Here are a few simple tips for keeping yourself out of massive debt during your college years.
I think nearly every college student in the US, aside from a select few who have incredibly rich parents or full scholarships, has to take out a loan or two to pay for college. Thus, the vast majority of us will leave college with both a degree and an IOU in hand. Unfortunately, many young adults who are off on their own for the first time find themselves not only with massive student loan payments but large credit card debts, too. For some, it's the only way to survive. For others, especially those who are receiving a modest living allowance from their parents, it's pure irresponsibility that puts them in a dire financial situation. Even for the most careful of spenders, we can still find ourselves making bad choices or mistakenly overpaying for goods or services.
Is there any way to avoid the pitfalls most poor college students find themselves falling into? Of course! It doesn't even take a major in finance to come up with a plan of action for setting yourself on track to becoming a fiscally responsible member of society. Here are five tips to get you started:
1.Cutting Back!: Cutting back on things that are not absolutely necessary is a good start. Sure, we'd all like to own a Nintendo Wii and the latest and greatest games, but is it necessary? If you already have a friend who has one, go over to their place and get your gaming fix along with a little social time. Or, if you still want some games to play on your own, revisit some of the classic systems of our childhood. Even a basic NES system will provide hours of entertainment. In fact, if you're that into video games, chances are you've got a Playstation, Sega Genesis, or a Nintendo 64 lying around and a decent library of games. If you want a new game, check out a used game shop or eBay for titles you've never played.
Video games are just one example of a way in which you can cut back. One thing that's saved me hundreds of dollars was foregoing cable television. Yes, it's nice to have a variety, but how many of those hundreds of channels will you actually watch? Plus, if you're a full time student, you'd be better off spending your time studying or going out with friends than spending it on a couch watching reruns of Mythbusters on the Discovery channel. If you're close enough to a major city, you can get an antenna to pick up the basic network TV stations. You can even get some of those channels in HD with the right antenna! What's another area where college students probably spend too much? Food. Many of us will grab some fast food in between classes or stop by a coffee shop in the morning for a $5 specialty coffee drink. Sure, these are great to have on occasion, but if you spend $10 every day on food and drinks, that adds up to $300 a month. Even buying a bottle of soda every day will cost you at least $30 a month or more. Pack a lunch, brew your own coffee, and buy twelve or twenty-four packs of pop instead of shelling out more at stores and vending machines.
2.Budgeting: Coming up with a basic budget is simple enough. If you are working part time and get around $400 a month, you can divide that into fourths and allow yourself $100 for food, $100 for entertainment, $100 for additional expenses, and $100 for savings. It's as easy as that. If you budget in a certain amount for "additional expenses", such as unexpected bills or to assist in case you spend too much in another category, but don't use it all, you can either add it to your savings or use it to treat yourself to a new video game or pair of jeans.
3.Work-Study: No matter what school you go to, you can almost always find a campus job. Some schools require you to have work-study funds, but chances are if you're having a hard time paying for school and living expenses, you probably do. If you can land a job like a security guard, library or computer lab attendant, or parking attendant (which is what I do), you'll likely be able to study while on the job. I'm actually writing this article at my job as we speak. Schools will give these jobs to students to help them make enough money to live on while still allowing enough time to study.
4.Bargain Shop: Sure, you might think you already bargain shop. You might shop the clearance rack at the Gap or buy drug store makeup rather than shelling out hundreds at a department store. While that can make a difference, you can always take it one step further. Instead of going to the mall and buying brand new clothes, check out your local thrift store or Ragstock. If you would rather not wear used clothes, another alternative is to shop at discount stores like TJ Maxx or Kohl's. You can find incredible deals, and often you'll find top-of-the-line products for less than you'll find anywhere else. For example, I once bought a pair of Converse All-Stars at TJ Maxx for $10. The price I would have paid at a regular shoe store would have been $50 at the least for the same pair of shoes!
5.Choose Loans Carefully: Not all student loans are created equal. One must be thorough when reading the fine print. I must admit that I'm no expert on loans and the specifics, so the best advice I can give is to speak with your adviser or the financial aid office at your school to find out what loans you are eligible for and which ones are worth your while.
Getting a college degree can be challenging and expensive, but the benefits far outweigh the costs. Not only will you be more satisfied with your career, but you'll also have enriched your life through the pursuit of knowledge. You should be proud of yourself for taking this path in life, but if you find yourself in tens of thousands of dollars in debt afterwards you probably won't be as satisfied with your accomplishment. Take these steps today to protect yourself from debt!
By Janna Seliger
