Wednesday, September 09, 2009
Ahead of the Class: Money Lessons for College Freshmen
Bargainist: "Many college freshmen think they’re heading off to a university to take classes on psychology and literature, but one of the first lessons they need to tackle is budgeting and saving money. And it’s best if you don’t have to learn these money lessons the hard way. Want to get ahead of the class? Here’s a crash course in personal finance."
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7 comments:
Something else often forgotten while shopping around for the best deal on something is whether you even need the item (or service, etc.) in the first place. I was shopping around for internet service at home and not finding much better than $40 a month when I started to think about it - I really have no need for internet access there, I have email through my phone anywhere, and I can use the campus wireless when I'm at school. There's no need to spend $40 a month for something I'm barely going to use, and that $40 a month is nearly $500 a year.
this list that they gave was some what things that you should all ready know about and should not have to told about. i knew this form a young age about this things my parents taught me this and made me magian my own money.
While I can respect most of the lessons offered in this article, I believe that a money-conscious and responsible college student can manage a credit card. I carry a student credit card with a monthly limit of only $250 on it and use it very consciously.
A few tips to student credit card holders:
1. Spending over half of your total credit limit can have a negative effect on your credit score. I use my card every month in order to show activity, but I never exceed $125 in purchases on that card in any given month. (Thanks to my local bank's business accounts manager for this tip)
2. When the bill comes, pay off the balance in full. Keeping your balance clear will help ensure that you never start to rack up any type of debt.
3. Related to this, don't spend money that you do not or will not have. Credit is simply paying for the items early; you still have to pay eventually.
Since I am very cautious with my money and especially with this credit card, I am not afraid of overspending my limit (thus incurring exorbitant fees) and therefore feel that a card can be an effective way of developing a line of credit for a student if managed properly.
I really wish I had this article when I went away to college. When I first moved into my apartment my father and I set up an amount of money that I would get per month. Other than that my father does not deal with any of my expenses. So I had to learn very quickly how to budget my money. Students have to change their way of living when they move out on their own. The biggest lesson people can learn, like Tom explained, is that they don't need all the comforts of life. Figuring out what your basic living needs are is the best thing you can do.
I feel that most of these things seem pretty obvious except, maybe the lure of credit cards. I know that some people can't wait to get one when they're younger but, hopefully by the time they're in college, they should be able to be responsible enough to know that they shouldn't at the moment. I agree with Tom: cutting down on unnecessary things or luxuries will probably save the most money.
It is important for college students to think about finances, even if your parents are covering everything. In just a few years, we will be out in the real world needing to worry about paying for food, rent, clothing, and all the other necessities on our own. College is good practice for this if your parents are still helping you. Even if you aren't paying for anything, it is at least important to a) set a budget for yourself and b) think about how much everything actually costs. As far as credit cards go, I would personally stay clear, because I know how easy it is to spend money that you don't actually have, and a lot of us will already be in a good amount of debt when we graduate.
I prefer to have a debit card rather than a credit card. With a credit card i know i would buy stupid things i don't need and then my parents wouldn't pay for it and then i'd have awful credit. where as, with my debit card i am very selective with what i spend because i have limited money. I spend on only things i absolutely need. I also wouldn't spend the money for internet or cable, for that matter. I also agree with Robert. Things like this shouldn't have to be told to us. It's not rocket science.
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