Tag Archives: Credit Cards

Lesson II: Managing Your Finances

Unless your an trust fund baby with a few of Mommy and Daddy’s credit cards on hand then your likely to have to watch your finances while in college and for the rest of your adult life. Otherwise you will end up on permanent diet of ramen noodles and using empty milk crates as major furniture pieces (no offense to anyone who has a fondness for ramen and milk crates.) So while your still in school and don’t have too many major expenses (I know we have expenses but its only gonna get worse folks.) A while back I found an article on Get Rich Slowly by J.D Roth that talks about money tips for college students, most of it is common sense but its things that you really should be thinking about and doing. I will highlight some of the really important tips with a few of my own suggestions and provide a link back to the original article.

In the original article J.D breaks down the tips into the categories of Money Management, Organizational and Planning, Campus Life, Personal Life, Decision Making and Money Making so that’s how I will discuss them.

Money Management

“Don’t get a credit card unless you need one”, “Save and then splurge”, “Pay your bills on time”

College is the start of our adult lives, its when we start to have to pay “real” bills and start to have “real” expenses. Personally, I’m using this time to build a solid credit history. I try to keep my expenses to a minimum and pay my bills on time. I have two credit cards and although I don’t “need” them I do use them often but only as much as I can pay off at one time. The author made a statement that he didn’t think college students should have credit cards. I personally believe that if you can use a credit card responsibly, by only making purchases that you can pay off in full at the end of the billing cycle then you are probably ready for a credit card. If you don’t think you are ready to handle having a credit card yet or can’t afford to have one yet then don’t tempt yourself by getting one. You have to realize that you can’t spend more then you make and you have to keep on top of your payments or you will snowball into debt and your credit history will be shot to hell. If you do get a credit card (whether its because you need it or you want to establish a good credit history) make sure you shop around for the best plan, start off with a low credit limit and keep track of all the purchases you make with the card. I found that using a separate checkbook ledger just to keep track of your credit card purchases and payments works really well (if your a member of your local bank they will usually give them away for free!)

Organizational and Planning

“Track your spending”, “Make your budget”

These are really good tips in general for anyone who is trying to manage their finances. If you can get yourself into the good habits of keeping track of what you spend and making a budget early on then it can last you a life time. Making a budget can be as simple as listing your total monthly income and your total monthly expenses (this includes expected expenses as well as variable expenses.)

Campus Life

“Buy used textbooks”, “Live without a car”, “Take advantage of campus activities”

Keeping yourself busy academically and socially will prevent you from making purchases out of boredom rather than necessity. Before you buy you textbooks from the campus bookstore (which can be ridiculously expensive) be sure to look at off campus bookstores and online stores, although you will find most books cheaper online be sure to watch out for shipping and handling (the fees can be killer.) More information on buying textbooks will be covered in a later lesson. The only tip that I have an issue with is “Live without a car.” If you live on campus and can find a on campus job then living without a car is possible. But if you have a job off campus, have other commitments off campus or are a commuter then living without a car isn’t possible. I am a commuter to my campus so living without a car isn’t possible but I do use the public bus lines to go to school often which saves money on gas and less wear and tear on my car. Basically, if you can live without a car then by all means its a good idea, but if you can’t then look for other ways to save on traveling expenses such as carpooling or public transportation.

Personal Life

“Get involved”, “Eat healthy”, “Limit vices”, “Have fun”

Everyone knows that being a college student is much more then just going to school. Its about the college experience, a new school in a new place with new friends and new experiences. Getting involved on campus is a great way to meet people and can be a lot of fun. To stay on top of your game academically, try to limit the vices, stay healthy and go easy on the booze and drugs.

Decision Making

“Make smart choices”, “When buying something, ask yourself “Do I need this?”

This stuff really is common sense and stuff you should be doing already. But then again… We all know that college is usually filled with a lot of dumb choices and impulse spending. Just try to make most of your choices smart ones and try to think about how much you need something before you buy it.

Making Money

“Spend less than you earn”, “Be an outstanding employee”, “Learn to invest”

In the original article the author mentioned about having a part-time job. In my opinion I think that college students should have some form of a part time job while in school (whether its on campus, off campus or an internship.) I think that it helps balance out all the time in class, it gives you some money to work with and chances are you might be able to find one that has to do with your major. The only thing I would have added to the list was that while investing is important you should also be putting a small portion of your weekly earnings into some form of an interest-earning savings account that you don’t touch. This is in case of an emergency or to save up for a future large purchase (such as rent for an apartment or a car etc.)

To read the original article check out, 27 Money Tips for College Students