Editor’s Desk: This is a guest article from Bobby Dee, a personal finance blogger
For a freshman starting out in college is a crazy time in a young adult’s life. Most college freshman is going to experience some dramatic changes. Ever hear of the “Freshman 15”? It’s the excess 15 lbs that a freshman gains in their first year of college, and that’s not the only change a first year college student will experience. For many first year students college is their first taste of personal and financial freedom, some 18 year olds handle it well, others don’t handle it so well.
Getting out from under the watchful eye of good ol’ mom and dad is an awesome milestone for a young person, but with new found freedom comes new found problems. Many individuals can become stressed out with having to balance academics, a social life and finances. It’s good to start a young person out on the right foot with their personal finances, and it’s important for students to establish good personal finance and spending habits early, that way they are not stuck with a bunch of credit card debt when they graduate. It’s hard enough dealing with your student loan debt when you’re out of college but dealing with credit card debt or any other financial problems you might have run into while in college can be an unnecessary challenge.
These few suggestions will keep college youngsters from sliding down the slippery slope of credit card debt and financial hardship; it will also put them on the way towards financial freedom, that way when a young individual graduates and joins the ranks of the gainfully employed they can start their new life set up for success.
Get a job. Regardless if your college is paid for entirely each and every semester by dad and mom, or if you’re on a full ride scholarship for water polo, there are plenty of benefits of keeping yourself employed to work through school. For one having a job is going to prepare you for the real world of having a 9-to-5 job and it’s going to give you a little disposable income while you’re in school and if you’ve ever been a college student you know that you could use the money.
Don’t eat out (all the time). This is a challenging one to pull off for a college student, especially when all your buddies are going out for chicken wings and beer on a Friday night, but do your wallet and midsection a favor and try not to eat out on a regular basis. If you’re eating out a lot, you will be most likely consuming unhealthy food and you’re almost certainly spending more money than you should. Do your system and checking account a favor and keep your money, plan your meals by the week, and buy bulk. Stores like Costco are great for buying bulk products.
Use Public Transportation. This tip can be especially helpful if you live on campus, or your school is located in a major metropolitan area, using public transportation is going to save you a lot of money, and if you just can’t see yourself taking the bus everywhere and you’re going to invest in purchasing a vehicle make sure you think small and economical. There’s no use in purchasing a vehicle that’s going to guzzle gas and money out of your wallet every day.
For the most part the important thing here is to not get stuck with a huge car loan while you’re in school that would be a disaster. It’s hard enough to deal with your student loans when you graduate, you don’t want a hefty car loan on top of that student loan debt that you’re going to have to pay off from income of that first job.
Don’t use your credit cards. Credit card companies love marketing to college kids because they are easy targets. Credit companies are willing to extend credit cards to students because they are practically guaranteed a decent paying job once they graduate from college. Credit card companies also like going after students because most of them have no real established credit so creditors can stick college kids with higher interest rates.
The credit card companies put out the bait and most college kids are willing to take it, for many broke college kids credit cards are just too tempting to resist. The appeal of being able to purchase immediately and being able to pay for it month-to-month later is a prospect that’s hard to resist.
Start a budget. This is an important step in a young person’s life; every student should have a budget and stick with it (see Mint.com).
Always ask for the student discount. This may seem like a no-brainier but you would be surprised at how many places don’t publicly advertise their student discounts. For some small businesses, even though they don’t have an official student discount, if you just ask nicely some businesses will just chop 10% off your purchase.
The average college graduate starts out their careers with $23, 186 student loans, that’s quite a balance to have to deal with when you’re out there trying to get a job in a country with 9.2% unemployment rate. You don’t want to compound your problems with credit card debts, a huge car loan or any other type of debt that you can get yourself into if you don’t watch your finances while in college.
About the Author: Bobby Dee is a personal finance blogger and also works for a consumer credit counseling agency whose credit counselors have been offering free debt counseling for over 20 years!
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