com/featured/smart-dumb-money-moves-students/ These noneducation expenses are major contributors to student loan debt, which will make it harder for you to afford a home, take vacations, or save for your retirement after you graduate.
When you have extra student loan money, consider saving it for future education expenses. Just like you will need an emergency fund all your adult life, you will want an emergency fund for college when expensive books or travel abroad programs present unexpected costs. If you make it through your college years with extra money in your savings, you can use the money to help pay down debt.


# Understanding Financial Literacy

## Defending against Attack: Securing Your Identity and Accounts

Questions to Consider:
1. How should you manage passwords and online security?
2. What’s the best way to deal with identity theft?
3. How can you get help and avoid scams?
Identity theft is one of the fastest growing crimes in the United States, and the FBI estimates that more than 10 million new victims are harmed each year.https://archives.fbi.gov/archives/news/stories/2004/october/preventidt_102104 Among the problems contributing to this rapid increase in identity theft are the significant amount of data stored online and the poor security practices of both individuals and companies. In 2017, Equifax announced that their security had been breached and the data of every adult in the country was likely compromised.https://www.purposefulfinance.org/home/Articles/2017/understanding-the-equifax-security-breach

### Passwords and Security

The first line of defense to prevent identity theft is to create strong passwords and take other security measures with your online accounts. An important factor in the strength of a password is the length of the password.Information Security Institute. “Password Security:Complexity Versus Length.” 2019. https://resources.infosecinstitute.com/password-security-complexity-vs-length/ This means a password of 12 characters or more is desirable. Consider using pass phrases, or short sentences, rather than passwords. You should vary your pass phrases for each site so a hacker that gets your password can only use it for a single site. Government agencies and security experts are recommending password management software such as LastPass to help with remembering all of these differing passwords.
Another important strategy is to implement two-factor authentication (TFA) on all your online accounts. TFA adds another method of identifying you in addition to your password. Many TFA systems use your cell phone and will text you a code to allow you to log in to your account. A criminal would then need both your password and access to your cell phone to log in. Check the settings on your email, bank website, and other accounts to see how to enable two-factor authentication.

### Preventing and Dealing with Identity Theft

Setting strong passwords and enabling two-factor authentication will help keep criminals out of your online banking, email, and other important accounts. Many criminals use lower-tech methods of stealing your identity, however, including tricking or scaring you into giving out information or simply digging through your trash to find account statements.

### Never Give Info to Someone Who Contacts You

Never provide a person with personal information unless you initiated the contact. If someone calls you asking for personal information, tell them you’ll call them back. Then ignore the phone number or website they give you, and instead look up the phone number for the organization on their official website. A legitimate company or government agency will never require you to stay on the line with them to solve the problem.

### Shred Everything

You should also purchase an inexpensive cross-cut shredder and get in the habit of shredding all paperwork and mail before you throw it away. A good rule of thumb is that if the paper has your name on it, you should shred it before throwing it out.

### Order Your Credit Report Annually

At least once per year, you should get your credit report from the credit reporting agencies through annualcreditreport.com, which is the only website approved by the Federal and State governments. The three major agencies -- Transunion, Equifax, and Experian -- all provide the legally mandated free report through this website. Learn how to read a credit report from one of these agencies.
Look for incorrect information or accounts you don’t recognize. If you see accounts you didn’t open on your credit report, file a report with the local police and the local FBI field office. You can also file a complaint with the Federal Trade Commission and Internet Crime Complaint Center.

### Creating Strong Alliances: Getting Help and Avoiding Scams

As you’ve read through this chapter, it may have dawned on you that this personal finance stuff is a lot more complicated than it seems. There are people who have devoted their entire educations and careers to mastering single areas of personal finance, such as taxes, investing, and estate planning. When you feel it’s time to get professional help, there are many qualified professionals who can assist you. Not everyone who calls themselves a financial adviser is actually looking out for your best interest, however.
The terms financial adviser, financial planner, wealth manager, and many other impressive-sounding job titles are not regulated by the government. Anyone can put these job titles on their business cards. You need to be able to differentiate between a qualified professional and those who are untrained product salespeople, predatory financial businesses, or outright scams.

### Predatory Practices Aimed at College Students

As a college student, you are a prime target for predatory practices designed to make the adviser or company rich at your expense.

### Annuities and Life Insurance

Annuities and life insurance products are often aggressively sold to college students. They are generally inappropriate for college students and even most college graduates because they have high fees and lower returns than many other investment options, and the benefits are rarely needed by young people.North American Securities Administrators Association. Top Investor Threats. ttp://www.nasaa.org/top-investor-threats /

### Investment Schemes

Regulators identify specialized investments, such as promissory notes, real estate, oil and gas, and gold, as a major threat to investors. Investing systems, including stock picking and buying or selling strategies, are also a concern. Academic research has continually disproven these strategies.Kadan, Maduriera, Wang and Zach. “Stock Picking, Industry Picking, and Market Timing in Sell-Side Research.” Singapore Management University. 2012.
If someone is pitching you on their special system or secret strategy, be extremely skeptical. Legitimate investments are regulated by government agencies and are therefore never a secret.

### Sources of Good Information and Help

With all the high-cost, predatory, and scam financial advice out there, it is important to know where to turn for help.

### Personal Finance Classes

One option is to look for a personal finance class, which will take the concepts found in this chapter and expand on them for an entire semester. Your college may have a financial literacy, personal finance, or money management class available.
Be wary of personal finance or investing classes offered through other sources, however, as many include hidden sales agendas and aggressive pitches to buy a company’s financial products. Never make an investment decision, buy a product, or sign a contract at a class, and always seek advice from others on any opportunity.

### Websites and Government Resources

There are a ridiculous number of websites available to the public to help with your personal finances. When choosing a website for help, lean toward sites run by a legitimate government agencies or nonprofit organizations.
The first place you should look for help with finances is the official website of related government agencies. If you have a question about insurance, look to your state’s insurance commissioner website. If you are having problems with your apartment, contact your city’s housing authority.
Government agencies not only have the authoritative word on any legal matter, but are also generally unbiased. The downside to government websites is that they can be hard to understand, with legal wording taken directly from the law. Some government agencies are also prohibited from giving advice to the public, leaving it up to you to apply the information they provide.
There are also many nonprofit organizations that have been established to assist the public with finances. Nonprofit organizations may have information that is easier to understand, and they may also be able to offer personal advice.
Official Government Websites
1. Personal Finance: Consumer Financial Protection Bureau, consumerfinance.gov
2. Taxes: Internal Revenue Service, irs.gov
3. Retirement: Social Security Administration, ssa.gov
4. Investing: Securities Exchange Commission, sec.gov
5. Investing: North American Securities Administrators Association, nasaa.org (state and provincial investment regulators)
Nonprofit Organization Websites
1. National Endowment for Financial Education, nefe.org
2. National Foundation for Credit Counseling, nfcc.org
3. Consumer Reports, consumerreports.org (national consumer advocacy organization)
4. Purposeful Finance, purposefulfinance.org (a nonprofit organization run by this chapter’s author)

### Your College’s Financial Aid Office

The financial aid or student aid office of your college may also be a good place to look for financial help, especially surrounding student loans. It is important to realize, however, that a conflict of interest exists between you and the financial aid adviser. Your college’s financial aid office is charged with helping you find the money to go to college, but it isn’t charged with making sure you don’t take on too much student debt. It is possible to get good advice on getting money to pay for college that is also bad advice for your future finances.
College financial aid counselors are also generally not trained in other areas of finance and should not be relied on for advice on investing, taxes, noncollege debt, or other financial matters. To get help with these areas, consult a qualified professional who can guide you with fewer conflicts of interest, such as the professionals listed below.

### Chapter Summary

There are a lot of benefits to good financial management. Primarily, it generally allows you to do more of what you want with your life. When you have poor financial habits, too much of your money goes into other people’s pockets. But when you have good financial management habits, you can afford to do more because you have worked hard, separated needs from wants, saved and invested, and avoided credit card and debt pitfalls.
Search the articles at PurposefulFinance.org and find one you deem interesting.
Why do you find it interesting, and how can you apply it to your life? How does the article relate to the concepts in this chapter?
Revisit the questions you answered at the beginning of the chapter, and consider one concept or practice you learned in this chapter that might change your answer to one of them.
1. I actively and regularly plan and/or monitor my finances.
2. I understand the benefits and risks of credit.
3. I have a plan to repay my student loans.
4. I regularly take steps to protect my identity and assets.

### Where Do You Go from Here?

Financial literacy is a topic that many college students struggle with, but good financial planning habits will benefit you long after your college days are behind you. What would you like to learn more about? Choose a topic from the list below, and create an annotated bibliography that would direct further research.
1. Marrying personal finance goals with financial planning
2. Creating a saving and spending plan
3. Best practices concerning credit cards
4. Financing a college education


# Engaging in a Healthy Lifestyle

## Introduction

### Student Survey

How do you feel about health and wellness? These questions will help you determine how the chapter concepts relate to you right now. As we are introduced to new concepts and practices, it can be informative to reflect on how your understanding changes over time. We’ll revisit these questions at the end of the chapter to help you identify opportunities for improved health. Take this quick survey to figure it out, ranking questions on a scale of 1–4, 1 meaning “least like me” and 4 meaning “most like me.”
1. I eat enough fruits and vegetables every day.
2. I get enough sleep.
3. I have, for the most part, healthy relationships with friends and family.
4. I feel like I know how to manage stress.
You can also take the Chapter 11 survey anonymously online.

### About this Chapter

This chapter explores the many ways your health is impacted by your lifestyle choices. The goal of this material is to help you do the following:
1. Describe actions you can take to improve your physical health.
2. Identify ways to maintain and enhance your emotional health.
3. Understand mental health risks and warning signs.
4. Articulate reasons and ways to maintain healthy relationships.
5. Outline steps you can take to be more safety conscious.
Recent headlines were buzzing with news about a 17-year-old boy who lost his eyesight because of a poor diet. While the boy ate enough food and his weight was considered normal, when doctors investigated, they discovered he didn’t eat enough - food. A self-described picky eater, the teen’s daily diet consisted of sausage, deli ham, white bread, Pringles, and french fries. His food choices led to numerous nutritional deficiencies of several essential vitamins and minerals, causing nutritional optic neuropathy.Harrison, Warburton, Lux, and Atan. Blindness caused by a junk food diet.
Have you heard the saying “you are what you eat”? If so, likely a parent or someone who loves you said it while coaxing you to eat your vegetables. Are we really what we eat, and what does this phrase actually mean? While the example of the boy who lost his vision may be extreme, the food we eat does impact our physical and mental health. What’s at the end of our fork can keep us healthy or eventually make us sick. Every 27 days, our skin replaces itself and our body makes new cells from the food we eat.https://www.webmd.com/beauty/cosmetic-procedures-overview-skin#1 And according to Dr. Libby Weaver, every three months we completely rebuild and replace our blood supply. What you eat becomes you.
It’s not only what you eat that impacts your health but also how much you exercise, how effectively you deal with stress, how well you sleep, your work habits, and even your relationships—these things all have an impact on your well-being.
There are two primary reasons we become unhealthy. First, we do not deliver enough nutrients for our cells to operate properly, and second, our cells are bombarded with too many toxins. Keeping it simple, good health is proper nutrients in, toxins out. Toxins come from a host of sources—certain foods, the environment, stressful relationships, smoking, vaping, and alcohol and drug use. And if we don’t sleep and exercise enough, toxins can hang around long enough to cause us harm.
As a first-year college student you will make many choices without parental oversight, including the food you eat and the way you take care of your body and brain. Some choices put you on a path to health, and other choices can lead you down a path toward illness. There is a strong connection between success in college and your ability to stay healthy.
Health is more than a strong body that doesn’t get sick. Health also includes your overall sense of well-being (mental, emotional) and healthy relationships. Good health is about making positive choices in all of these areas, and avoiding destructive choices. It’s about learning to be smart, to set boundaries, to watch out for your safety, and to take care of the one body that will carry you through life.
While health and wellness are often interchanged, it is important to differentiate the two concepts. a state of physical, mental, and social well-being, while  is a process through which people become aware of and make choices toward a healthy and fulfilling life.


# Engaging in a Healthy Lifestyle

## Taking Care of Your Physical Health

Questions to Consider:
1. What is healthy eating?
2. Why is it important to stay hydrated?
3. How important is exercise to a healthy body?
4. Are you getting enough sleep to be healthy?
5. What are toxins, and how can they affect your health?
You have one body. Treat it well so as to maximize its ability to serve you throughout your life. Often physical health gets moved to the bottom of the priority list when we are busy. Taking care of your physical health doesn’t mean six-pack abs or training for a marathon. It means honoring your physical needs so your body can function properly, feeding your cells the nutrients that will keep your body working well your entire life, and minimizing exposure to toxins to reduce your risk of disease.

### Healthy Eating

While it’s not the only thing that contributes to great health, what you eat makes a huge difference. We have 37 trillion cells in our body. The only way they function optimally is with good nutrition. As a college student, you will be surrounded by temptations to eat poorly or even to overeat. It’s now up to you to make wise choices in the face of these temptations. Your dining hall is likely full of many healthy foods and just as many unhealthy foods. You may grab food on the run while racing to class or order a pizza at midnight while studying for a test. Lobby vending machines or a stash of snacks in your room should not turn into a substitute for real meals. The downside of fast food and easy access treats is that many are loaded with sugar, salt, or both.
The United States Department of Agriculture (USDA) updated their Healthy Plate Guidelines in 2011. MyPlate illustrates five different food groups considered the building blocks for a healthy diet—vegetables, fruits, protein, grains, and dairy.
It’s also important to know what is not a healthy plate. A healthy plate is low in refined carbohydrates (donuts, pastries, pasta, cookies), low in sugar, and low in saturated fat (although we need healthy fats like avocado and nuts). You can learn more at https://www.myplate.gov/.
While the USDA’s MyPlate was revised to reflect some key findings at that time, nutritionists at Harvard felt it didn’t offer the most complete picture when it comes to basic nutrition guidelines. They created The Healthy Eating Plate, which is based on what they consider to be the best available science. Similar to MyPlate, half the plate is vegetables and fruit. Aim for eight servings of veggies or fruits a day, more veggies than fruits. It’s important to note that the Harvard version was created without the political pressure from food industry lobbyists (for example, the dairy industry). Note that grains are further defined as whole grains, protein is now healthy protein, and water is emphasized over dairy/milk. What other differences do you see?
This table provides more detail on how The Healthy Eating plate compares to USDA’s MyPlate.
Healthy eating also includes choosing organic fruits and vegetables when possible. By choosing organic, you help lower the amount of toxins your body encounters (since conventional fruits and vegetables are often sprayed with pesticides). Organic foods may not be readily available on your campus or in your local grocery store, so strive to choose the best options possible given availability and your budget. Many college and universities are adding organic food as a result of student demand. If healthy eating is something you are passionate about, consider organizing an effort to influence the dining options on your campus. When shopping on your own, the Dirty Dozen list provided by the Environmental Working Group (EWG) is a good guide of which produce is most important to eat organic, as these are the fruits and vegetables with the most pesticide residue. The EWG also compiles a Clean 15 list of the vegetables and fruits with the least amount of pesticides.

### Whole Foods vs. Processed Foods

Choose whole foods. Whole foods are any foods that have not been processed, packaged, or altered in any way. Whole foods are an essential part of a healthy diet because they contain the vitamins and minerals our bodies need.
Examples of whole foods include the following:
1. Vegetables: Carrots, broccoli, kale, avocados, cauliflower, spinach, peppers
2. Fruits: Apples, bananas, blueberries, strawberries, grapes, melons, peaches
3. Grains: Brown rice, oatmeal, barley, buckwheat, quinoa, millet
4. Beans: Black, pinto, kidney, black-eyed peas, chickpeas
Minimize non-whole foods. These are foods that have been processed, such as cookies, hot dogs, chips, pasta, deli meat, and ice cream. Even seemingly healthy foods like yogurt, granola, and protein bars are processed and should be checked for added sugar and other unhealthy ingredients.
The average American eats 62 percent of their daily calories from processed foods.Dr. Joel Furhman https://www.mensjournal.com/features/joel-fuhrman-the-doctor-is-out-there-20121107/ In order for your body to be as healthy as possible, it’s extremely important to include lots of whole foods in your diet.

### How to Read a Food Label

The U.S. government requires food manufacturers to put a label on every processed food product. This is so we, as consumers, know what we are putting into our bodies and can make good dietary choices. A quick review of the label will provide a lot of important information about what you are eating, yet most people don’t take the time to read the label. This is a big mistake.
Think of the front of the package as a marketing billboard. Don’t be fooled by the marketing. Every day millions of dollars are spent to persuade us to eat foods that are not healthy for us. Through visuals (like the strawberry on the bottle of dressing below) and words (like natural, healthy, or gluten free), the food industry wants us to make assumptions about the nature of a food product without looking at the facts. For example, many people eat protein bars thinking they are a healthy choice, but protein bars can have up to 30 grams of sugar! Understanding the nutrition information and ingredients will help you make healthier choices. When you take the time to read the labeled ingredients, you are no longer being marketed to—you are staring at the facts.
Look at the label on the back of what appears to be a healthy item: fruit salad or fruit cocktail. One of the first things to look for is the amount of sugar. 12 grams equals just under 2.5 teaspoons. The serving size indicated is 2/3 cups, so if you have double that amount, it’s the equivalent of spooning out 5 teaspoons of sugar. The lower the sugar the better.
It’s also important to avoid high amounts of sodium, to minimize saturated fats, and to avoid all trans fats. Trans fats are unhealthy substances made through the process of solidifying liquid oils to increase the shelf life of foods. Also called partially hydrogenated oil, trans fats are often found in margarine, microwave popcorn, crackers, cookies, and frozen pizza. Saturated fat usually comes from animal products like butter and meat fat. Saturated fat tends to raise the level of cholesterol in the blood, and while some is OK, moderation is best.
Dietary fiber is a good thing; the higher the number the better. Fiber has virtually no calories, but it holds water in your stomach, makes you feel full, and helps with digestion. Vitamins are very important. Aim to get to 100 percent of your recommended daily value through the food you eat throughout the day.
Next, look at the ingredient list that can be found at the bottom of the nutrition label. A long list of ingredients likely contains fillers and preservatives you should avoid. If you can’t pronounce an ingredient, you can generally assume it is not a healthy option. And it’s not only what you eat, it’s what you don’t eat. As a rule, the fewer the ingredients, the better.
This video on how to read a food label is a helpful overview on what else to look for.
You can also download the Fooducate app, which allows you to scan the bar code of any food item and quickly see a report card and suggestions for healthier alternatives.

### What You Drink

What is your go-to drink when you are thirsty? Soda? Juice? Coffee? How about water? Most of your blood and every cell in your body is composed of water. In fact, water makes up 60 to 80 percent of our entire body mass, so when we don’t consume enough water, all kinds of complications can occur. To function properly, all the cells and organs in our body need water. Proper hydration is key to overall health and well-being. By the time you feel thirsty, you are already dehydrated. Dehydration is when your body does not have as much water and fluids as it needs. Researchers at Virginia Polytechnic discovered that mild dehydration (as little as losing 1 to 2 percent of body water) can impair cognitive performance.University of Virginia https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4207053/ Water increases energy and relieves fatigue, helps maintain weight, flushes toxins, improves skin complexion, improves digestion, and is a natural headache remedy (your brain is 76 percent water). Headaches, migraines, and back pains are commonly caused by dehydration. Your body will also let you know it needs water by messaging through muscle cramps, achy joints, constipation, dry skin, and of course a dry mouth.
Aside from feeling thirsty, the easiest way to tell if you are dehydrated is to check your urine. If it is a dark shade of yellow, your urine is over-concentrated with waste. This happens because water helps flush out waste and when you’re hydrated there’s a higher ratio of water to waste, turning your urine a lighter color.
One of the best habits you can develop is to drink a large glass of water first thing in the morning. Your body becomes a little dehydrated as you sleep. Drinking water first thing in the morning allows your body to rehydrate, which helps with digestion and helps move the bowels for regularity in the morning. It also helps to eliminate the toxins your liver processed while you slept.
Check out this video for more benefits of drinking water.
Staying hydrated is important to keep your body healthy, energized, and running properly. As a general guideline, aim to drink eight glasses of water a day, although a more helpful guide is to drink half your body weight in ounces (for example, if you weigh 150 lb, try to drink 75 oz of water a day). One of the best ways to remind yourself to drink throughout the day is to buy a reusable bottle and bring it everywhere you go. There are two reasons to use a refillable water bottle instead of a plastic bottle:
1. Your own health. Most plastic water bottles have a chemical called bisphenol A (BPA), which is added to plastics to make them more durable and pliable. BPA is known to disrupt hormones and has been linked to sperm dysfunction.
2. The health of the planet. Do you know that every time you drink from a plastic water bottle and casually toss it in the trash, it can stay on the planet approximately 450 years?https://www.telegraph.co.uk/news/2018/01/10/stark-truth-long-plastic-footprint-will-last-planet/ Even when you recycle, the complex nature of recycling doesn’t guarantee your plastic bottle will make it through the process. Americans purchase about 50 billion water bottles per year, averaging 13 bottles a month for each of us. By using a reusable water bottle, you can save an average of 156 plastic bottles annually.https://www.earthday.org/2018/03/29/fact-sheet-single-use-plastics/#_ftn5
“But I don’t like the taste of water!” It may take time, but eventually you will. Add a little more each day, and eventually your body will feel so fantastic fully hydrated that you will have water cravings. In the meantime, you can visit the dining hall in the morning and add lemon, lime, berries, watermelon, cucumbers, or whatever taste you enjoy that will add a little healthy flavor to the water.
While water is undeniably the healthiest beverage you can drink, it is unrealistic to assume that is all you will drink. Be careful to minimize your soda intake, as most sodas are loaded with sugar or artificial sweeteners (which can be even worse than sugar). And unless you are squeezing your own fruit juice, you are also likely drinking a lot of sugar. Many fruit juices sold in supermarkets contain only a small percentage of real fruit juice, and have added sugar and other unhealthy sweeteners like high-fructose corn syrup. A 12-oz glass of orange juice can contain up to 9 teaspoons of sugar, about the same as a 12-oz can of Coke! Hot or cold herbal teas are a wonderful addition to your diet.

### Exercise

Many people exercise to maintain or lose weight, or increase cardiovascular health, but physical outcomes are only one potential benefit of exercise. Regular exercise can improve the quality of your sleep, strengthen your bones, increase your energy levels, and reduce your risk of high blood pressure, diabetes, and even some forms of cancer.Harvard Medical School https://www.health.harvard.edu/newsletter_article/Exercise_as_medicine Regular exercise is key to living a long, healthy life.
There are three basic types of exercise—flexibility, strength training, and cardiovascular.
1. Flexibility is the range in motion of the joints in your body, or the ability for your muscles to move freely. Without adequate flexibility, daily activities can become difficult to do. Stretching increases your body’s flexibility, improves circulation, and sends more blood to your muscles. Just a few minutes a day of deep stretching can have a powerfully positive impact on your health. Yoga and Tai Chi are other wonderful ways to improve your flexibility.
2. Strength is the body’s ability to produce force. Strength training helps improve muscle strength and muscle mass, which will become increasingly important as you age. Increased muscle helps your body burn calories more efficiently. Strength training also helps maintain bone strength. In addition to lifting weights, other ways to build strength include push-ups, pull-ups, squats, lunges, and yoga.
3. Cardiovascular is the body’s ability to use oxygen efficiently during exercise. As one’s ability to use oxygen improves, daily activities can be performed with less fatigue. Great cardiovascular modes of exercise include jogging, swimming, biking, and HIIT (high intensity interval training). HIIT is short bursts of intense activity followed by a rest period. With HIIT, you can squeeze a lot of benefit into a short period of time. Click here for an example of HITT workouts.

Research indicates that regular aerobic exercise can support memory and cognition. In these studies, aerobic exercise generally increases the number of new neurons created in the brain’s memory center and also reduces inflammation.Kelty,  Journal of Applied Physiology  Inflammation in the brain may contribute to the development of dementia and other neurodegenerative conditions. It might be good timing to take a jog before you sit down to study for a test!
It’s important to move throughout the day, and every day. Aim to exercise for 150 minutes a week. You don’t have to be the king or queen of CrossFit; it’s the daily movement that is most important. While it is best to integrate all three types of exercise, the best exercise is the one you will actually do. Find and commit to a form of exercise you will enjoy.

### Toxins

We live in an increasingly toxic world. Since the Industrial Revolution, we have released thousands of man-made chemicals into the environment. These chemical toxins are in our food (pesticides, conventional fertilizers), in food packaging, in household products, and in our personal care products. Many of these chemicals have been linked to infertility, asthma, migraines, ADHD, and cancer.
The complicated thing about these chemicals is that their effects can take years or even decades to appear. The chemicals build up over time and they interact with each other,which can result in problems that are not considered by “single chemical” testing (which is the majority of the limited testing that is done).
Now the good news—there are simple things you can do right now to limit the amount of toxins in your environment. First, it is best to avoid any products with “artificial colors” or “fragrance.”
1. Artificial colors: Synthetic dyes like Yellow 10, Blue 1, and Red 28 may contain carcinogens and neurotoxins and can be absorbed by your skin and go directly into your bloodstream.
2. Fragrance: Have you ever walked down the cleaning and laundry soap aisle and been assaulted by so many fragrances you couldn’t get to the next aisle fast enough? Claiming trade secrets, companies don’t have to tell us what’s in “fragrance,” which can include highly toxic ingredients, hormone disruptors, and carcinogens. Fragranced products come in the form of soaps, cleaners, air fresheners, hand sanitizers, laundry detergents, and personal care products. Studies have repeatedly shown that the synthetic fragrances and other toxic chemicals included in these products are causing a range of health problems.https://www.ewg.org/
There is a long and ever-growing list of common chemicals to avoid, but it’s hard to remember the names when you are shopping. That’s where a handy app like Healthy Living from the EWG comes in.
Simply scan the bar code of any products you use and learn about any potential health hazards.
Your skin is your largest organ, and in seconds will absorb what you put on it. It’s important to be wary of conventional skin care products that could potentially leak toxins into your body. Think of your skin as one giant mouth. If you wouldn’t eat the ingredients in your products, think twice before applying them to your skin.


# Engaging in a Healthy Lifestyle

## Sleep

Questions to Consider:
1. How much sleep is enough?
2. What are the impacts of sleep deprivation?
3. Which strategies and support can enhance sleep?
How often do you wake up filled with energy, eager to embrace the day? How often do you wake up still tired, with heavy eyes that just don’t want to open? Your answer to these questions has a direct bearing on the quality of your decisions, your ability to use good judgement, the extent to which you can focus in the classroom, and ultimately your long-term health.
A great night’s sleep begins the minute you wake up. The choices you make throughout the day impact how quickly you fall asleep, whether you sleep soundly, and whether your body is able to successfully complete the cycle of critical functions that only happen while you sleep.
Sleep is the foundation of amazing health, yet almost 40 percent of adults struggle to get enough sleep.https://news.gallup.com/poll/166553/less-recommended-amount-sleep.aspx Lack of sleep affects mental and physical performance and can make you more irritable. The diminished energy that results from too little sleep often leads us to make poor decisions about most things, including food. Think about the last time you were really tired. Did you crave pizza, donuts, and fries—or a healthy salad? Studies have shown that people who sleep less are more likely to eat fewer vegetables and eat more fats and refined carbohydrates, like donuts.Cleveland Clinic, https://health.clevelandclinic.org/lack-sleep-make-crave-junk-food/
With sufficient sleep it is easier to learn, to remember what you learned, and to have the necessary energy to make the most of your college experience. Without sufficient sleep it is harder to learn, to remember what you learned, and to have the energy to make the most of your college experience. It’s that simple.

### What Happens When We Sleep?

Sleep is a time when our bodies are quite busy repairing and detoxifying. While we sleep we fix damaged tissue, toxins are processed and eliminated, hormones essential for growth and appetite control are released and restocked, and energy is restored. Sleep is essential for a healthy immune system. How many colds do you catch a year? How often do you get the flu? If you are often sick, you do not have a healthy immune system, and sleep deprivation may be a key culprit.
A review of hundreds of sleep studies concluded that most adults need around eight hours of sleep to maintain good health. Some people may be able to function quite well on seven and others may need closer to nine, but as a general rule, most people need a solid eight hours of sleep each night. And when it comes to sleep, both quantity and quality are important.
When sleep is cut short, the body doesn’t have time to complete all the phases needed for the repair and detoxification.
A tiny lobe called the pineal gland helps us fall asleep. The pineal gland secretes melatonin to calm the brain. The pineal gland responds to darkness. If you are watching TV until the minute you go to bed and then sleep with the artificial light from smartphones and other devices, your brain is tricked into thinking it is still daylight; this makes it difficult for the pineal gland to do its job. In addition, if the TV shows you watch before bed are violent or action-packed, your body will release cortisol (the stress hormone). Anything that creates stress close to bedtime will make it more difficult to fall asleep. A bedtime practice of quiet activities like reading, journaling, listening to music, or meditation will make it much easier to fall asleep.

### What Happens If You Don’t Get Enough Sleep?

Lack of sleep has a big impact on your overall state of health and well-being. Studies have linked poor sleep to a variety of health problems. The U.S. Centers for Disease Control and Prevention have identified sleep deprivation as a public health epidemic.
A lack of sleep can change the way your genes express themselves. One notable study involved a group of healthy adults limited to six hours of sleep for one week. Researchers then measured the change in gene activity compared to the prior week when these same people were getting a full eight hours of sleep a night. The lack of sleep caused the activity of 711 genes to become distorted. About half of the genes were switched off by a lack of sleep, and these genes were associated with the immune system. The other half of the genes experienced increased activity from a lack of sleep, and these were genes associated with the promotion of tumors, genes associated with long-term chronic inflammation, and stress genes.Archer, https://www.ncbi.nlm.nih.gov/pubmed/23440187
Some of the health risks of insufficient sleep include the following:
Increased risk of heart attack and stroke: In his book Why We Sleep, Matthew Walker, PhD, shares Japanese research showing that male workers who average six hours of sleep or less are 400 to 500 percent more likely to suffer one or more cardiac arrests than those getting more than six hours of sleep each night. Another study of women between the ages of 20 and 79 found that those who had mild sleep disturbance such as taking longer to fall asleep or waking up one or more times during the night were significantly more likely to have high blood pressure than those who fell asleep quickly and slept soundly.Matthew Walker, PhD
Impaired cognitive function: Even one night of sleeping less than six hours can impact your ability to think clearly the next day.
Increased risk of accidents: Sleep deprivation slows your reaction time, which increases your risk of accidents. You are three times more likely to be in a car crash if you are tired. According to the American Sleep Foundation, 40 percent of people admitted to falling asleep behind the wheel at least once. A Governor’s Highway Safety Association report estimates there are 6,400 fatal drowsy driving crashes each year. Fifty percent of these crashes involve drivers under the age of 25.Governors Highway Safety Association
Driving after 20 hours without sleep is the equivalent of driving with a blood-alcohol concentration of 0.08 percent—the U.S. legal limit for drunk driving.
Weight gain/increased risk for obesity: Sleep helps balance your appetite by regulating hormones that play a role in helping you feel full after a meal. Also, cortisol is released during times of anxiety, and exhaustion causes your body to produce more cortisol. This can stimulate your appetite.
Increased risk of cancer: Tumors grow up to three times faster in laboratory animals with severe sleep dysfunctions. Researchers believe this is because of disrupted melatonin production, as melatonin has both antioxidant and anticancer activity.
Increased emotional intensity: The part of the brain responsible for emotional reactions, your amygdala, can be 60 percent more reactive when you've slept poorly, resulting in increased emotional intensity.
For more information on the advantages and health risks of sleep watch this TED Talk by Matt Walker, PhD, Director of the Sleep Center at U California Berkeley.

### Tips to Improve the Quality of Your Sleep

Now that you are more aware of the ways insufficient sleep harms your body, let’s review some of the things you can do to enhance your sleep.
Make sleep a priority.
It can be challenging in college, but try to get on a schedule where you sleep and wake at the same time every day to get your body accustomed to a routine. This will help your body get into a sleep rhythm and make it easier to fall asleep and get up in the morning.
Sleep in a cool, quiet, dark room.
Create a sleeping environment that is comfortable and conducive to sleep. If you can control the temperature in your room, keep it cool in the evening. Scientists believe a cool bedroom (around 65 degrees) may be best for sleep, since it mimics our body's natural temperature drop. Exposure to bright light suppresses our body’s ability to make melatonin, so keep the room as dark as possible. A 2010 study in The Journal of Clinical Endocrinology & Metabolism found that individuals exposed to room light “during the usual hours of sleep suppressed melatonin by greater than 50%.”JCEM, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3047226/ Even the tiniest bit of light in the room (like from a clock radio LCD screen) can disrupt your internal clock and your production of melatonin, which will interfere with your sleep. A sleep mask may help eliminate light, and earplugs can help reduce noise.
Avoid eating late or drinking alcohol or caffeine close to bedtime.
It is best to finish eating at least two hours before bedtime and avoid caffeine after lunch. While not everyone is affected in the same way, caffeine hangs around a long time in most bodies. Although alcohol will make you drowsy, the effect is short-lived and you will often wake up several hours later, unable to fall back to sleep. Alcohol can also keep you from entering the deeper stages of sleep, where your body does most of the repair and healing. A 2013 Scientific Research study concluded that “energy drinks, other caffeinated beverages and alcoholic beverages are risk factors of poor sleep quality.” It’s important to finish eating hours before bedtime so your body is able to heal and detoxify and it is not spending the first few hours of sleep digesting a heavy meal.
Start to wind down an hour before bed.
There are great apps to help with relaxation, stress release, and falling asleep. Or you can simply practice 4-7-8 breathing to calm your nervous system—breathe in to the count of 4, hold your breath for a count of 7, and release your breath slowly to the count of 8.
Consider the Insight Timer app, or any of the free apps listed by the American Sleep Association.
Exercise for 30 minutes a day.
One of the biggest benefits of exercise is its effect on sleep. A study from Stanford University found that 16 weeks in a moderate-intensity exercise program allowed people to fall asleep about 15 minutes faster and sleep about 45 minutes longer. Walking, yoga, swimming, strength training, jumping rope—whatever it is, find an exercise you like and make sure to move your body every day.
Improve your diet.
Low fiber and high saturated fat and sugar intake is associated with lighter, less restorative sleep with more wake time during the night. Processed food full of chemicals will make your body work extra hard during the night to remove the toxins and leave less time for healing and repair.
Sleep affects how we look, feel, and function on a daily basis and is vital to our health and quality of life. When you get the sleep your body needs, you look more vibrant, you feel more vibrant, and you have the energy to live your best life.
Now, with a better understanding of the benefits of getting the recommended hours of nightly sleep and the health risks of not getting enough sleep, what changes can you make to improve the quality and quantity of your sleep?

### What If I’m Doing All These Things and I Still Have Trouble Sleeping?

People that have trouble falling asleep also often have low magnesium levels (sources suggest that over half of the adults in the United States are magnesium deficient). You can ask your doctor to check your magnesium levels, but you can also focus on eating magnesium-rich foods to help. One of the best magnesium-rich snacks is pumpkin seeds. Other great sources are almonds, sesame seeds, and walnuts.
Difficulty sleeping may be a sign that you have a clinical sleep problem, such as insomnia or sleep apnea. If you are doing all the right things and still have trouble falling or staying asleep, talk to your doctor.
These are some resources for insomnia:
1. Healthy Sleep, Harvard Medical School Division of Sleep Medicine
2. Insomnia Treatment, American Association of Sleep Medicine
3. Sleep Medicine, Society of Behavioral Sleep Medicine