Financial Sense 201: Going Beyond the Classroom and Making Smart Financial Choices Now

It is not possible for every student to graduate from college debt free. However, it is crucial to make smart financial decisions while still in school to limit the financial burden as much as possible, as this will have a direct and lasting impact on your financial health for the rest of your life.
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Tom Hanks said, "While I was (in college) I was exposed to this world that I didn't know was possible." College is definitely a time of discovery. We're exposed to new ways of thinking and begin to form our own ideas about the world. Of course, it's also a time for fun. College students are straddling the line between still being young and being faced with adult decisions.

Straddling that line between teenager and adult can be difficult to manage for some students. College may be their first time away from home, which adds to the stress of managing a budget, paying bills and making decisions that will directly impact their future. For many, it is tempting to rack up debt now and worry about it later. College should be fun, but it's also vital that students start thinking about their future and what life will be like after graduation.

Vikki Feggulis, a 2013 graduate of Utica College, said that while in college she watched many of her friends be carefree with their money. "It was really tempting to do that too, especially with the stress of school mounting," says Feggulis. "But I recognized that working hard, getting out of school as fast as I could and being mindful of my finances would put me in the best spot upon graduation."

It is not possible for every student to graduate from college debt free. However, it is crucial to make smart financial decisions while still in school to limit the financial burden as much as possible, as this will have a direct and lasting impact on your financial health for the rest of your life.

Maintain a Source of Income

Even with loans, grants, scholarships, or all of the above, some students may still need additional sources of income while in school. Getting a job will not only provide some much needed income, but could also give students an opportunity to beef up their resume and get some real life experience that will help them land their dream job upon graduation.

Find a job that you know will be flexible with your class schedule. Working at night or on weekends will allow you to attend class and leave time for homework. Students should also make the most out of Christmas and summer breaks, working as much as possible so they can save money for the rest of the school year.

Colleges and universities offer a number of opportunities to work on campus. Students can serve as research assistants, clerical assistants, tutors and more. Some of these positions may even allow students to earn credits toward graduation and get paid. Looking for a job related to your major will increase your chances of getting an internship and send you to the top of the list when you start applying for jobs after graduation. Another added bonus to working on campus is that most of these positions find it perfectly acceptable to complete school work if you have down time.

Feggulis says, "I've been working at least one job at all times since I was 15. I (worked) every holiday weekend, winter break and summer break." She also had a number of jobs that helped ease the cost of her education. "I took a paid internship in NYC and... held an internship position at a local radio station, which was related to my major and allowed me to make extra money. I also tutored and was a resident assistant, which covered my housing costs and provided a small stipend."

Use Credit Carefully

A line of credit can be great when you're strapped for cash or want to earn rewards for your purchases; however, credit cards aren't the ideal source of funds while in school. It's easy to wrack up a large balance, but not so easy to pay it off, especially if you carry a balance. After graduation, when payments on student loans begin, a credit card payment can be an unnecessary burden.

If students do use credit cards, they should learn to manage them responsibly and use them for the sole purpose of building their credit so they have good to excellent credit upon graduation. Students should never use credit cards as a source for paying their tuition. Student loan interest rates are 2-4 times less than credit card interest and credit cards also charge, on average, a convenience fee of 2.62 percent to process student loan payments.

Before opening a credit card, students should understand how credit cards and credit scores work. Most importantly, they should have a firm understanding that whatever you charge on a credit card has to be paid back, and it can be very difficult to pay back large balances that have a high interest rate.

There are a variety of trusted sources that can provide consumers with information about understanding credit scores. Wells Fargo has a comprehensive resource section for learning about credit scores and building healthy credit. Pathway to Financial Success and Cash Course also offer information that is specific to students and can help them shape healthy financial habits.

If a student does decide to open a credit card, there are credit cards designed specifically for students. Determining which student credit card is best for you will depend on factors such as your credit score and what kind of perks or benefits you want. Check out the guide for the First Time Credit Card Owner when you think you're ready for your first credit card.

Along with saving money, it's equally important that young adults understand the importance of their credit score. Most college freshmen haven't had the chance to establish a good credit history and may not even understand what it means. Using services like CompareCards' Credit Concierge, will provide them with the necessary information for learning about what's included in their credit report and how their credit score impacts their ability to make purchases and obtain loans.

There are a number of ways young adults can establish good credit. Having credit cards, utilities, or loans in their name and always paying bills on time is the first step in building good credit. Banks and credit unions also offer credit-building loans that allow students to "borrow" against money that is already in their account. This allows them to build credit without the risk of incurring large balances.

Be Budget Savvy

Remember, budgets and coupons aren't just for parents. College students typically have a small budget, but also have a relatively small number of bills to pay each month. Students should calculate monthly expenses versus how much money they have available through work and/or loans. If there isn't enough to cover the bills, students should focus on how they can save money.

Buy Generic

A study from economists at Tilburg University and the University of Chicago revealed that people who buy generic brands of products actually score higher on IQ tests. That indicates that students who are smart enough to get into college are prime candidates for saving money by buying off-brands instead of paying premium prices for well-known brands. Generic products typically contain the same ingredients as the name brand products and lose no value or quality.

As reported by CNN, "Nine times out of ten, pharmacists and doctors will buy the generic version of aspirin rather than a brand-name like Bayer. Likewise, professional chefs prefer store-brand sugar, salt and baking powder instead of brand name ingredients."

The savings on consumer products across the board can be dramatic despite the fact that the products or their key ingredients are virtually identical.

Cut Down on Textbook Expenses

The reason that textbooks are so extraordinarily expensive is because most of them are printed in rather small quantities. They are sold only to colleges and universities and, among those buyers, may only appeal to certain campus bookstores where professors specifically request them. Publishing companies also know students have limited options and are almost locked-in, because choosing not to buy the book would likely cause the student to fail the class.

That makes the market for used textbooks a great resource for students who are shopping for bargain prices or want to resell their own books for fast cash. Most campuses operate their own book exchanges where you can find books in great condition at a fraction of the price. You can also find ads on campus buildings or dormitory bulletin boards. Some websites where you can buy or sell textbooks include:


Another way to save big on textbooks is to use digital e-book versions instead of hard copies that weigh down your backpack. Many educational institutions are converting to this more environmentally-friendly and less costly format. Check with your college and/or professors to see if there are e-books or open-source textbook options available. Open-source textbooks can be printed and bound for about $40.

Take Advantage of Free High-Tech Financial Tools

There are tons of great tools, apps and programs that can be helpful in managing your budget and saving money, and many of them are free. Websites like, for example, can help you create and manage your budget like a pro, while also including expert information about how to be a wise saver and investor.

Most major banks have free apps that you can download to enable you to keep track of your accounts or pay bills from a smart phone or other Wi-Fi device. Online banking options usually offer lower rates and fees than traditional brick and mortar banks. You can also set your account preferences to take advantage of text and email alerts when your payment is due or when you are hitting your spending limit.

There are even some banks that reward students for doing things like paying their bills on time, so be sure to shop around and find a bank that matches your goals, while helping to save you money.

Always Mention You're a Student

Just about every single merchant, service, or product offers a discount for students. This can result in discounts on food, clothing, entertainment and more. Mention to the merchant that you're a student to make sure you receive the highest discount you can. Most require you to have a copy of your student ID card on hand, so make sure you always carry that with you.

As students work hard in school and hopefully work hard at making financial choices, they can learn more than just what professors are teaching in the classroom. While it might seem like economics are only for economic majors, that couldn't be further from the truth. Students who take charge of their financial education will be in a better position to meet their financial responsibilities after graduation.

The economy and work force can change quickly, so it's important to continually monitor what salary and employment projections are expected for your intended field of work. As you move toward graduation, talk with advisors and use resources such as Payscale's yearly College Salary Report to determine what you might expect to make after graduation.

Students can also continue to look for additional grants and scholarships. Some grants and scholarships are renewed yearly, or are specifically designed for students who are already in school.

To prepare yourself for post-college life, the most important things you can do are exit college with as little debt as possible and have good credit. The Fair Credit Reporting Act requires each credit reporting company (Equifax, Experian and TransUnion) to provide consumers with a free credit report once a year. These reports will provide details about your report, outstanding debt, credit inquiries and more.

Credit monitoring services such as Credit Concierge can help you understand your credit report and make sense of what is positively and negatively impacting your credit. This free credit monitoring service allows users to track and monitor their credit profile.

This extra step will set students up for a healthy and robust financial future. As they look forward to graduation and starting a career, they will be equipped not only with book smarts, but also with the financial skills needed upon entering the real world.

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