Straight-A Personal Finance for Students
College is full of learning experiences: first serious relationships, living away from home, 15 page research papers, and the freedom to follow your own schedule, just to a name a few. But of all the education and life lessons we get in college, financial lessons are too far and few between.
The average student graduates from college with $25,000 in debt, and that is true for traditional students and online students alike. So many people, teachers and parents included, are so focused on students getting a “good education” that they neglect to teach students some basic skills that will be valuable for the rest of their lives — such as lessons in personal finance.
Graduating with such a steep amount of debt means that managing finances in other areas becomes significantly more important, and many students are ill-equipped or ill-prepared to face the challenge that personal finance poses. For students (and parents of students) here are some of the most important personal finance lessons to be learned before graduation comes along:
Use credit wisely
I couldn’t tell you the number of students I’ve met who opened a line of credit and then maxed it out, leaving a heap of debt to pay off on top of any student loans they might have.
Let me first say that there is nothing wrong with having or using a credit card. In fact, getting and using a credit card will help you begin building a credit history and will boost your score, giving you freedom later in life to make large purchases, such as cars and houses — if you use it wisely.
For students this primarily means not carrying a balance on the card at any time. Limit your credit card use to purchases you would make anyway, such as food or books. Any money you spend with a credit card has to be repaid at the end of the month so don’t spend more than you have, and always pay off your balance in full every month.
Save when you can
As a student it is difficult to make money, and even harder to save it. This is partly because students often aren’t making any money, but also partly because any time they do have some they spend it frivolously.
Keeping money in a savings account is imperative for your financial health, both now and later. No matter where the money comes from (unless it’s loan money) you really want to get in the habit stashing some in a bank. The next time you get a paycheck, or a gift from your Uncle Larry, put some in a savings and keep it for a rainy day.
When you graduate and are looking for a job, that money will be a lifesaver. You may not need to use it (and with any luck, you won’t) but it is always better to have it there than to not.
Take out only what you need
Anymore it is almost impossible to graduate without taking out at least one loan. If you have to borrow money, make sure that you only borrow what you need.
It’s very easy to overestimate what you will need, or to be blinded by the fact that you getting money to spend, but the fact remains that you will have to pay that money back after you graduate, and the more you borrow, the more you will have to pay back, and the longer you will stay in debt. So take out only what you need, and make due.
Find work if you can
The benefits of working while going to school are myriad, and too numerous to completely list here. Suffice it to say that, in addition to having some pocket money — which keeps you from spending the money that’s in the bank, or using that credit card in excess — working while going to school will also teach you extremely valuable time management and life balance skills that will be useful later as you look for a job.
Plus, any work you do can go on your resume, which will really make the transition from college to work life that much easier.
Take a course
You’re in school — take a finance course! If you are totally oblivious to anything with money, it will definitely be in your benefit to take a class on personal finance to get yourself up to speed. You can even enroll in online courses for less money if you can’t work it into your schedule at school.
Whatever you do, just don’t leave college without having learned something about money!
By-line:
This guest post is contributed by Angelita Williams, who writes on the topics of online courses. She welcomes your comments at her email Id: angelita.williams7@gmail.com.
Student Aid Tip
for the weeks of: May 13
Setup Your College Budget
Student entering or returning to school in the Fall need to setup their tuition and college living budget. This will help you plan the financial aid you need and help you budget expenses so that you stay within limits.
Weekly Tip:
How to Graduate from College without Student Loan Debt
Students graduate college with a degree, and more often than not, with tens of thousands of dollars of debt. According to the Project on Student Debt, outstanding student loans now total $833 billion, surpassing credit card debt for the first time in history. Two-thirds of college seniors graduated with loans in 2010 and carried an average of $25,250 in debt. Although these facts are alarming, keep in mind that with some planning and the following helpful tips, you can avoid unnecessary college debt.
New Student Loan Model Launches
Meeting the cost of higher education has been a challenge for college students for decades, a problem that clearly is not getting better. Tuition costs continue to rise at a pace faster than inflation and with the current weak economy offering yet another drag on personal finances, many students are taking out loans to fill in the financing gap. The result is that while students are able to complete their education they often find themselves deeply in debt, with loan payback extending well into their careers.
Read more articles at our SayCampusLife BLOG
Underemployed or Unemployed? You Are in Good Company.
High unemployment continues to take its toll on the workplace, but for the class of 2012 the outlook is especially bleak. Many will find jobs, but some will be forced to take positions below their level of training and knowledge. These findings are the result of an analysis of government data conducted for the Associated Press and released on Monday.
Getting the Most out of Studying in the UK
A college education is designed to give you a great head-start in life, not just in your chosen field of expertise, but also in the social and cultural aspects. As part of this process, many thousands of American students take up the chance to study abroad every year, as an opportunity to broaden their horizons and absorb themselves in a different culture.
The UK is always a popular destination with US students, as there are cultural similarities - yet enough differences - which make it a stimulating home from home. While your college will help you with the academic side of things, such as finding a suitable course and assisting with the continuation of your existing study program, there are other things to think about when it comes to preparing for living in the UK.
Official advice comes from the State Department, which has now set up a dedicated website to help US students prepare for overseas study. This includes an access point for the Step Traveler Enrollment Program, which allows you to enter specific details regarding your time abroad and register them with the State Department. Should you need to be contacted in an emergency, or need to come home quickly, this information will help the department to provide the assistance you require. Should you be unfortunate enough to find yourself in serious financial, legal or medical difficulty, this service can prove invaluable.
If you're studying in Great Britain, you will need to sort out a visa from the Home Office UK Border Agency. While the UK welcomes foreign students, there is plenty of information you must familiarize yourself with, relating to things such as working restrictions and stay duration. The Home Office website should provide you with all the information you require.
Once you have all of the official requirements out of the way, it pays to familiarize yourself with UK culture. While the chances are that if you're considering a year studying Britain you're already a bit of an Anglophile, it is a good idea to get a handle on how things work over there. The little things may seem insignificant, but they can add to the stress of leaving your family, friends and culture.
Take owning a car for example. In many areas of the US, owning a car is a necessity, but this is not necessarily the case in the UK. What's more, gas - or petrol as it's known over there - is proportionally much more expensive. In addition, it's illegal to have a car on the road without insurance, whether you're driving it or not. Yet there are special policies available such as student car insurance deals from Can Can Cover, so if you think you'll need a vehicle while you study in the UK, do your research ahead of time and factor in these costs. The same principle can be applied to all living costs - it is a good idea to know how much things are likely to cost so you can budget for your stay. Finding out too late that you do not have sufficient finances can seriously impact on your overall experience.
With all this to think about, moving abroad can seem extremely daunting, but it needn't be. By following this advice and planning ahead you'll be able to focus on what is likely to prove a life-changing experience.
5 Things for College Students to do This Summer
You’ve finished your finals and have nothing on the schedule for this summer. That can be a good thing if you’re burned out and simply need a break. Or it can be a bad thing if you have too much time on your hands and not much planned or available to do.
Should You Register For Summer Classes?
You’ve just completed a grueling academic year and you can’t wait to enjoy an extended break. Late nights out with friends, sleeping in ’til noon and heading to the beach on a whim are some of your dreams for this summer.
Those dreams may not be completely realistic or might at least distract you from what you know you really should be doing and that is taking one or two summer classes and putting off your downtime until later in the summer.
Let's get started!
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