Oh man, the things I wish I knew about money in college! I’m very lucky in that (in my early 30’s) I have completely paid off my student loans. I made my last payment about one year ago. I racked up a good amount of student loan debt by attending two different small private universities, and taking longer than 4 years to complete my degree. I received some good advice upon graduation – to pay my loans early and often!
I handled my student loan debt well, but I made tons of cringe-worthy financial mistakes in my twenties! As a 30-something, I’m on a quest to become debt-free and I almost don’t recognize the girl I was a decade ago. Knowing what I know now, here’s a list of a few things I wish I knew about money in college!
You don’t need a credit card!
I wish I could have told my college student self to avoid credit cards at all costs! I started young with credit cards and had one for almost every store in the mall, the beloved Target red card, and an American Express card that I used for textbooks and a few tuition payments. I blindly signed up for credit cards not considering how much interest rates were, or how long it would take me to repay my debts. I overused the cards, buying whatever I wanted, whenever I wanted. I only paid the minimums due and often missed payments or was late. The amount of money I paid in interest and late fees due to credit card use in college would probably make me sick today!
Live below your means
This is excellent advice for all stages of life, not just college. But the younger you can start living below your means the better. By not spending all of your earnings, you free up more money to save, invest, and give. If you need to use a credit card or a loan to buy something – you can’t afford it, and you’re living beyond your means!
Money doesn’t happiness
Or friends. Or love. Or self esteem. I tried to solve a lot of my college problems by using the above mentioned credit cards. Maybe a cute new outfit will help. Or offering to pay for dinner, or a round of drinks. Maybe if this course is too hard I can just blow it off and buy concert tickets this weekend instead of studying or asking for help.
You have options!
Student loans and eventually drowning in debt aren’t the only option for paying for college. You can work your way through college, maybe even going part time in order to avoid loans altogether. There are scholarships, grants and work study programs. There’s the option of military service in exchange for schooling. You can save up cash for college expenses in advance – maybe starting in high school, or even delaying the start of college until you have worked for a few years.
You should consider your options when selecting a school. Every school has a different price tag and more expensive does not mean a better education.
Also research and explore all of your options for paying off student loans if you do use them. Make sure you know the details, like that student debt will accumulate interest while in college. Can you start making payments early? Can you pay extra each month? Should you refinance your loans? Do you qualify for some sort of student loan debt forgiveness?
Personal Finance is cool!
No really! 😉 Seriously! Learn about money! Start reading books about personal finance, listen to podcasts, and share what you learn with your friends! You could be a millionaire someday, but only if you make the right (informed) choices with your money. Financial success is not dependent on your college major, grades, and what job you land after graduating. There is much more to it. Learn about money now so you can take good care of and enjoy every cent you earn in your lifetime!
Are you (or your kids) headed to college?
Open your mind. Do your research. Don’t collect credit cards, go shopping as a hobby, choose the most expensive school or refuse part time work opportunities because “that’s what everyone else is doing.” Graduating college debt free, or with as little debt as possible, will be one of the best gifts you ever give yourself.
What do you wish you knew about money in college?