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4 Money Tips for College Kids

August 5, 2016

Although it is still definitely Summer here in the state of Utah, Fall is right around the corner and I am so excited. Fall is my favorite season for lots of reasons: puffy vests and clogs, hot chocolate, college football, crisp air, changing leaf colors, and going back to school to name a few. I haven’t gone “back to school” in years and, in fact, my last return to full-time school was 11 years ago but I still love it. I love the concept of fresh starts and clean slates, new things to learn, new clothes, new notebooks and things to organize:), a return to discipline and routine after a casual summer, new people to get to know. I’m not going back to school this Fall BUT I do have some younger friends who are heading to college in a few weeks and this post is dedicated to them. Below are some tips that will hopefully help you not make the same mistakes I did:)

  1. Have a budget! I know that you’re thinking that this is one of the most boring pieces of advice you could receive but hear me out. When you go away to college it is the first time in most of your lives that you’ve had to pay for ALL your things – groceries, gas, entertainment, eating out, stamps, trips with friends, clothes. Even if your parents are still helping you out or you’re getting student loans I dare you to treat that money like it’s your own and to MANAGE it. It’s cool to manage stuff. You’ll way overspend if you don’t organize your monies in advance, so, make your plan. On paper. Yes, paper. Then get a tool – I super recommend YNAB and especially for you because it’s free for college kids and start using it. For some general steps on getting started budgeting check out this post.
  2. Get comparisons but don’t compare. When I was in college I honestly didn’t know what “normal” was for groceries. And so I sometimes spent as much in one payperiod as I do now in two which was pretty funny because I was just scraping by back then. Is $300/month normal for your peers? I don’t know but I doubt it. I would recommend you poll people in your demographic, people who have lived in similar setups (apartment, dorm), people who worked thru college if that’s your fortunate reality (not being sarcastic – even if you don’t NEED to work because you’ve got scholarships or paying parents, I would really encourage you to work. It’s good for you and you’ll handle school better with more on your plate), etc. Get the ranges of what they spend on things like groceries, gas, entertainment and then pick a spot within that range that feels realistic. As you start spending and tracking your spending (critical – do it!) you’ll start to see what your reality is. Maybe the first month you really only will spend $90 on groceries but the next you spend more like $140 and the next $130 and the next $140 again. At this point you can calculate averages and make that your new monthly budget (or bi-weekly, I think 2-week budget windows are MUCH easier to stick with) for that category. Here’s where the don’t compare comes in: once YOU have determined what YOUR realistic budget is for your categories, stick to them! Don’t look around at the trust-fund kids who can spend $300 in a single grocery shopping run and compare your situation to theirs. They’re totally different situations and comparing two different things don’t work none:)
  3. Stay away from credit cards. I haven’t been a new college kid since 2000 but I doubt credit card companies have stopped targeting college kids. You’re going to start getting approached to sign up for lots of credit cards and they’ll promise you all kinds of things to sign up – free tshirts and other types of swag, low or no intro interest rates, balance transfers, etc. Don’t fall for it. It is a total trap especially when you are in a stage of life when income is intentionally low because YOU’RE LEARNING and preparing to make lots of money. If you get credit cards at your ages you’ll almost guaranteed start to put things like car repairs and vacations and new clothes on the card and then you take this habit and the yoke of debt with you into post-college. At some point you may want to or need to build credit but I super recommend you wait until you have a firm foundation of budgeting habits and living within your means.
  4. Save something from every paycheck. Even if it’s $5 or $10, the habit will go a long way. Put it somewhere not easy to get to and don’t touch it. It’s a reminder that you don’t have to spend everything you make and a reminder that you have a great future for which you are saving, instead of spending everything in the moment. It’s good to “live in the moment” in so many other ways, but if you adopt that in your financial life you won’t have much of a financial future.

You can do this! Having a handle on your finances will allow you to have the richest possible college experience AND set you on a path for a happy life, free from debt.

P.S. Do you have specific questions about budgeting/money in college? I’d love to hear them! Shoot me an email or comment below.