Tuesday, October 30, 2012

Finance Stress for College Students: How to Deal

Campus is packed with new and returning students, which means that college is in full swing. Classes are in session, professors are already challenging students and the Quad is buzzing with fall schedules; if the stress of school hasn't hit yet, it probably will pretty soon. Getting a higher education is no easy feat, especially when you add money to the equation. I think college is an invaluable experience - socially, professionally and intellectually.

One of the most stressful things about college is the money factor: daily spending, monthly living expenses, and those very intimidating student loans. Do you know what you're going to do with your limited funds this semester? If not, here are a few tips to help you make it to Christmas (or summer) without investing a lot of stress into your finances.

Get a plan

Let's just remove the word "budget" from our vocabulary. "Budgets" indicate restriction. You can't have something. Don't view it that way. Your financial plan eliminates the stress of the "what if's" in your life. Set a daily or weekly limit for you spending and stick to it. Spend half an hour each week devoted to figuring out your spending. If you have to, write down where you spend the most of money and where the least of it goes. Then, decide what you want to invest your funds into and what you can do without. I'm not expecting you to stick with a strict financial plan; you are, after all, in college. I want you to know exactly where you are spending your money. Once you figure that out, you'll know your plan; where to cut and where to invest will be much easier to figure out. 
Set limits

Sometimes, you've just got say no. If your friends want to do something that will have you strapped financially for the next two weeks, say no. If you're eating out max is five times per week and you reach that by Thursday, stop going out to eat until Monday. Set an intention to spend a certain amount of money each day, week or month an honor it. Once you've hit your max, stop spending. One of the best things about college is that you can get a lot of things for free. Your social life won't suffer because you have set a limit for your spending. 
Save a little

Before you roll your eyes, let me explain what I mean. Being in college is almost synonymous with being broke. But I believe you should save something - anything - every month. When you graduate and get a full-time job, of course that amount will be more. You'll invest in a retirement plan and begin to save for big moments like your wedding or your first home. Start saving now so you can get in the habit of putting something aside. Even if it's $10 or $15 a month, good for you! You are building something, so be proud of that fact that, even on a college student's budget, you can save.

Stay away from credit cards

There are other ways to build credit than by getting a credit card. Don't believe that when people tell you it's a good reason to get one. Credit cards aren't for people who can't afford to pay them at the end of the month; I'm betting that, since you're in college, you don't have sufficient income to make those payments. You already have loans. Don't add on more (with terribly high interest rates) with credit cards.

Friday, October 12, 2012

How to Avoid Student Loan Debt

Tens of millions of Americans are struggling with student loan debt. In fact, student loans have surpassed credit card debt and has twice the delinquency rate. Due to most of them being subsidized through the government, student loans are one of the easiest loans to get approved for. This is a good thing, but it can quickly turn into an expensive burden. So what is the solution? Maybe avoid higher education all together. Considering how hard it is to find a decent paying job, this is probably not the best solution. The best way to treat a disease, is to avoid it all together. The best way to avoid student loan debt is to keep them at a minimum. With a little research, you can avoid thousands of dollars in debt.

Figure out what you want to do first. Many kids right of high school are sold on the big business of education. Narrowing down what you want to do will save you money. Choosing the right school can make a big difference. Unless you are going to some fancy Ivy League school or one that is at least reputable to employers, stay within your state of residency. Out of state costs are far more expensive than staying in your own state. Really consider going to your local community college. The least expensive option is to stay local. This is important considering that the first two years of college is mostly general education. Besides, the degree is given by the school you finish and not the one you start.

Military service or any option that pays for school is important to consider. With the GI bill you could get school paid for by joining the service. Keep in mind that being in the military doesn't necessarily translate into a job that puts you in harm's way. There are hundreds of jobs that don't include going off to battle. In fact, in many cases you can choose a job that will mirror the job you want once you graduate. Employers appreciate military service and your service could get you to the top of the list when applying for a job.

The most important thing to do, is really understand the choices that you are making. Make a decision that you are sure of. Avoid getting into debt for deciding a path that you no longer want. Don't fall in love with the idea of a higher education, fall in love with a career that makes you happy.