New college students will probably read very little about personal finance. If they do read anything then they will usually read articles where the advice just seems too difficult to apply. Today I want to share some highly tactical tips for all new college students. These tips will help with financially surviving college and even graduating debt free. Before you get all nervous, do not worry because all of the tips in this article are realistic and easy to apply.
First I will start off by discussing the aspects of personal finance that I took care of as a new college student:
Setup Online Banking & Automated Finances
When I first entered college my income was really low. That didn’t stop me from automating my finances. I started off with biweekly automatic deductions of $50 from my paycheck that went right into an investment account. Since I love visual results I set up an online banking account so that I can track my progress and take care of my finances from the comfort of my bedroom.
Started A Retirement Account
The funny part is that due to my late birthday (I was 17 when I started college) my Mom had to co-sign the papers for my retirement account. The bank rep. kept on rolling his eyes because he was confused as to why this kid who had no traces of facial hair was worried about opening a retirement account.
Why was I so adamant about opening up an retirement account as early as possible? I once read that Einstein praised the power of compound interest. This made me realize that the earlier you start investing in your retirement, the longer you can have the power of compound interest on your side.
Opened a Credit Card
I know I’m going to receive a lot of grief from some of the older Studenomics readers for this one. After a stern lecture from my mother and a wait of a few months (they told me they would issue me the credit card as soon as I turned 18) I had my very own credit card. The limit was as low as possible. Since I feared my Mom more than I did the interest the credit card company could charge me, I was smart with the card.
Over the years I used the credit card to build my credit rating. I purchased items when I had the money already accounted for in my personal savings account. I also started making routine purchases with my credit card (phone bill, gym membership, etc.) to ensure that my credit limit increased. Then when my credit limit went up I started paying for group vacations with my credit card and making large purchases for friends that had the cash but didn’t have the credit card to order online. Today my credit limit is fairly high and my credit rating is great for my age.
Now that I have told you guys about everything I did to improve my financial situation before attending college, it’s time to come clean and admit to the many things that I wish I had done as a new college student:
Apply For Academic Scholarships
Okay I must start off by confessing that I never applied for any college scholarships out of sheer laziness. Then one day I read a post over at I Will Teach You To Be Rich that really opened up my eyes about scholarships. I realized that Ramit would probably want to hit me over the head with a laptop if he spoke to me when I was entering college.
After my first year of college I started applying for every single form of “free money” possible. Anywhere from scholarships to bursaries. I have received a bunch of paychecks for a couple of hundred dollars since then. The worst thing that has ever happened to me was I got rejected a few times. If you fear rejection then you will never grow as a person.
Start A Side Business In College
Now that I look back I want to kick myself in the butt for not being more ambitious in terms of giving entrepreneurship a shot. Sure you could earn a more stable income by working for someone else but there’s also a reason God gave you certain skills.
There is literally hundreds of ways you can start a side business in college. Since I promised you guys a highly tactical article, I will list the easiest side businesses to start in college with little funding.
- Landscaping services. Cut grass in the summer, rake leaves in the fall, shovel snow in the winter, setup the yard the in the spring. Very little startup funding is required. Marketing consists of putting up ads in your community.
- Start a blog. If you have some extra time in your day and decent writing skills then this could be a good fit for you. You won’t make a lot of money but it’s a profitable hobby.
- Tutoring business. My friend worked for his college as a tutor and decided to branch off on his own after a year. Put up a bunch of flyers and spread the word any way you can about your tutoring services. Just remember you must truly know your stuff if you want to teach others.
Now it’s time for me to share with new college students some additional advice on how to save money in college. Please remember that this is as honest as it gets and I will never share advice with you guys that I wouldn’t follow myself.
Entertainment On A Budget
Partying in college seems like a taboo subject on many personal finance blogs but lets be honest, going out is apart of college life. Whether you meet up with your girlfriend, go for drinks with other students in your major, or just meet up with a few close buddies to hang out and drink, all college students do something for entertainment. I will not tell you guys to not party at all because you would probably close the article right about now while thinking this blogger guy is full of garbage.
It’s completely unrealistic to try to save money by telling yourself that you will never go out when you go to college because that won’t happen. The trick to surviving through college financially when it comes to partying is to consciously plan your spending on entertainment. You must wisely pick your nights out to ensure that they will fit within your budget and more importantly, your goals. When you do go out it’s important that you take advantage of the many money saving options: go to places on campus, use your student status for discounts, consider staying in at some one’s place, or use online resources to find hot deals in your city.
Making Money In College
If you’re similar to how I was as a first year college student, meaning that you don’t have much interest in entrepreneurship then the best option is to try to find work around your college campus. You will be surprised when you enter college and see how many work opportunities are available. The reason working around your college campus is worth it is because you will network with other faculty (students and even professors) and you could potentially build a reputation around campus that could pay dividends for many years to come.
I won’t leave you guys hanging by just telling you to work around your college campus. Allow me to tell you exactly what jobs to look out for around your college campus:
- Tutor (prove that you are extremely knowledgeable at something)
- Department Assistant (chance to work with professors),
- Teaching Assistant (meet many other students),
- Lab Assistant (work with even more professors).
- Any job in the school gym (best place to meet older college staff that is looking for help with fitness).
Transportation
I absolutely feel the need to stress the importance of saving money on transportation when I talk to other college students. The fuel for my passion on this subject is that a good friend of mine just purchased a BMW- with his life savings. Sadly the main reason he purchased this very used and very old BMW is to show to other college students that he isn’t middle class. Instead of using that money to help his family move into a bigger apartment unit he used all of his savings to pay for a car.
Before this turns into a rant let me get to the point- if you stay at home for college then try to find cheap methods of transportation to get to school. I know that the bus may take longer, it might be full of weird strangers, and it may seem like a major inconvenience at times. However, the money you save will put you in a great financial position for you when graduate from college. For me taking the bus has allowed me to travel twice a year. What will saving money on transportation do for you financially?
Advice For Parents Of College Students
After readings hours upon hours of personal advice for college students I came to a conclusion: most of the advice is fairly judgmental/ignorant. When you sit down with your child to help them with a budget please remember that you were once a 20 year old college student. Don’t tell your kid that they can save money by never going out or by cooking their own food everyday.
After stressing all month long for final exams, we all deserve to go out for a beer with some friends. I’m sure you did too when you were a college student. I have found that you need to be down to earth and not come off as a preacher with our generation in order for your advice to be taken seriously.
Now it’s time to turn it over to you guys: What did you before entering college that you are most proud of? What do you wish you did differently?
photos: Jeff McGrath, Darren Hester, largeprime, Paula Aguada, humbnerceo, labit, Dennis Kruyt, foreversouls
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great post. I appreciate you being realistic esp in terms of going out. Failure to account for realities such as this is a major oversight, and will break a budget. However, saying that it’s ok to go out and have fun every once in a while if you are prepared can do wonders.
Great tips! Very practical. I think taking the bus depends on what area your in. I would not recommend the Dallas bus system to anyone. It wears you out, and the lack of energy can effect your study habits.
Some excellent tips and a great blueprint for any new college student. There is of course the other additional issue of generally being frugal.
A couple more notes about saving money partying in university…not that I’m a total lush, I just agree with you that – HELLO – everyone parties in university. And if you don’t, you’re doing something wrong.
1) If you’re planning to make it a big drinking night, make your first two beers the good quality stuff and after that switch to something cheap. After a couple beers you really can’t taste the difference anyway. Or if you don’t mind drinking the cheap crap all the time you can do that too. It helps to put of developing refined tastes
2) Pre-game. Drinks at clubs are way expensive and since you don’t usually head out until at least 10:00 anyway, might as well gather at someone’s house to get your buzz going. That way you can probably get away with buying only one drink at the bar.
3) House party. Bars are expensive – from the drink costs to the cover charge to the transportation to the tips. Convince your friends to hang out at someone’s house and drink cheaper booze from the liquor store. If you are concerned about meeting people you could always ask everyone to bring a guest or two who is new to the group.
Wow, do I sound like a tight wad drunk or what?!?!
@WM Wow you got this all figured out! Thanks for sharing those tips. Pre-game is important but it often leads to disasters lol. Any stories to share?
I couldn’t agree more about the pre-game advise. Only thing I would add is to be honest about you financial situation with your mates so you are all on the same page when you go out to club.
Avoid people who think they are high class and only want to go to fancy clubs or drink premium alcohol…
A friend dated a girl like this in college and it broke him financially. Better to be honest about who you are and manage other peoples expectations instead of destroying your financial backbone and picking up expensive habits…
Good stuff, Studeonomist. Definitely a list of things that I wish I had done back when I was first starting college. Although, some of them I already had done (getting a credit card) and others would have been rather hard, given when I was a student (setting up an online account). Still, the earlier you get started on all this, the better.
Buy a prepaid phone…trust me…it’s worth it! I had a contract phone but wasn’t really using it because I have a land line in my dorm. I switched to NET10, which was given the tittle of BEST OVERALL VALUE. It’s easy to use and so so cheap to buy. Check out their phones at KMart or even online. Good luck!