Financial planning for a student is vital to successful completion of a college degree and ongoing success after college. The objective of this assignment is to evaluate four ways someone in my position could save money and budget. By planning finances carefully a student can avoid a pause in learning due to financial trouble and set themselves up for success after college. In the list provided below I will provide four tips I will use to navigate my way around the possible financial peril that presents itself to each student.
1. Track it. According to Lucy Lazarony of Bankrate.com, tracking spending for a minimum of two to four weeks can help a student figure out where their money is going. I agree. She presents the question, “Are four trips to Starbucks a week really necessary?” in an attempt to remind students the necessity of financial reflection. Lazarony quotes Vickie Hampton, a financial planner and an associate professor at Texas Tech University in Lubbuck, Texas, "They don't realize how much they spend on little things…[t]hat's the most common revelation." Lazarony adds what Mark Oleson, director of a financial counseling clinic at Iowa State University, stated, "Usually, just by tracking expenses, you'll start to curb expenses" ("Savings: Money management tips for college students").
As stated above, tracking spending can provide a student insight on what they are actually spending their money on. This provides valuable data that can then be analyzed and help determine what their priorities are. The downside of tracking spending is clearly the time it takes and its repetitive nature. I believe this is why a limited time frame is recommended in the article. However, I could see repeating this exercise from time to time and comparing those results to the original baseline.
2. Refrain from racking up credit card debts. In 10 Budgeting Tips for Students, Tamara Robinson writes, “The number one mistake students make in college is acquiring too many credit cards” (Mademan.com, 2010). While “charging it” can provide instant gratification or relief in time of need, many students go overboard while in college. This proves to be detrimental in the long-term. Let’s be honest, interest adds up quickly and I don’t know of any credit card that defers it until after graduation like federal student loans.
It’s just a bad idea in my opinion to use credit cards in any situation that a student can avoid. Ultimately this debt can add up and force a student to divert their academic concentration to focus on paying off the debt.
3. Manage student loans. “Don’t over borrow, and if you end up borrowing more money than you need, save it in a high interest savings account” says RC in his or her list of 25 Smart Budget and Money Saving Tips for College Students (Think Your Way to Wealth, 2008). I am not exactly sure why anyone would want to over borrow with student loans because unsubsidized and direct student loans do not defer interest until after...