Class schedule? Check.
School map? Check.
Budget? Not so fast.
Many young adults head into college years prepared for almost anything… except for the surprisingly hard-to-control impulse spending that college students face.
How can young adults and their parents plan for financial success during these important years? Here are 5 ways young adults can wisely handle college spending while hitting the books.
#1: Get on the same page. Before heading to college, sit down together and list all of the great things that money can do for students on campus, as well as all the ways poor spending choices can debilitate future choices.
Then, get technical. How much will you plan to spend on restaurants each month, if any? What consequences will you agree to if you exceed that limit? Will a part-time job be an option? If so, where will that cash go? If you’re not sure what other categories to consider, download a free college spending plan that has estimated expenses as well as “actual” fields to populate once the college scenario goes live.
#2: Get support from friends. You may be surprised to find that nobody on campus is interested in your financial restraints, and you may need to assert yourself. “Everyone wants to go places and do things, but no one thinks about chipping in for gas,” says Lauren Urbina, a current college student. “I kept a mason jar in my car that said ‘thank you’s don’t keep my car running!’ as a cute way to remind people to chip in,” she says. “I never minded driving if everyone chipped in even two or three dollars, it made a HUGE difference.” Don’t underestimate the ways college students can support one another, but only if healthy (and friendly) boundaries are established early.
#3: Combine decisions. College students are not just spending money, they’re also choosing where to spend their time, energy and emotional investments. That means that when deciding where to spend money, they can hit multiple birds with one stone. Urbina offers grocery shopping as an example. “Buying food that does not go bad quickly and will keep you full longer is much smarter than buying things like chips and cookies,” she says. “Making smart choices when choosing what to eat cuts down on your grocery bills and puts some extra money in your pocket when all your friends want to go out for putt-putt or to the dollar theater.” An added benefit? The proven brain boost and subsequent academic performance that comes from good nutrition.
#4: Know you’re a target. “If students aren’t careful, it is SO EASY to just throw money away on things that are advertised well!” says Urbina with a frustrated sigh. “Marketers really know what they are doing, and college students are fresh meat for them.” Read up on common tactics, and know that when someone is offering a gift or favor, there may be strings attached.
#5: Invest in your financial future now. The good news is that smart spending while at college is not all about rules. Instead of focusing on the constant restraints, consider it your first true exercise in independence. Once you’ve proven to yourself that you can control spending impulses, consider taking that control further by getting a student-oriented credit card. If handled correctly, a credit card can position you for success once your degree is in-hand. After all, many prestigious firms looking to hire college grads will be checking credit scores. Using a credit card wisely to build your credit can be an advantage you’ll have over other potential candidates for that dream job.
For parents who are already wringing their hands over the unavoidable costs of their kids’ higher education, college spending can be an added stressor. So before packing those suitcases, sit down together and map out a loose agreement for both student and parent to track and celebrate at the end of each semester. What about you? Have you seen surprising spending trends at your school? Tweet tips to other readers at @cesisolutions, or comment your lessons learned below.
The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt. For a free debt analysis, contact us and find out how we can help.
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