As college freshmen start to get a handle on their independence, missteps are inevitable. That’s particularly true when it comes to money.
College students, after all, are notorious for racking up credit card debt and relying on the financial safety net of home.
The rules are changing. New credit card laws aim to protect young adults from access to easy credit. If under 21 they’re required to show they have the means to pay their bills or have a co-signer.
With that and other financial realities in mind, The Associated Press asked seniors to share some of what they’ve learned during their college years.
Sydney Blount, 21
Emory University, Senior
Most important lesson: It’s essential to stay on top of your bank accounts. The bank I use at home is not located where I go to school, so I had to open up accounts at a bank in my area, which means I have four accounts to keep track of — two checking, two savings. It can get kind of confusing managing all those accounts, especially at the beginning of semesters when I’m doing a lot of spending on books, groceries, supplies, etc. So in order to stay on top of all my expenses I keep a checkbook on me. This way I always know how much money is in each account and I check my balances online daily to make sure the numbers add up. It saves me from overdrafting and any potential fraud because I catch discrepancies before it’s too late.
Best money tip: Make lists of what you need before going out grocery, clothing, or book shopping — any kind of big spending in general — and stick to that list! It will help keep you from buying things you don’t really need and potentially overspending because you have a list of everything in front of you. It’s also a good way not to forget important items.
Gabe Gladstone, 21
Emory University, Senior
Major: Political Science
Most important lesson: Get a credit card — your own credit card. When you are a student, it isn’t hard to sign up for a card through BofA or other banks. Once you graduate, it becomes a lot harder. Between buying books, gas, food and all the other expenses at college, using a debit card doesn’t make a whole lot a sense. Also, it is important to have a good credit rating and a limit that is higher than a few hundred dollars.
Also, you need to be on a budget. Before each semester, I work out with my parents exactly how much money I will spend per week. We predetermine which expenses will be in my budget (food shopping, rent, lunch, etc.), and which items are outside the budget (plane tickets, club sports dues). There aren’t any arguments over money, and I know exactly how much I can spend.
Best money tip: Keep track of your own finances. Lots of my friends have no budget and just spend money as they have it. Sometimes they get money from their parents, and sometimes their parents pay their credit card. Pay your own bills. Manage your own money. I opened up an investment account. I lost some summer job money in the economic downturn, but I learned a lot about how to invest.
But the best advice is try to be independent. Even if you are depending on an allowance from your parents, you should be the one keeping track of it. It is good practice!
Mary Hanna, 20
Rutgers University, Senior
Majors: Communication and Religion
Most important lesson: I have learned to buy what I need first and save what I want for when I have a little extra spending money. Like all college students, I’m just learning how to carry financial burdens. I was bombarded with credit card offers, but it was not until I entered my junior year that I thought I was responsible enough. Since then, my priority is keeping up with my payments. I’ve never missed a payment and almost always pay off my monthly balance in full. I also track all of my spending with online banking. When I can visually see how much money I’ve spent in the month, I can decide if I’ve made good financial decisions.
Best money tip: Do your research before buying anything. There is always a coupon, discount store or sale. I even search for coupon codes online because it is far too easy to overspend on the Internet. A little research is worth the amount of money that I save.
Daniel Kelly, 21
St. John’s University, Senior
Most important lesson: It’s essential to track your spending. I could not believe how much I spent on frivolous things. I’m no couch potato, but I literally spent $100 one month on chips and snacks! You spend a little here and little there and you assume you’re good; until you look at the balance of your debit account and realize what $10 to 15 dollars at 7-11 every few days can add up to.
Best money tip: I’d advise other college students not to spend extra money on food. Every university offers meal plans, and they are a cheap and efficient option. If you have one, save your money and eat on campus, a lot of groups offer free food at their events as well. Before you go out, visit the ATM and decide how much you’re willing to spend that night then leave the debit card at home.