Student’s Guide to Personal Finance

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 to pay for the fees. 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 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:
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 games, but is it necessary? If you already have a friend who has one, go over to his or her 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 rather than spending it on a couch watching reruns of Mythbusters on the Discovery channel. If you live in or are close enough to a major city, you can get an antenna to pick up the basic network TV stations. You may even get some of those channels in HD with the right antenna! Another area where college students probably spend too much is on food. Many of us will grab some fast food in between classes or stop by a coffee shop in the morning for a USD 5 specialty coffee drink. Sure, these are great to have on occasions, but if you spend USD 10 everyday on food and drinks, that adds up to USD 300 a month. Even buying a bottle of soda everyday will cost you at least USD 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.