College

Money Tips to Help You Survive and Thrive in College

Money Tips to Help You Survive and Thrive in College | www.TheHeavyPurse.comA new crop of college freshman are about to step across that bridge from childhood to adulthood. It’s an incredibly exciting, nerve-wracking time for both child and parents. I’d like to offer a few suggestions to help you make the most of what will hopefully be four memorable years.

5 Money Tips for College-Bound Kids

Many dream about attending college, and I hope it’s everything you imagined. One thing most kids do not spend much time thinking about is money. Yet I would encourage you to follow these tips so you leave college with both a degree and money smarts to take you to the next stage of your life.

Follow a Budget

I know budgets may not seem glamorous, but they will keep you honest and help you avoid spending money you don’t have. Don’t look at your budget as being your substitute Mom who tells you what you can and cannot do. Budgets can actually represent freedom. Set aside the money needed to cover your monthly obligations (cell phone, car insurance, etc.) and the remaining money you can choose how to spend. Just spend it wisely.

Pay Your Bills on Time

Right now you don’t really have much of a credit history, if any, so it’s very easy to move the dial towards excellent or poor and you want to maintain the best score possible. Your credit score may not mean much to you today but it will after graduation. Your credit score will determine whether you can get a loan and the interest rate. Your ability to rent an apartment or sometimes even get a job. Keep it healthy by paying your bills on time.

Use Credit Cards Wisely

I’m not going to tell you to not get a credit card because the lure of your own credit card is most likely going to be too enticing. And in the end, it doesn’t really matter how old you are when you get your first credit card—it’s how you use it that matters. I want you to use it wisely and to your advantage.

Credit cards are NOT free money. They are NOT tools that allow you to live beyond your means nor are they an extension of your annual income. The aforementioned credit score will take a significant downturn if you abuse your credit card privileges by maxing out your card or not paying your bill on time. If you use your card, you must pay your balance in FULL every month. This is a habit you must form quickly if you want to use credit cards wisely. If you find yourself unable to do so or only making the minimum monthly payments, then stop using your credit card and go back to cash only.

Get a Job

School is a priority but a job will help put a few extra dollars in your pocket for both fun and to help offset the cost of college. There are plenty of on-and-off campus jobs and having some work experience under your belt will only be helpful when you’re looking for a job after college.

Don’t Play Keep Up with the Joneses

College will expose you to people of various socioeconomic backgrounds. You may have friends who receive a generous monthly allowance or choose to use their credit cards unwisely to fund a lifestyle beyond their means (and yours too). Don’t fall into the trap of needing to keep up with them. I know it’s easier said than done, but you are only setting yourself up for trouble if you live beyond your means.

This is the biggest mistake college students make: They don’t want to miss out or be left behind, so they turn to credit cards to fund that lifestyle. Don’t do it. In the moment, it will be fun, but you can never outrun debt. You will have to pay it back with interest. Those four years of fun can turn into 5, 10, 15 years of lost opportunities and dreams when you cripple yourself with significant consumer debt.

Remember—You are a $60,000 investment

The final amount may vary, but the fact remains you represent a significant investment. Fun is certainly allowed but at the same time don’t be a underperforming investment either. We don’t send you to college for no reason. We expect to earn a positive return in the form of you making a successful transition into adulthood, which includes working hard, getting a good job and becoming a thriving member of society.

Shannon

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August 26, 2013  •  50 Comments  •  College

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  1. Monday, August 26th, 2013
    Amen to "Don’t Play Keep Up with the Joneses!" I saw this firsthand in college and it was really unfortunate. Some people had "fun funds" simply for entertainment, but because of it they had no part-time job.
    • Monday, August 26th, 2013
      Playing keep up with the Joneses is one of the most expensive habits to form. Unfortunately for many, this really starts in college because it's the first time there is no one to tell them "no" and some are making their own money decisions for the first time.
  2. Monday, August 26th, 2013
    Greg did go into debt during college but not nearly as bad as some of his friends. He ate super cheap and he always had a job..those two things helped!
    • Monday, August 26th, 2013
      A job definitely helps. Plus, I think when you're earning money, it sometimes helps you think about how you use it beforehand. Whereas money handed to you is easily spent without thought. :)
  3. Monday, August 26th, 2013
    I agree with getting a job, and becoming an RA is also helpful since it takes care of room and board! Your last tip is excellent - it really is an investment, and not just 4 (or 5 for the ones on the "Strive for Five" plan :)) years of partying and socializing.
    • Monday, August 26th, 2013
      Thanks, Anna! It is an investment and I think that is something both kids and parents forget. But it's a substantial amount of money and deserves the same care and respect you would give that money if you invested it in the stock market.
  4. Monday, August 26th, 2013
    These are all great tips! Definitely get a job if you can. It looks great on your resume and who doesn't need money?
    • Monday, August 26th, 2013
      Thanks, Michelle! Having work experience definitely looks good to future employers and in this job market - you want every advantage possible. Plus, working also hopefully means you're too busy to be bored and looking for ways to spend money. :)
  5. Monday, August 26th, 2013
    I am a huge advocate of working while in college (full-time). I did it and, while it was hard, it helped me both financially and professionally.
    • Monday, August 26th, 2013
      I agree, Nick. It isn't always the easiest balancing school and work, but it can be done and also be very rewarding.
  6. Monday, August 26th, 2013
    Excellent advice Shannon!

    I definitely was not a big spender when I was in college and I always made sure I had a part time job to pay my rent and other expenses. I usually worked as a cashier in a grocery store (pre scanner days) when you had to key in all of the prices and they would keep track of how quickly we put through each customer. It wasn't much fun, but at least I made some cash.
    • Monday, August 26th, 2013
      Thanks, Sicorra! I remember those pre-scanner days! :) I sometimes think those minimum wage and unglamorous jobs are good motivators for doing well in college. :)
  7. Monday, August 26th, 2013
    Good post Shannon! I really wished I would've realized that credit cards weren't free money while in college. That said, it was an invaluable lesson for me. I also think having a job is a great route to take for many students. It can help them begin to balance priorities as well as learn how to manage their time, money, etc.
    • Monday, August 26th, 2013
      Thanks, John! It's true we often wished we had not made money mistakes and yet those lessons are invaluable. Even being able to work a few hours a week can make a difference.
  8. Monday, August 26th, 2013
    Great post Shannon. I have to think about the "getting a job" part. My college students who work are 50/50 as far as managing the job. I think that it is good time management and best for the kid to work, but some of them simply need to stick to the books!
    • Monday, August 26th, 2013
      Thanks, Tony! School definitely needs to come first and students need to find that balance, taking too much on at once can be a recipe for disaster. Some also need to prioritize a little less time for fun and give a few of those hours to work too. :)
  9. Monday, August 26th, 2013
    Credit cards are such a danger for college students. They are handed out like candy on campuses everywhere. Regretfully, many college freshman haven't been taught what buying on credit means and get into serious trouble by using them. It's doable to hold down a part-time job while going to school full-time. I worked on campus in the cafeteria about 12 hours a week. That helped with expenditures outside of my tuition and books.
    • Monday, August 26th, 2013
      It's sad that so many kids head off to college with no idea how credit card work. Many already have student loans and add on the burden of consumer debt. I agree most students should be able to handle a few hours of work. Tt can really be a big help to them financially now and getting a job after college.
  10. Monday, August 26th, 2013
    Hi Shannon!

    This is wonderful advice for the college kiddos. I've got a Senior this new school year so he's going to need this afterward. Actually anyone can use this advice. :)

    I'm definitely going to read the credit card part to my daughter because she loves to shop. I know this will be her vice when she's off to college in a couple years. The good thing is she's actively looking for a job and I'm definitely encouraging her :)

    Great tips Shannon! Hope you had a great Monday! Have a great week hon!
    • Tuesday, August 27th, 2013
      Thanks, Corina! Definitely pass it on to your kids. I know you've been working with your daughter and it sounds like you have a couple more years to influence her before she heads off to school. There is nothing wrong with enjoying shopping as long as she does it within her means and doesn't use excess student loan money (assuming she takes out loans) to fund her shopping sprees. You have a great week too!
    • Corina Ramos
      Friday, August 30th, 2013
      Ah yes and our conversation was right on time. I'm very proud of how she's planning and preparing but sometimes the little diva comes out and she wants to buy a whole store with $20 :).

      Happy Friday, Shannon! Have a great weekend!
    • Friday, August 30th, 2013
      Wouldn't be wonderful if we could buy out the store (or at least the things we want) with $20!! It takes time but you're showing how to make smart choices and that's all that matters. Have a great Labor Day weekend, Corina!
  11. Monday, August 26th, 2013
    We are on the same page today! I would certainly agree with getting a job or finding a way to earn extra money. Also, never, ever use your student loan money to buy non-educational related things. Going shopping with your student loan money will come back to haunt you.
    • Tuesday, August 27th, 2013
      I noticed that too, Kim! I think so many students figure they are already on the hook for that money they might as well enjoy the excess as they fit. I understand that mindset but they will regret it later when they spend years paying back their loans for things like ... an iguana. :)
  12. Monday, August 26th, 2013
    Excellent advice! I think it is important to get a job to learn how to balance a few things. The busier you are, the more likely you will do well in school! People often claim "they are focusing on school" so can't work. Hmmmm...Usually they find time to go out and party. While that is an important part of college life, I think balancing school, work and social teaches some great life skills!
    • Tuesday, August 27th, 2013
      I agree wholeheartedly, Leah! Some kids really do need to spend all their time on their coursework, but most find plenty of time for their social obligations! Fun is absolutely allowed and a part of the college experience, but school and work can be comfortably mixed in as well. They just have to want to make it work.
  13. Tuesday, August 27th, 2013
    Great advice Shannon. Although I didn't get myself into debt, I really didn't have much of a concept of budgeting, paying bills or supporting myself going into college. I just kind of winged it (is that the past tense of wing it?) I think getting a job is one of the best tips, simply because it forces to you to manage something else and gives you money that you earned and can make decisions with.
    • Tuesday, August 27th, 2013
      Thanks, Matt! I think most college students wing it. Some manage to make it okay and others do not. A job has so many benefits that it really makes sense for them to work at least a few hours a week. And it's a good start of the reality of what happens after graduation. :)
  14. Tuesday, August 27th, 2013
    Great advice, Shannon. I love what you said about not viewing a budget as a replacement for Mom telling you what to do. Kids who can keep their heads out of the clouds and remember that they are doing themselves a favor by staying out of debt we likely be tremendously relieved and excited about their financial situation come Graduation Day.
    • Tuesday, August 27th, 2013
      College represents freedom and kids will take any pent-up feelings of deprivation (real or imagined) from their childhood and go a bit crazy. Especially if they have access to excess student loan money or a credit card. Parents need to help their kids be ready to handle money on their own so when they graduate, it's to a better future without the additional burden of consumer debt.
  15. Tuesday, August 27th, 2013
    great advice shannon, although unfortunately I think that you're preaching to the choir and that most soon-to-be-college students are not reading pf blogs, especially if you were like me and didn't really even think about pf in that time of my life.:) However, hopefully parents WILL read this and have a serious chat with their kids about making them more financially independent. I think college is the beginning of where making good financial decisions sets you up for a pattern in your life either good or bad.
    • Tuesday, August 27th, 2013
      It's true; when we're that age we don't have much interest in personal finance! I agree that the financial decisions you make in college will play a significant role in how you make them ongoing and your overall financial well-being. The sad thing is kids don't realize this until years afterwards. It's up to parents to help kids see this and step in when needed.
  16. Wednesday, August 28th, 2013
    Great tips! I'm forwarding these to my twins who just started classes this week as freshmen. I was the first member of my family to attend college, so I had none of this guidance. I ran up credit cards, neglected financial aid, didn't understand the horrible affects of paying bills late....all ugly stuff.
    • Thursday, August 29th, 2013
      Congratulations on the twins starting college. How exciting and hard! :) Hopefully this tips will help the twins thrive financially - of course, I suspect their dad will play a strong role in them doing so.
  17. Thursday, August 29th, 2013
    I was really lucky in college to be surrounded by other broke scholarship students instead who wanted to get ahead, they were an inspiration and I learned how to be resourceful. You have all your life to live it up so while in college just get roommates, a bicycle and stock up on ramen, it is a small sacrifice compared to paying loans for decades.
    • Thursday, August 29th, 2013
      It really does make a difference in who you have around you. So many get caught up in wanting more right now instead of thinking about the future. They don't fully realize the impact of the decisions they make now.
  18. Friday, August 30th, 2013
    So true about keeping up with a certain lifestyle. Find friends who are also trying to keep expenses low. You don't need a new coffee table for your dorm room or apartment. You can use an upturned milk crate or get a used item from GoodWill. Ask me how I know this! lol
    • Friday, August 30th, 2013
      It's easy to get caught up in the mindset of instant gratification and not wanting to be left out. But those choices come with price that unfortunately too many college students don't realize until years later. Thanks for stopping by, Maggie. I appreciate it.
  19. Friday, August 30th, 2013
    This was amazing advice. Where were you when I was in college? jk Wish I had read this before venturing off on my own! Great post.
    • Friday, August 30th, 2013
      Thanks! We always have perfect vision in hindsight. :) Have a great weekend!
  20. Friday, August 30th, 2013
    I paid my college debt off years ago, thank goodness. We are now saving for our son's college education. We have 7 years to go, but still worry about it. We are telling him that he has to take on summer jobs after he turns 16 with a portion of it going towards his college fund, as well as working at least part-time while he is in college. We want to help him all we can, but he doesn't get a free ride.
    • Friday, August 30th, 2013
      We're saving for our girls' college education too. I think it's great that you're setting expectations with your son now. There is nothing wrong with him helping finance his college education either. I think it can be incredibly beneficial for them to do so. Thanks for stopping by, Donna!
  21. Friday, August 30th, 2013
    Hi Shannon,
    These are some great tips! I remember being very irresponsible with money in college. Of course, I had no responsibilities or major bills, so I could afford to spend lavishly. Looking back, I wish I knew better. These tips are great for helping young adults avoid financial trouble later on.
    • Friday, August 30th, 2013
      THanks, Corinne! It's very easy to get caught up in the spend mindset when you're college and not realize until long afterwards that it was a mistake. :) It's one of the many reasons why I'm working with my girls now. By the time they go to college, they will have the skills and tools to make better decisions (fingers crossed).
  22. Tuesday, September 3rd, 2013
    My kids aren't yet in college - still have four years for that - but we've already begun having financial discussions with them, about smart, and not so smart money decisions. Hoping that will help carry them through college!
    • Tuesday, September 3rd, 2013
      That's fantastic, Carol. Those are exactly the type of conversations you need to have with your kids. They won't know what your expectations are or how to think about money unless we teach them.
  23. Tuesday, September 3rd, 2013
    Thanks Shannon, I was so proud of my daughter the other day. She said to me that she didn't need a new laptop because the one she has works fine for school. She just got her first job and was saving up for a new one. It was a great back-to-school budgeting m
    • Tuesday, September 3rd, 2013
      That's great, Lindsey! She's catching on quickly and that is always a great feeling as a parent. I'm glad her new job is working out so well for her and already getting her to think carefully about how she spends her hard-earned money.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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