Tips From an Irvine College Consultant: Dollars and Sense at College
Students who are excited to go off to college this fall will be primarily focused on how to manage their academic workload, make new friends, and do well on their exams. What most freshmen don’t think about is how to manage their money. Some students will have funds provided by their parents to help support them while they’re concentrating on their studies while others will have income from a part-time job.
Either way, most college students don’t have experience with financial management. The following tips from an Irvine college consultant can help students manage their money so they can focus the majority of their energy on education.
1. Get out the calculator
Incoming freshmen are encouraged to get out the calculator and their bank statements prior to leaving for college and look at how much money per month they expect to earn and spend. For example, if a student has secured a part time job at a coffee shop on campus, they should consider the following: $8 per hour X 15 hours per week =$120 to spend before taxes. Don’t forget to factor in taxes! If tuition and fees are being funded by family or a scholarship, a student will have around $100 per week on miscellaneous activities. A movie out with friends costs about $13.50; a cup of coffee to keep going through a long study session costs about $1.50.
2. Open a bank account
Many students who started working at a part time job at 16 already have a bank account. Those who don’t should open one as soon as they turn 18. Opening a bank account generally requires a minimum of $50 be put into savings and checking. Also consider the importance of choosing a bank that has an ATM and branch location located either on campus or near campus. Students who are attending school out of state are reminded that not everything is national and they may need to open a second account if they’re attending school out of state. Remember to check the account at least once a week to determine how much money was spent and how much is left. Students with an overdraft in their account could find themselves subject to any number of fees and penalties (READ: “5 Things to do Before You Go Away to College”).
3. Credit versus debit
Remember to think about the difference between a credit card and debit card when paying for miscellaneous living expenses. Students are responsible for paying their credit card bill on a specific day each month while debit takes money directly from their checking account. It’s tempting to put a lot of items on a credit card and pay the minimum fee, however, this can leave students in a bad position when they graduate as they may have excessive debt but no full time job to pay it off.
4. Additional earning
If having $120 per week for pocket money simply isn’t enough, one option is to extend work hours. However, many college freshmen will already struggle to deal with academics and won’t want to choose this option. Students who need extra work hours should consider working on the weekend, during breaks, or during the summer when their educational commitments are not as strict (Read: “Unpaid Internships: Weighing the Benefits”).
5. Practical ways to save
New college students should weigh the difference between similar expenses to see where they can save money. For instance, a movie out costs about $13.50, while a Redbox movie costs about $1.20. A brand new, shiny chemistry book costs around $100, while a used chemistry book (with a few pencil marks and highlights) costs around $75.
These are just a few basic examples, but it’s important for new college students to remember that every dollar adds up and that the old adage that “a penny saved is a penny earned” really holds true. Regardless of a student’s circumstances, it’s important to consult somebody experienced in finance to help manage money prior to going off to college in an unsupervised financial situation. Too many college students graduate at 22 to find they have far more debt than they can handle, which makes the early-career period more difficult. There’s more than just one type of intelligence. Being smart with money is one of the most valuable skills of all.
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