Friday, January 11, 2013

Finances and the College Student

Happy Friday All!

Now that everyone is settled back into their daily routines after hopefully enjoying a wonderful holiday season, I wanted to resurface from the Alumni Alliance Newsletter an article that touched on college students spending habits.

Financial Budgeting in College           

How do you save for a rainy day?           
Well that will all depend on your spending priorities.  Often times, the college experience is the first time that young adults experience the freedom of spending their money at will without their parent’s direct supervision.  However college is not cheap.  There are many needs and wants that will evolve while in college. Though it is human nature to act impulsively, try to resist because spending irresponsibly comes with a cost.  Shopping sprees, parties, and the latest gadgets are all fun but not when you haven’t purchased groceries, put gas in your vehicle, bought your books for the quarter or paid rent.  I’m sure you may have heard at one point or another that you need to stick to your budget and avoid extra expenditures that may be more of a burden in the long run.  So how do you stick to a budget?  For starters, do you have one?  Well there’s no time like the present.

Start with a Budget
Budgets are great tools for you to visually see what your finances look like from week to week and month to month.  You’ll want to start by writing out what your expenses are, beginning with the most important to the least.  The important expenses are what are called “The Non negotiables.”  What that means is take care of your needs first before your wants.  Deviating from taking care of the non negotiable should not be entertained.  Establishing a sound financial regime is a way to develop ongoing responsible spending habits.  Paying your bills on time keeps you out of many financial woes.   Many students don’t take the time to budget their money and end up with more debt than they can handle.  Obligations first, wants later.

Credit Cards
 If you haven’t been solicited by a credit card company yet, you may be soon.  Consider going through your bank to obtain a credit card.  They can provide the best guidance on what suits your financial situation. All you really need is one credit card for emergencies.  Just because you are offered a new spending account at Macy’s doesn’t mean you can afford it.  Spend within your means and you will thank yourself later!

Financial Planning
Planning for your future starts with the present.  Get into the practice of saving money.  A savings account is a great way to start saving.  Consider saving $5 dollars per week.  If you can afford to put more away per week, do so.  It may not seem like a lot at the time but every cent adds up.  Instead of splurging on going out to eat or the movies, plan a dinner night where everyone pitches in the meal lowering the cost on everyone’s pocket book.  Instead of spending $35-40 for a night at the movies, catch a dollar show or host a movie night at your place.  Waiting to see the latest movie won’t really make that much of a difference.  If you have vacations or tripped planned for the future, start saving now.

When in doubt, Ask  
If you need help with managing your money and you don’t know where to go, ask someone who is financially stable.  Start with your parents.  They may or may not be good with financial planning, but they certainly can give you some practical knowledge on their own experiences.  Check with your local financial institutions to see if they offer seminars on managing your money, planning for the future, and credit scores.  You can also talk with your student advisor or financial aid office to see if there are workshops offered for students on financial planning.  The best time to learn how to budget your finances is while you are young so that it becomes a lifelong practice.

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