This past weekend I traveled to my alma mater, Colorado State University. My old stomping grounds changed, as new buildings and flashy designs populated the sprawling campus. But despite the changing landscape, it felt familiar.
There are countless memories — exceptional and horrific — that span my 5 years of life in Fort Collins, Colorado. One of the most poignant and relevant were the many financial mistakes made during my tenure. It was here that I started a crazy financial roller coaster that led me to nearly $40,000 in student loans and debt. It was here that I first noticed a panicky daydream where I would be sucked into the ground and have no way out of this horrific financial hell.
After reflecting on my visit and time in Fort Collins, I realized that I’ve changed — like the campus landscape. I’ve learned a lot about myself and some financial lessons along the way. Today, I wanted to focus on 5 key aspects that college helped me understand about personal finance. What I would’ve given back then to know this information now!
1. Friends influence frugality
Unsurprisingly, the people you surround yourself with greatly influence how you spend your money. If you’re trying to be a more frugal person, it’ll be vital to find friends that support and approve your way of life. It can be radically different from the party, work-hard-play-hard mentality at some campuses. Additionally, if you attend a private college/university, you may be around people with larger bank accounts. It’s important to reflect on who you are and what your inner compass is telling you about finances.
2. College is expensive, put extra funds in a savings account
While I was fortunate to have parents that paid for college, I didn’t budget well — if at all. My parents gave me a little spending money and I did exactly that, spent it! It wasn’t “saving money.” I burned through the money. From expensive dinners to luxury road bikes, I was a faux-millionaire with an unquenchable need to spend. Much of this could’ve been solved or stifled with a good budget. And it’s never too early to make a budget! College is the ideal time to figure out these important “adult” issues, as you should have money coming in and out. If you ever have extra funds — whether you’re the campus pot dealer or have generous parents — stock your funds away for rainy days.
3. Question your student loan “award” unmercilessly
Student loans are often called “awards” after you apply for and fill out the FAFSA. Unfortunately, these are not anything of the sort. Student loans are powerful debt instruments that are issued by the federal government, with changing terms and interest obligations. These are complex, dangerous, and can spiral out of control rapidly. With any decision to take out student loans you need to be unmercilessly skeptical and defensive.
4. Avoid car-friendly/needed campuses
I sold my car over the summer. It’s been a difficult adjustment, as the current university — Iowa — isn’t particularly bike-friendly. Wherever you intend to go to school, consider public transportation and (wide) bike lanes. You should be able to receive free transportation on buses with a student ID. Look out for bike racks, too! Ideally, you’d be able to sell or avoid buying a car altogether.
5. Find “easy” jobs and double-up on work
College campuses have tons of jobs for students. If you’re an exceptionally busy, motivated student — and I hope you are with what college costs — it’s important to find a job that allows you to double-up on work. For instance, you could get a job as a server that pays very well, but that could make it difficult to take full semester course loads. Thus, you sacrifice one part of your life for another. An alternate option — especially if under a time crunch to graduate — is to find a desk job at a residence hall or an office assistant position. Oftentimes, these jobs have downtime and allow you to sneak in some study time. Now, you can be efficient and make some money in the process. What could be better?!
sbrooks52111 says
Great tips!! And so so true. If only we were frugal during college…I can only imagine how much better off we would be. My little sister is in college and while she’s decently responsible, it’s crazy seeing her buy designer jeans with her whole pay check from her part-time job, spending money on bars, buying lavish gifts for her bf, etc. I totally was like that, too – college kids sure have the life LOL
Fig @ Figuring Money Out says
Great post! I loved the first point about friends influencing frugality because this definitely happened in our friend groups. I watched way too many people overspend and end up with nothing at the end of every semester when their “free” student loan money ran out. Everyone wanted to do the same things their friends were doing whether they could afford it or not!
Sam Lustgarten says
Fig,
The pressure, especially if you have big-spending friends, can be enormous. You’re right that people tend to overspend with student loans, but that’s also a consequence of the financial aid offices that don’t properly help students budget with that aid.
Sam
Kayla @ Everything Finance says
Tip #5 is one that I took advantage of as much as I could, but at times I needed a break too and would use my “down time” at work to watch Netflix, haha.
Adam says
Great post! Looking back, I can say that all of your points are spot-on. Especially the student loan “awards”. I finally figured out in my junior year that my efforts to cut back my expenses were working when I realized my student loans covered way more than I needed to pay tuition. Instead of taking the extra money in a check like everyone else was doing, I got a job and rejected the loans that I didn’t need. It made college tough and I missed out on a lot but I cut back my loans by tens of thousands, which I am more than grateful for now.