College Money Management 101: Dealing With Expenses

AdminBy AdminOct 28, 20170

Many college students are prepared for tuition, fees, and textbooks, but they rarely take into account all the other expenses that go with being a student. For one thing, most students don’t have the luxury have earning a lot of income while they’re in school. For another, most students still have expenses like housing, food, and entertainment that they just sort of “wing it” on instead of creating an actual budget.

If you’re like most college students, you’re going to graduate with a good deal of student loan debt as it is, so you don’t want to make it worse by mucking up your personal finances as well.

The Credit Card Cycle

The Credit Card Cycle

Have you ever seen a dog chasing its own tail? That is essentially, what many people do when they make purchases using credit cards and then only make minimum monthly payments. The typical credit card purchase is 112% higher using cash. If you recklessly run up the balances on your credit cards, you end up struggling just to make the minimum payment while the interest accrues even more every month.

If you’re at the point where you can just barely make the minimum payments on your credit card bills, you need to stop chasing your own tail and STOP using your credit cards. The last thing you want to do is pile up massive credit card debt in addition to your student loan debt.

Value Shop For Books

Value Shop For Books

Don’t always your books from the campus bookstore. Many schools charge higher prices, even for used textbooks, than you can find online or from an independent bookseller. Amazon.com, in particular, offers a nice variety of textbook options for students. You can rent books, buy used or new, or buy Kindle versions of your textbooks. The also offer a resale program for used textbooks as well. Take a look at all the different options and try to get the “most bang for your buck”.

In some cases you may just want to buy a cheap Kindle book, in others, it might be a better idea to get a printed edition that you can sell back. Compare all your options based on whether you intend to keep the book, or if you only need to borrow it to get through one class.

Plan Your Expenses

Plan Your Expenses

Before you accept the full amounts of student loans that you’re offered, come up with a budget for your tuition and books. You have a choice every year after you file out your FAFSA of how much of the loan money you’re going to accept. Instead of just taking it all, budget out what you need for tuition, estimate what you’ll need for books, and build in a modest cushion for other expenses that you might need such as lab fees or software.

The point of this budget is to not borrow any more money than you have to. While it might be nice to get some “extra” pocket cash from a student loan disbursement, you’ll be paying interest on that money for quite a long time. It’s just not worth it.

Pace Yourself

Pace Yourself

One of the great experiences of going to college is the ability socialize with people your own age from diverse backgrounds. Unfortunately, this socialization often takes place in bars and clubs around campus. While it is good to have a night out with your friends once in a while, weekend “partiers” can run up quite a bar tab.

If you’re out at a club, sip slowly and switch to water every other drink. Not only will you wallet thank you, but it will be easier on your liver as well. In general, binge drinking leads to bad decision making in other areas, so avoid drinking too much. Having a couple of beers to be sociable is okay, but don’t make a habit of it.

Order In

Order In

Did you know that just getting a pizza-to-go once a week adds approximately $2,000 to the cost of your four-year degree? Also, to be honest, a good number of college students order pizza more than once a week. Take advantage of your school’s meal plan or cook your own food at home. If cooking at home isn’t an option, then go visit your family for dinner a couple of nights a week.

However, you do it, try to minimize the amount of money you spending eating out so that you can put that money to better use. Late night deliveries tend to jack up your expenses. Eating at home may not be as much fun, but it will save you a ton of money.

Accept Your Limitations

Accept Your Limitations

People are often tempted to try to buy everything thing they want in a short period. While you’re in college, you might have to make some short-term sacrifices in order to meet your long-term goals. Hang on to that old beater you had in high school or use public transport instead of buying a brand new car.

Don’t get caught up in fads, or be swept away by the latest and greatest tech trends because your friends have these things. Stick to buying what you can afford and realize that you will have plenty of time later in life to buy the things you want. Separate purchases between what you want and what you need. Get the needs and skip the wants for now.

Conclusion

What many young people don’t realize is that the financial habits they practice during their college years can set the tone for how they manage, or mismanage, money for the rest of their life. If you start as someone who lives week to week and constantly struggles to pay your bills, you’ll doom yourself to live that way even after you graduate and start earning more income unless you change the way you spend money.

Practice a little frugality and learn how to set up a budget while you’re in college. Starting off right will help you be more financially stable throughout the rest of your life.

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