Posted by Lending Club :: September 9, 2008 @ 1:27 pmAh, fall. There is something refreshing about fall. For students it signals the beginning of a new school year, and for new college freshman, one of the most significant moments of your growing up: Buying stuff on your own.
Yes, gone are the days of a furnished home courtesy of your parents. And fresh fruit and a full pantry at a moment’s notice? No more. Need laundry done? I hope you have some quarters.
Speaking of quarters, going to college without knowing how to handle your money is a disaster waiting to happen. Before you charge that new $2,000 laptop read my 7 rules of money for new college students...
1. Have ONE credit card.
Yes, just one. You don't need any more than one to build your credit.
2. Get a cushion. No, not a beanbag!
Overdraft fees can kill your spirit faster than any sorority girl rejection. Always keep a minimum of $500 in your checking account. This takes mental discipline. Once you've got that $500 in there, forget about. It's like if you've got $650, you really only have $150. Start doing this now.
3. ABU - Always Buy Used
Craigslist and eBay are your friends. Need I say more?
4. Take Daddy's Money, but Remember This...
If your parents are helping you with college, that's great. They've worked hard to help with your schooling, and you should without a doubt accept their help. Just remember that someday (i.e. graduation) the financial help likely should and will end.
Nothing makes you feel more grown up than stopping assistance from your parents and being financially independent.
5. Always be Cheap. You Can be Frugal Later!
Not only is it socially OK to be a cheapskate during your college years, it's often the only way to get by. Embrace your inner cheapskate. Your future, smarter self will thank you for not racking up the credit card balance.
6. Remember, Money Can't Buy Friends
Sure, having a killer car is nice. Always picking up the tab will surely please people. However, once you max out your credit card or your trust fund runs out, will you still have your entourage?
Don't use money to impress anyone in college. You'll just look stupid pretending you somehow "earned" enough at your unpaid internship to buy that 50-inch plasma TV.
7. Set Up a Simple Budget
It doesn't need to be fancy. You can even do it on a napkin in the cafeteria. List your bills each month, and budget out your other expenses. Look at your spending each month and stick to your limits!
Now, I'm off to have a Cup o' Noodles. All this college nostalgia is getting to me...
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14 Comments
That's great advice, man. Every college student should read this!!
Yes, as a financially concerned female college student, I live in
fear of that day where I am rejected by a sorority girl.
I don't think you have used the term "Frugal" correctly here....
Really? How so? Can one not "be frugal"?
"Always be Cheap. You Can be Frugal Later!" frugal means cheap.
You did use frugal wrong. Frugal means "careful with money" or
"cheap/inexpensive."
#5 gave me pause at first too but then I took it as a subtle play
on words. The two words are synonymous at a basic level but the
vibe of their usage, their tone, is different. It's virtuous to be
"frugal" but to be "cheap" is more of a harsh thing; like to call
oneself cheap is to be harsh with oneself but to call another that
is to be derogatory. So, the point can be taken like "be harsh with
yourself (about saving money) now; the time in life when you'll be
able to be more graceful about it will come later."
smart tips. common sense, really. good job. i would add one thing,
however. i would mention to the reader that more than one credit
card is actually not conducive to a healthy credit
rating. i'm sure this doesn't apply to every situation but to the
best of my knowledge the more credit you have available, the weaker
your credit rating may become. this is because creditors must take
into account the amount of debt a person could potentially incur
should they wish to max out each source which in some cases may be
much more than the individual is able to repay in a timely fashion.
i have to say i found this a bit ridiculous. i was hoping for some
scrappy tips but this list looks like it was made for rich kids. if
you have the money to be paying for a "killer car" and be picking
up the "tab" all the time (did you know that actual poor college
kids don't go out to real restaurants, right, they just get cheap
chinese food and pizza or groceries?) then you're probably fine for
money. and recommending a $500 cushion? us poor college kids do not
have $500 just lying around. we also do not have to worry about
taking "daddy's money." we also could never make the mistake of
buying friends, because we do not have money. we
also would never even consider having two credit cards, because we
watch our money so carefully we could never overspend--and besides,
we don't shop often enough for the bills to rack mysteriously up. i
go to an extremely expensive private school in an extremely
expensive city and all of these tips made me shudder. they are
clearly tailored for the wealthy end of society.
yay for people like spadoosh, like I said above, i completely
agree.
Great article - that I will share with my readers.
Overall, good advice...but I would disagree with the first tip. I
would say have NO credit card. Credit cards (even one0 and
borrowing are a great way to start your financial life on the wrong
foot. I strongly suggest reading "Total Money Makeover" by Dave
Ramsey. It talks about real fiscal management.
I have to agree with spadoosh. $500 cushion that you pretend
doesn't exist. Well, I would love to do that and have it even
higher, but rent needs to be paid and the occasional book cannot be
found in the library. I go to an extremely cheap state school in an
extremely cheap city, but unfortunately the job market here is
absolute bunk and I haven't been able to find a job despite months
of intensive searching. Thank god for cheap households, Smiths
cards, and boyfriends who are salaried and can't be fired due to
contracts.
As a full-time college student, I can safely say that these tips
are useless for me and every other college student I know. I have
never had the luxury of even one credit card, have never been able
to have $500 in my bank account at once (I have $300 at the most,
and 100% of it is for bills/expenses, no way I could have a cushion
of more than about $20), and I basically have so little money that
the rest of the "tips" couldn't possibly apply either. Now, not
everyone is as flat broke as me, but I agree that this was probably
put together with the more "well to do" students in mind who
obviously don't really need much advice.