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My Current Financial Situation/Introduction: I am currently an international college student who works part-time and I share an apartment with a good friend. I make $620 a week and have to pay $500 for my half of the rent once a month. I understand that my financial future is dependent on the type of job that I receive once I complete college. In fact, the job I receive after college is important on several levels. The first is that if I am unable to find a full-time job after graduation, but the job I am currently working in will still have me-then in order to pay my rent and bills I have to stay with that job even though its not a great deal of money. Another reason the type of job I get after college is important is because I want to work in real estate which is a job that is dependent on commission and is not as steady as the typical 9-5. At the same time, it has the potential to be very lucrative for me in the long run and would allow me to not only have money to spend on necessities-I will also have money to spend on (for lack of a better term) rewarding myself with more trivial, superfluous items and experiences like clothing and vacations. There is also the chance that I will end up with a 9-5, which will help me in terms of paying for the necessities like rent and bills that I mentioned above.

The above discussion is essentially about my future. Right now my financial situation is on solid ground (for reasons to be discussed below) in that I am able to attend school while at the same time living relatively independently (i.e.: I dont live with my parents). The goal is for my financial status to improve as I get older and this discussion is instructive to that end. With that said I do have some expenses that I have to worry about even though school is still a priority over making enough money to meet those financial obligation, in other words I would choose school over work if I had to make that choice and find another way to live regularly. Luckily I am not in a situation where that decision has to be made.

Because I am living with a roommate, I do have several obligations that I have to fulfill. Besides rent, I also have to pay a $100 cell phone bill every month. I also have to contribute $100 to the electric bill and the cable bill per month. As noted I make $620 a week after taxes so I make $2,480 a month. With that in mind, I am able to contribute $700 to necessities and still have thousands of dollars remaining. One of the biggest positives of my financial situation at the moment is that I dont have a credit card. There are negatives to not having a credit card that will be discussed below-but when looking at having money to spend on myself or having money in the case of emergency (ex: my roommate cant make the rent or cant pay his portion of the bills in a given month)-it is a positive that I dont any debt.

My long term financial goal is focused on buying a house. Because I live in New York and plan on staying here long term, I dont think that having a car is necessary so I would only be interested in one if it wouldnt affect my ability to pay for necessities or even less important items that I happen to desire. Being in a steady enough position to pay for life insurance is something else that is very important to me because I plan on having children and I want them to be safe in the event something happens to me. Investing my money in order to facilitate long-term financial security is not something I am necessarily interested in as much as it is something that I want to research in the event that it makes sense for me in the future. Notwithstanding the specific and potential goals that I have going forward, it is important to look at all possibilities when it comes to my financial goals now, after college and well into my professional career.

Banking: Currently I have a checking account. I use Chase bank. Based on the Chase bank website, there are no interest rates on checking accounts. If I decided to create a savings account Chase would pay out 0.05 APY (Chase Bank, 2015). It should be noted that Chase does automatically take $5 from my checking account to put into my savings once a month. A certificate of deposit (CD) from Chase would mean that I would have a predictable and steady rate of return which would be a positive as I begin the process of hopefully purchasing a home. I can purchase a CD that is viable for a little as one month or as long as 120 months (10 years). There is also an opportunity for greater interest rates in comparison to savings accounts, with that opportunity also comes a punishment for early withdrawal. When considering my bank account (which is in between $0-$9,999), I can get (for instance) a 15 percent interest rate benefit for keeping the money in the CD for as little as 18 months. If I decided to keep it for 10 years, I can have a 90 percent interest rate benefit (my CD plan will be discussed in the my financial plan section) (Chase Bank, 2015).

One of the biggest benefits to purchasing a CD is how easy it is. The CD can be funded with the money from my savings or my checking account as long as I have a minimum of $1,000. Chase Bank also provides FDIC insurance protection for CDs just like it does for savings accounts. In other words, my CD purchase would be insured and that insurance is automatic (Chase Bank, 2015).

When it comes to the idea of banking in general, it is always important to for a person to have some sort of plan with his or her money. As Bank of America (2015) says one of the most important questions that a person has to ask about their finances is how to make sure the money they keep is more than the money that they spend. Chase Bank gives me options (if I choose) that will allow me the opportunity to keep more money than I spend. One of the most important aspects of beginning the banking process is deciding what I want in the long-term and how proper banking can help me make that purchase. In other words, if I want to buy a car or a house-how much money do I need to make sure that I have if I want to make that purchase or purchases within a certain time frame?

Credit Cards: I currently dont have any credit cards even though I dont owe anything on my last one because I settled on the account. While I have the ability to pay off my credit card bills right now, I dont want to be in the situation that I was just in where I ended up having to pay $1,000 to settle a credit card debt. Its not worth it to me as it stands right now. There are positives and negatives to my decision, but my decision is based on my recent history (discussed above).

One way to look at my situation is to look at the advantages and disadvantages of credit cards in juxtaposition to not only my current financial situation, but also my history and general mentality when it comes to how credit cards have and could affect my life. The advantages of having a credit card include: convenience, record keeping, low-cost loans, instant cash, perks, building positive credit, purchase protection, and balance surfing (depending on the credit card company) (360 Financial Literacy, 2015). When analyzing the advantages, the convenience of a credit card is counteracted by the fact that I have a debit card from Chase. I dont need a credit card for record keeping because I have my Chase debit card and Chase in general to help with that (they have both electronic and mailed/printed records that I can keep). Instant cash is also something else that a credit card has which is negated by my Chase debit card. The biggest thing that I am missing from not getting a credit card is the ability to establish good credit for the future. As I will discuss in the my financial plan section, my decision not to apply for a credit card is temporary because I do want to establish positive credit going forward.

The negatives of having a credit card include: overuse, paperwork, high-cost fees, unexpected fees, more debt, and homework (360 Financial Literacy, 2015). All of the above are reasons that I am not interested in credit cards, especially because I know from experience how all of the negatives mentioned above can compromise my credit. For instance, when I got my first credit card, I was prone to overusing it without considering the high interest rates that come with its use. Unexpected fees was certainly a problem because I was so excited about free money that I didnt think about what would happen when I got cash advances in that those advanced carried with them a significant percentage fee. One could argue that I could do my homework on every aspect of having a credit card, but the problem with that is I work and go to school-both take up a tremendous amount of my time. I dont have any interest in keeping track of whether or not I made a purchase that I am being charged for or reading the fine print when it comes to interest rates. At this stage in my life, having a credit card is not worth the negatives.

Insurance: The two most important types of insurance that I am going to need are health insurance and life insurance. Car insurance is going to be necessary if I buy a car, but the fact is even though I will discuss buying a car below-I am really not interested in having one for many reasons. Home insurance when the time comes is also important, but not as important as health insurance or life insurance. I hope to work in a job that has health insurance so that I dont have to worry about that, which leaves life insurance. One thing that is important to note is that I seriously considered applying for life insurance this year, except I didnt want to pay the premiums when I am only working part-time and I want to see what type of job I receive upon graduation before making that type of commitment.

There are three major types of life insurance: term, whole life and universal. The advantages of term life insurance are that it provides maximum coverage per premium money and it meets coverage needs for 30 years. The disadvantages are that there are no savings features and there is no lifetime coverage (duke.edu, 2015). The problem with term life insurance is that it is not something that I can think about right now. In other words, if I was married and had children I would seriously consider term life insurance even though I am young because of it does provide maximum coverage. Term coverage is something makes more sense for me if I was 40 years old because the 30 year coverage would make more sense. Whole life coverage provides fixed premiums, tax-deferred cash and lifetime coverage. On the other hand fixed premiums mean inflexible premiums, there is also a lower rate of return and there are surrender charges. Universal coverage provides life time coverage, flexible premiums, flexible death benefit, and pricing based on current-interest rate assumptions. On the negative side, universal coverage could lead to less than adequate coverage if the interest rates decline and the premiums may rise of the interest rates decline (duke.edu, 2015). There are positives and negatives to all three types of life insurance coverage; my inclination is to go with universal coverage because it has more positives beyond it being lifetime coverage.

Buying a Car: Even though I am not interested in buying a car mostly because I live in New York which means that public transportation is a viable option and because I dont want to deal with the paperwork and bureaucracy that comes with having a car, one of the other reasons that I am not interested goes to the fact that a car is not an investment. Indeed, a car is a depreciating asset (duke.edu, 2015). As we have discussed in this very class, a car loses value over time. Cars and trucks (on average) lose more than 20 percent of their value within the first year which makes them more difficult to sell (duke.edu, 2015).

According to Jordan Perch (of DMV.com), someone should buy a car when he or she has the money to do so. In fact, Perch believes that it is better that someone outright buy a car if he or she has the money because it helps avoid interest rates and finance fees. Moreover, it is easier to sell a car that is brought (Eddington, 2015). The issue with buying a car outright is that many people dont have the money to buy the car that they want without the assistance that comes with financing . With that in mind, the option that most people take when buying a car is financing. One BMW dealer in Houston Texas said that 90 percent of customers take the financing option. The reason that the financing option is so attractive is because the short-term costs are low, the down payment of the car is just 20 percent of the cars price and the monthly payments are relatively inexpensive (Eddington, 2015). The problem with financing is that the long-term expenses are going to end up being more than the car is worth because of the interest rates. The decision between financing and purchasing should be based on how often the car is used in that the more the car is used the more appropriate a purchase would be (Eddington, 2015). Perch says that a person should lease a car if he or she (or they if it is a group decision) plans on keeping a car for a few years. Perchs advice is based on the idea that people can keep their savings and have a new car every few years. Other advantages of leasing include: lower down payment, lower monthly payments (in comparison to financing) and lower repair costs because leased cars are under warranty which means that the cost for just about all of the repairs are covered. The negative is that a leased car cannot be sold after the leasing period is over. Matt DeLorenzo, who is the managing editor for kbb.com, says that a car should only be leased if the driver or drivers only plan on traveling less than 12,000 miles a year (Eddington, 2015).

For my situation, I believe that leasing is better because (again) I live in New York and I would only be driving on special occasions for the most part. Moreover, leasing would give me the opportunity to see how I enjoy driving a car. I could end up in a situation where I continue to lease every three or four years. I also believe that purchasing a car is also a viable option if I am lucky enough to have the money to do so. I am not in a situation right now where I can purchase a car, but if my prospective real estate career is successful-then I would consider buying a car which would also give me the potential to sell it if the situation presents itself.

Buying a House: According to CNN (2015), there are 10 important components to buying a home: having good credit, setting a budget, having the cash for a down payment and closing costs, finding an agent, searching for a home, making an offer, entering a contract, securing a loan, getting an inspection and closing the deal. One of the reasons why I do need to get another credit card is that it will help me establish the credit necessary to make me an attractive homebuyer. As I have noted throughout this discussion, it is important that I save money because when it is time for me to purchase my house I would like to have that money available (it actually goes to the above discussion regarding purchasing CDs from Chase bank). As far as finding an agent goes, that is very important because there is a difference between an agent that works for the seller and an agent that would work for me. I need to find an agent that would work for me.

On the subject of assistance, just about everyone who buys a house (especially first time buyers) needs help in some form or fashion-both in terms of financial support to make the down payment and information that would help the potential buyer make the right decision. New York City has many resources that can help first-time home buyers in both ways. The City of New York website has a tutorial on home purchasing. Moreover, each borough has several organizations that can help with the actual financing. For instance, the HPDs HomeFirst Down Payment Assistance Program gives qualified homebuyers up $15,000 that they could use towards the down payment of a car. On a federal level, there are multiple entities that can help with home purchasing, including the Federal Housing Administration (Housing and Urban Development, 2015). The key from my perspective is to make sure that I have the requirements necessary in order to receive the help that either or both the state and federal government can give me.

With all of the above in mind, from my perspective buying a house is certainly a long-term goal. I am not in a position financially to provide the assisting entities the funds needed to be qualified to buy a house. Moreover, personally speaking while I want to buy a house in 10 years, I also want to have a family in 10 years. I am not interested in buying a house if I am the only person living in it. I do have to make plans for buying a house now so it will be easier in the future. At the same time, it is difficult for that to be at the forefront of my mind, when I dont have a family. In later discussion, I will write about what I can do now to prepare myself for buying a house in 7-10 years.

Investing: The major difference between saving and investing goes to why I am more interested in the former than the latter. Saving money is safe because it goes into checking accounts, savings accounts and CDs which are protected by banks. There is also potential for insurance from the FDIC. The problem with saving is that the money doesnt grow at a quick rate. On the other hand, investing means that there is less security and I could lose my money. The positive is that my money could potentially grow in a way that saving money does not allow (Sec.gov,).

Bonds are the safest types of investments. At the same time, they are just like savings accounts and CDs in that there are little in the way of rewards because there is less risk. When it comes to stocks, holding a stock in a company is akin to part-ownership in the company. It would be instructive for stockholders to make sure they know what is going on in the company to see if they can get a return on their investment. Stocks have a greater risk of losing money, but there is also a greater potential reward. A mutual fund is a combination of stocks and bonds in which the investor pools his or her money with other investors and then the group pays a professional manager to choose specific securities. The key to mutual funds is that they are created with a specific strategy. Moreover, that specific strategy can be anything from large stocks to small stocks to bonds from government to bonds from companies to stocks and bonds. There is a big negative to mutual funds which is that the cost compromise the return which means that most mutual funds bring have a sub-par performance (investopedia.con, 2015).

My financial Plan/Conclusion: It is difficult to come up with a concrete plan because I dont have a full-time job and any long-term plan starts with me having a job that provides a certain income per year (>$50,000). With that in mind, I will say that even if I stay with the job that I have now and continue to live in with my roommate I can save money for a year and then invest my savings (hopefully $3,000 by the end of the year) into a CD where within 7-10 years, I can earn 15 percent back. If I have a family at the time then we can consider buying a house (after probably living in an apartment for a time). It is extremely important for me to curtail my frivolous spending because I want to be able to save enough money to not only put enough into a CD-but for the return on that investment to be substantial so that I can make major purchases.

Another important aspect of buying a house is having strong credit. In the next year or two, I will apply for a credit card and unlike the last time I had a credit card, I will make certain (unless it becomes a binary choice between paying rent and paying off the credit card) that I can pay the bill so that I can better position myself for assistance which would facilitate my ability to buy a house. It should be noted that I would also expect assistance from my wife or partner once the time comes.

Two financial commitments that I will not make are investments or buying a car. I would only be interested in buying a car if I make six figures or more and am able to purchase the car. As far as investments go, I believe that it is better for me to use my bank to save money and to be more specific it would be better for me to purchase CDs then invest in a low-return bond or a high risk stock.

My financial future or anyones financial future is not determined in the moment. Indeed, it is determined years in advance (in the absence of Luck). I am making decisions now that hopefully will reap its rewards in 2025.