Student Loans

Keeping Out of Financial Trouble at College

Many college students enter university life with little financial education – if they did not learn how to deal with money from their parents, and were decent students in high school, they probably did not attend the most important class they SHOULD have taken – Business Math (or whatever financial class the students were shunted off to who were not good at math).  What results is the graduation of Americans from high school into college, and then from college into the “real world” with poor personal financial skills.  The poor personal financial skills then result in high debt, poor spending habits, and a society which is less capable of weathering general economic hardships.

Below are ten points I would press on any student to keep out of financial trouble at college:

  1. Take classes dealing with personal finance.  As tempting as that fencing class is, or the fun-sounding science-fiction movie class, use an elective or two on learning how to handle your own finances.  No matter what field you plan on entering, knowing how to handle money is always useful.
  2. Avoid Credit Cards.  The general rule is, if you cannot pay off a credit card in full every month, do NOT get one, or have one ONLY for well-defined emergencies.  There is a truth to needing to build a credit history, but that can be done through other means after college.
  3. If you have the time, get a job.  Reward for work helps lead to a serious desire to properly account for the cash you earn on your own, rather than the money being handed to you without connection to labor.
  4. Pay with cash.  Sometimes, the visible reality of an empty wallet can be sobering – particularly when you do not know where you are getting more of it.
  5. Set a budget.   Write down your income and expenses, and see where everything is going.  Plan out your spending.
  6. Save.  Pick a percentage or a definite amount to put into a bank account where it is out of reach, and not connected to a debit card.
  7. Get good friends.  If your friends are unsupportive of good spending and financial habits, you may need to reconsider your friendships – even if you and all your friends have plenty of money.
  8. Examine what colleges and college experiences are necessary.  A LOT of money can be saved by taking basic courses at local community colleges, and transferring later to the more expensive four-year schools.
  9. Know what is free at college.  Perks abound on college campuses – career centers, professional advice, even some medical help.  Find out what your school offers before paying for something that may be free.
  10. Use your imagination.  One saying is “entertainment is expensive, fun is cheap.”  Learn how to have fun and think outside of the box.  Sometimes it can be enjoyable just being around the right people rather than blowing money on expensive stuff.

Financial education in America is sorely lacking – it is one of the reasons we have seen a recent downturn in the American economy.  When people do not know how to handle their money, spending more than they earn and getting in over their head on something they cannot afford, even those of us who are responsible with our finances suffer.  The earlier we learn financial responsibility, the better off society as a whole becomes.  If you have missed what you need in your childhood and high school years, strive to learn it in college.