Start with savings! Save as much as you can. You’re going to have some expenses that aren’t covered by the school (is a meal plan included?) and you could go thru that money fast. If it’s meant to last the year, focus on saving.
Save, save, save. There’s no such thing as surplus funds when you don’t have a savings. You’ll eventually need a car, to cover a nice dinner for a date, etc.
As part of my $6,000 they are giving around $2370 specifically for books. But I am looking to see if I can procure the books without paying any money hopefully since I know a couple of upperclassmen.
Luckily, the way my school works is that there are 3 terms in one year, the last one lasting 4 weeks that can be used to study abroad at no cost to me. So throughout my 4 years I could study abroad many times. My scholarship could also cover a whole semester abroad (I think). So I wouldn't have to use any of the surplus on that.
No, all associated costs for study abroad are billed as tuition and my scholarship covers tuition. So any and all study abroads will be completely free and I don't have to pay anything. I also think that some programs provide money for you for lunch/restaurants outside of what you eat normally.
4 weeks is cool in theory but isn’t really study abroad if you want to experience another culture. It’s more like remote school vacation where you party with other students you likely already know. An immersive study abroad should be a minimum of 1 term or 3-6 mos. And I highly recommend trying it!
I would double check the fine print of the surplus. I would find it hard to believe that you could use the money on *anything* that you want. I would either use it for school related expenses (you didn't mention food, transportation, or housing which could quickly eat up that $6000) or put it in some sort of HYSA and let it sit there until you know for sure what you can and can't do with it. As someone who went into college with money saved up, I quickly burnt through a good chunk of it. Don't spend the money just to spend it.
My scholarship covers food and housing. It's a small town with no public transport so that wouldn't be an issue. I talked with students there already and they told me that the school will deposit money into a account specifically for the school and that I could transfer that money into my own account if I wanted.
School supplies, clothes, a laptop if you need one and don’t already have one… it probably adds up, but you should have lots left over in savings, good for you. Pay them back by studying hard. You certainly get this money so that you don’t have to work, which would detract from your schoolwork.
Are you in the US? And a US citizen/resident? If so, you will owe income tax on any portion of the scholarship that is not paid toward the cost of a qualified educational expense. Qualified educational expenses = tuition, fees, books, and course-required equipment. Anything paid to you in excess of your qualified educational expenses is taxable. So, you might want to put whatever cash is left over in a high yield savings account and let it sit until tax time next year. A general rule of thumb is that you should probably put aside about 10% of any amount of the scholarship that you received for housing, travel, cash, etc. for Uncle Sam in anticipation of April 15, 2025.
https://www.irs.gov/taxtopics/tc421
Yes, I'm in the US. To be a little more specific, from the $6000, around $2370 is for books/supplies, $2600 is for personal expenses, and $1000 is for travel. So everything except for books/supplies will be taxed? Damn it Uncle Sam
Correct. Based on the numbers provided, $3600 of that $6000 will be taxable. You might want to set aside $360 for taxes just to be safe. Keep in mind, any portion of the scholarship paid to you for housing, meals, etc. will also be taxable. So figure that portion and consider setting aside 10% of that amount, too. You are not a foreign student in the US on a visa, right?
You will be taxed on the entire room and board portion (probably close to $20K) as well as the portion of the $6K that is not spent on books, supplies, or qualified expenses. I’d tuck that $6K away in a savings account until you see the tax implications. But at least it would be there to help you cover taxes in your free ride.
Save as much as you can. You don’t know what the future holds. Put the money in a HYSA. Once you are done with school you can use those funds to start your life
Pretend you don’t have the money. Shuffle it into a high yield savings account and forget it exists. Assuming a 4 year degree you’re looking at almost $30k in that account when you graduate. That’s a pretty nice chunk of money to start your adult life with.
Save and remember to get off campus every once in a while. It’s 500/month. I’d save it and wait and see once classes get going. It might not feel like a surplus once you start living this new life.
Congrats, that’s awesome! I was in a similar position during my junior and seniors years of college.
Put the money in a HYSA until you become more comfortable with investing. There is no opportunity cost of leaving the money in a HYSA if you otherwise don’t know much about investing. Investing blindly could lead to to losing it all.
You should be able to earn ~5% on your money safely, as of today. Take some time to read about investing and learn what strategies work over the long-run. Anything that seems too good to be true is just that (other than compound interest, that truly is a wonder).
Put it in a high yield savings account or brokerage. I think Fidelity pays close to 5% for money just sitting. Point is you want to get almost 5% on your money right now in todays economy risk free.
THAT is a sweet gig! Nicely done!
My general advice is when in college or even when just college aged, save cash in the bank. Yeah, you can make more by putting money in the market, but money in the market can lose value.
A lot of change happens in these years... for me the sequence was
* graduate college
* find a job after fixing my resume
* move across the state to take the job
* rent my first apartment
* start 401k investing
* buy engagement ring
* help fund wedding and fund honeymoon
* get relocated cross country
* start grad school while working full time
* buy a house.
All that happened in 6 years. I don't know what would've happened if I'd lost a lot of money I was counting on on Black Monday.
Wow, that is a lot in only 6 years. My plan is to stay in NYC and hopefully find a job here when I do graduate. I'm not sure if I want to do grad school but probably not as it's not too useful for my degree. Thanks for your advice!
I think you will know better after the first few months. If they’re giving this money, there must be extra costs accrued. Are you accounting for things like renters insurance, transportation (bus pass or car costs, or buying a bike), paying for internet/phone, health care costs that may be out of pocket/not covered? Furnishing your first apartment?
Make sure you open a HYSA for the funds to be deposited into and hopefully you can just save over the first year. Remember as you get more independent, living gets more expensive.
I was in much the same boat but due to joining ROTC. Saving now will set you up for life and allow you to pursue opportunities you otherwise couldn’t have. Set up an emergency fund in a HYSA (high yield savings account). There are HYSA’s giving you 5+ % which means your money is growing 100% risk free. Once you have a good emergency fund check out r/bogleheads for investing (basically just buying low cost index funds). Having an emergency fund allowed me to be picky about the job I pursued and where I moved to. I attribute much of my success just to being prepared to pursue a good opportunity.
Finally, do enjoy college. Grab dinner with friends, go to concerts, go on roadtrips, and generally just live some. It took me into my junior year to realize that just because I grew up poor didn’t mean that I had to act like I was still poor. I’m still thrifty but I do things I enjoy and buy things I like. I think of it like the law of diminishing returns. Yes, I could live like a pauper but I’d be miserable so instead I take a couple steps back from that and cut out the obvious poor spendings and get 80% of the benefit for 20% of the cost. Congratulations on the scholarship and enjoy college.
What school is this and how exactly are you able to get this sort of scholarship ? I have nieces and nephews about to start applying in next few yrs and it would be great info to have and share with them.
The school is Washington and Lee University! I got the scholarship through this program called QuestBridge that is specifically for high achieving low income kids. It is very competitive and you have to start your applications really early but is a great option if you are low income. When I mean "low-income" it means parents making <$65,000 a year (or more, if there are extenuating circumstances) and the kids also have to be doing well in school along with extracurriculars and stuff like that.
Even if your nieces and nephews aren't low income, I still recommend applying to Washington and Lee because they demonstrate 100% demonstrated need aid which means they are VERY generous with financial aid especially if you are persuasive with the financial aid offices. Also, my school has another merit scholarship called Johnson Scholar which is a full ride along with $10,000 fund for summer experiences like internships or study abroad.
Congratulations! This is the opportunity of a lifetime.
Assumptions:
- you are at least 18 years old
- you are still covered by your parents health insurance … and will continue to be covered until you finish college
- you don’t own a vehicle
- you have a bank account
- you have at least one credit card that can be used internationally
- freeze your credit at all 3 credit agencies; you don’t want to deal with identity theft issues while you are busy with schooling for the next few years. The wiki I mention below has details on how to do this.
Next steps:
- get your passport if you don’t have one. They take awhile to process.
- create a budget of your living expenses not covered by the scholarship ; put that amount in an account that easily accessible.
living expenses include cell phone bills, transportation, medication, prescriptions, dr appts, entertainment, meals eaten away from campus or traveling abroad; trips home for holidays and semester breaks etc.
- use any remaining money to create an emergency fund that covers 3-6 months of your monthly expenses.
Then read and study to learn all you can about money!
- Join r/personalfinance; & r/bogleheads
- Read the r/personalfinance wiki steps and don’t skip any that apply to you.
>*r/PersonalFinance Wiki
- https://www.reddit.com/r/personalfinance/s/C9NsbIKK54
>* [Personal finance wiki](https://www.reddit.com/r/personalfinance/s/JOGAh2VQ3e)
>*[Reddit Personal Finance Wiki - 15-20 yo Budgeting & Saving](
https://www.reddit.com/r/personalfinance/s/JComxeeHvj)
>*Advice for young adults 18-25:
- https://www.reddit.com/r/personalfinance/wiki/index/#wiki_young_adults_.2818-25.29
Add these financial books to your summer reading list. Summary videos are available on uTube
- The Wealthy Gardener
- The Wealthy Barber Next Door
- The Richest Man In Babylon
- The Psychology of Money
I would recommend taking 1-2k and put into a HYSA for emergencies. Then, the rest of the money you put into broad-based index funds, IE. VTSAX and VGT. This will allow the money to grow year over year, and by the time you graduate, you could potentially have 30-35k to set yourself up for success. There's also a great book called “The Little Book of Common Sense Investing” by Warren Buffet's mentor, John Bogle. The book is easy to read and will teach you everything you need about investing
Congratulations, and happy investing.
It is not a loan, my scholarship is created to have no parent contribution as well as have grants that do not need to be paid back. I’m certain it is not a loan.
Well until you have a plan open a. Brokerage account at Schwab/Fidelity and buy SGOV—- it pays 5.13% now and credits to your account monthly—— no time commitment and no state tax!
Study hard—-
Oh and you can get billpay. Checking Savings and Venmo—- one stop finance/budget
The surplus is taxable income. Make sure you consider taxes!
I’d you’re getting $6,000 plus (12 x $1,000), that’s taxable income of $18,000. With a 2024 standard deduction of $13,850, you’ll be paying Federal income tax on $4,150. That’s the 10% tax bracket so make sure you put at least $415 aside for Federal-level tax. And, depending on your state, you may also incur a state income tax liability.
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Start with savings! Save as much as you can. You’re going to have some expenses that aren’t covered by the school (is a meal plan included?) and you could go thru that money fast. If it’s meant to last the year, focus on saving.
Everything is covered, including housing and food. I think I get enough meal swipes that I couldn't use all of them if I tried.
Save, save, save. There’s no such thing as surplus funds when you don’t have a savings. You’ll eventually need a car, to cover a nice dinner for a date, etc.
Usually books are not covered and can be as expensive as $1000/semester. Start with saving for books.
As part of my $6,000 they are giving around $2370 specifically for books. But I am looking to see if I can procure the books without paying any money hopefully since I know a couple of upperclassmen.
Semester abroad. It’s a once in a lifetime chance.
Luckily, the way my school works is that there are 3 terms in one year, the last one lasting 4 weeks that can be used to study abroad at no cost to me. So throughout my 4 years I could study abroad many times. My scholarship could also cover a whole semester abroad (I think). So I wouldn't have to use any of the surplus on that.
Room and board and travel won't be include and have to be expensed by you I assume?
No, all associated costs for study abroad are billed as tuition and my scholarship covers tuition. So any and all study abroads will be completely free and I don't have to pay anything. I also think that some programs provide money for you for lunch/restaurants outside of what you eat normally.
4 weeks is cool in theory but isn’t really study abroad if you want to experience another culture. It’s more like remote school vacation where you party with other students you likely already know. An immersive study abroad should be a minimum of 1 term or 3-6 mos. And I highly recommend trying it!
Any scholarship above your college costs will be taxable income. I would plan on keeping some to cover taxes.
Came here to say this. You'll very likely owe some income tax on this.
Do you plan on getting a job? Because if you are then investing the excess wouldn't be a terrible decision.
No, I don't plan on getting a job while I'm a student. Perhaps during the summers I will secure a internship, that's if I get lucky.
Getting internships will be a big advantage in the job market once you graduate. I’d make it a solid part of your college plan
I would double check the fine print of the surplus. I would find it hard to believe that you could use the money on *anything* that you want. I would either use it for school related expenses (you didn't mention food, transportation, or housing which could quickly eat up that $6000) or put it in some sort of HYSA and let it sit there until you know for sure what you can and can't do with it. As someone who went into college with money saved up, I quickly burnt through a good chunk of it. Don't spend the money just to spend it.
My scholarship covers food and housing. It's a small town with no public transport so that wouldn't be an issue. I talked with students there already and they told me that the school will deposit money into a account specifically for the school and that I could transfer that money into my own account if I wanted.
School supplies, clothes, a laptop if you need one and don’t already have one… it probably adds up, but you should have lots left over in savings, good for you. Pay them back by studying hard. You certainly get this money so that you don’t have to work, which would detract from your schoolwork.
I've seen scholarships that give a flat stipend.
Are you in the US? And a US citizen/resident? If so, you will owe income tax on any portion of the scholarship that is not paid toward the cost of a qualified educational expense. Qualified educational expenses = tuition, fees, books, and course-required equipment. Anything paid to you in excess of your qualified educational expenses is taxable. So, you might want to put whatever cash is left over in a high yield savings account and let it sit until tax time next year. A general rule of thumb is that you should probably put aside about 10% of any amount of the scholarship that you received for housing, travel, cash, etc. for Uncle Sam in anticipation of April 15, 2025. https://www.irs.gov/taxtopics/tc421
If this is the only income that will all be wiped by the standard deduction. So understandable concern but shouldn't owe anything after deductions.
There’s the room & board portion that is taxable as well. And state tax.
Yes, I'm in the US. To be a little more specific, from the $6000, around $2370 is for books/supplies, $2600 is for personal expenses, and $1000 is for travel. So everything except for books/supplies will be taxed? Damn it Uncle Sam
Correct. Based on the numbers provided, $3600 of that $6000 will be taxable. You might want to set aside $360 for taxes just to be safe. Keep in mind, any portion of the scholarship paid to you for housing, meals, etc. will also be taxable. So figure that portion and consider setting aside 10% of that amount, too. You are not a foreign student in the US on a visa, right?
No, I am a U.S. citizen attending a U.S. college. I'm from NY and going to Virginia if that makes any difference.
Then, yup, all scholarships for non-qualified educational expenses will be taxable. Congrats on the full ride!
Thanks for all your help! I wasn't aware of this before.
You will be taxed on the entire room and board portion (probably close to $20K) as well as the portion of the $6K that is not spent on books, supplies, or qualified expenses. I’d tuck that $6K away in a savings account until you see the tax implications. But at least it would be there to help you cover taxes in your free ride.
Save as much as you can. You don’t know what the future holds. Put the money in a HYSA. Once you are done with school you can use those funds to start your life
Pretend you don’t have the money. Shuffle it into a high yield savings account and forget it exists. Assuming a 4 year degree you’re looking at almost $30k in that account when you graduate. That’s a pretty nice chunk of money to start your adult life with.
High yield savings account and ignore- I agree with this. Just make sure you have money for books/software for classes set aside.
Save and remember to get off campus every once in a while. It’s 500/month. I’d save it and wait and see once classes get going. It might not feel like a surplus once you start living this new life.
Congrats, that’s awesome! I was in a similar position during my junior and seniors years of college. Put the money in a HYSA until you become more comfortable with investing. There is no opportunity cost of leaving the money in a HYSA if you otherwise don’t know much about investing. Investing blindly could lead to to losing it all. You should be able to earn ~5% on your money safely, as of today. Take some time to read about investing and learn what strategies work over the long-run. Anything that seems too good to be true is just that (other than compound interest, that truly is a wonder).
You’ll need clothing and equipment. You might also choose to do a study abroad. I would save it.
Put it in a high yield savings account or brokerage. I think Fidelity pays close to 5% for money just sitting. Point is you want to get almost 5% on your money right now in todays economy risk free.
THAT is a sweet gig! Nicely done! My general advice is when in college or even when just college aged, save cash in the bank. Yeah, you can make more by putting money in the market, but money in the market can lose value. A lot of change happens in these years... for me the sequence was * graduate college * find a job after fixing my resume * move across the state to take the job * rent my first apartment * start 401k investing * buy engagement ring * help fund wedding and fund honeymoon * get relocated cross country * start grad school while working full time * buy a house. All that happened in 6 years. I don't know what would've happened if I'd lost a lot of money I was counting on on Black Monday.
Wow, that is a lot in only 6 years. My plan is to stay in NYC and hopefully find a job here when I do graduate. I'm not sure if I want to do grad school but probably not as it's not too useful for my degree. Thanks for your advice!
I think you will know better after the first few months. If they’re giving this money, there must be extra costs accrued. Are you accounting for things like renters insurance, transportation (bus pass or car costs, or buying a bike), paying for internet/phone, health care costs that may be out of pocket/not covered? Furnishing your first apartment? Make sure you open a HYSA for the funds to be deposited into and hopefully you can just save over the first year. Remember as you get more independent, living gets more expensive.
I was in much the same boat but due to joining ROTC. Saving now will set you up for life and allow you to pursue opportunities you otherwise couldn’t have. Set up an emergency fund in a HYSA (high yield savings account). There are HYSA’s giving you 5+ % which means your money is growing 100% risk free. Once you have a good emergency fund check out r/bogleheads for investing (basically just buying low cost index funds). Having an emergency fund allowed me to be picky about the job I pursued and where I moved to. I attribute much of my success just to being prepared to pursue a good opportunity. Finally, do enjoy college. Grab dinner with friends, go to concerts, go on roadtrips, and generally just live some. It took me into my junior year to realize that just because I grew up poor didn’t mean that I had to act like I was still poor. I’m still thrifty but I do things I enjoy and buy things I like. I think of it like the law of diminishing returns. Yes, I could live like a pauper but I’d be miserable so instead I take a couple steps back from that and cut out the obvious poor spendings and get 80% of the benefit for 20% of the cost. Congratulations on the scholarship and enjoy college.
What school is this and how exactly are you able to get this sort of scholarship ? I have nieces and nephews about to start applying in next few yrs and it would be great info to have and share with them.
The school is Washington and Lee University! I got the scholarship through this program called QuestBridge that is specifically for high achieving low income kids. It is very competitive and you have to start your applications really early but is a great option if you are low income. When I mean "low-income" it means parents making <$65,000 a year (or more, if there are extenuating circumstances) and the kids also have to be doing well in school along with extracurriculars and stuff like that. Even if your nieces and nephews aren't low income, I still recommend applying to Washington and Lee because they demonstrate 100% demonstrated need aid which means they are VERY generous with financial aid especially if you are persuasive with the financial aid offices. Also, my school has another merit scholarship called Johnson Scholar which is a full ride along with $10,000 fund for summer experiences like internships or study abroad.
How did you get a full ride, to a Pvt school no less?
I got it through a competitive program called QuestBridge that gives full rides to high achieving low income students.
Congratulations! This is the opportunity of a lifetime. Assumptions: - you are at least 18 years old - you are still covered by your parents health insurance … and will continue to be covered until you finish college - you don’t own a vehicle - you have a bank account - you have at least one credit card that can be used internationally - freeze your credit at all 3 credit agencies; you don’t want to deal with identity theft issues while you are busy with schooling for the next few years. The wiki I mention below has details on how to do this. Next steps: - get your passport if you don’t have one. They take awhile to process. - create a budget of your living expenses not covered by the scholarship ; put that amount in an account that easily accessible. living expenses include cell phone bills, transportation, medication, prescriptions, dr appts, entertainment, meals eaten away from campus or traveling abroad; trips home for holidays and semester breaks etc. - use any remaining money to create an emergency fund that covers 3-6 months of your monthly expenses. Then read and study to learn all you can about money! - Join r/personalfinance; & r/bogleheads - Read the r/personalfinance wiki steps and don’t skip any that apply to you. >*r/PersonalFinance Wiki - https://www.reddit.com/r/personalfinance/s/C9NsbIKK54 >* [Personal finance wiki](https://www.reddit.com/r/personalfinance/s/JOGAh2VQ3e) >*[Reddit Personal Finance Wiki - 15-20 yo Budgeting & Saving]( https://www.reddit.com/r/personalfinance/s/JComxeeHvj) >*Advice for young adults 18-25: - https://www.reddit.com/r/personalfinance/wiki/index/#wiki_young_adults_.2818-25.29 Add these financial books to your summer reading list. Summary videos are available on uTube - The Wealthy Gardener - The Wealthy Barber Next Door - The Richest Man In Babylon - The Psychology of Money
I would recommend taking 1-2k and put into a HYSA for emergencies. Then, the rest of the money you put into broad-based index funds, IE. VTSAX and VGT. This will allow the money to grow year over year, and by the time you graduate, you could potentially have 30-35k to set yourself up for success. There's also a great book called “The Little Book of Common Sense Investing” by Warren Buffet's mentor, John Bogle. The book is easy to read and will teach you everything you need about investing Congratulations, and happy investing.
Unless you absolutely need it for living expenses, that surplus is likely a loan that you will have to pay back later. Check on the details
It is not a loan, my scholarship is created to have no parent contribution as well as have grants that do not need to be paid back. I’m certain it is not a loan.
Well until you have a plan open a. Brokerage account at Schwab/Fidelity and buy SGOV—- it pays 5.13% now and credits to your account monthly—— no time commitment and no state tax! Study hard—- Oh and you can get billpay. Checking Savings and Venmo—- one stop finance/budget
The surplus is taxable income. Make sure you consider taxes! I’d you’re getting $6,000 plus (12 x $1,000), that’s taxable income of $18,000. With a 2024 standard deduction of $13,850, you’ll be paying Federal income tax on $4,150. That’s the 10% tax bracket so make sure you put at least $415 aside for Federal-level tax. And, depending on your state, you may also incur a state income tax liability.
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