5 Money Management Tips for College Students
Three weeks into the new year, and millions of Americans are still clinging to the resolutions they made on Jan. 1. Many of us are pledging to create better habits, while others are committing to ditch bad ones. One dangerous habit that many college students fall victim to is accumulating debt. That’s why this week I caught up with financial guru, Aisha Taylor, to get her expert advice on how to keep college students from going broke. Check out her money management tips.
Aisha is a #1 Amazon Best Selling Author and the creator of The Live Phenomenal Program, designed to help people get out of debt and stay out! Aisha, is a graduate of Duke University and remembers the pitfalls of managing money on a college campus. Here’s her two cents on how to avoid them:
- Beware of the “free t-shirt” deals. Banks and credit card companies will entice college students to open up a credit card with the promise of a free t-shirt or some other gift. According to Sallie Mae, the average college senior has $610 in credit card debt. Think about it this way. If this debt is on a card carries a 19.8% interest rate and only the minimum payment is paid, then it will take 4 years and 4 months to replay the debt and $288 in interest would be paid. That costs way more than a free t-shirt.
- Avoid Overdraft Fees. Make sure that you maintain a cushion in your bank account and keep your eye out for any automatic payments. However, if this is a little difficult, then you can remove automatic deductions from your bank account and also ask the bank to deny charges when there are insufficient funds to cover the cost. If you do get charged an overdraft fee, pay it off quickly to avoid being charged a daily overdraft fee.
- Take the time to research available scholarships. Recently I read a story about a man won a scholarship because he was the only person who applied. There is a lot of free money out there, but you have to take the time to look for it. You can even search for scholarships on Twitter. Just type the word “scholarship” in the search bar.
- Refund check money isn’t free money. Watch the student loans that you take out to go to college. As you sign the loan documents, it’s easy to say, “I will be able to pay it back.” However, you need to realistically assess your ability to pay it back based upon your anticipated post college salary. Create a budget to determine the cost of school and your expenses for the year. If there is money left over on the loan, then save it, rather than splurging on non-essentials. Every single penny that you borrow will become due at one point.
- Be wary about who you co-sign for, take out debt for, put bills in your name for, or lend money, clothes, books, etc. to. If you lend it, then you need to have the expectation that you won’t get the money or items back. If you take out bills or credit in your name, or co-sign on behalf of someone, you have to understand that you take on legal responsibility for that debt. This means that if the other person stops paying, you get stuck with the bill.
When I graduated from college, I had seven credit cards (all due to free t-shirt offers) and no job! Aisha’s advice would have saved me thousands of dollars in consumer debt and years of stress trying to rebuild my credit standing. Don’t start the year in the red; instead follow these tips and graduate with a degree and debt free!
Getting TO college is one thing; Getting THROUGH college is quite another. That’s why Dr. Shante’ Bishop offers strategic advice on being successful both in and out of the classroom. From catalogs to cap and gown, Professor Bishop shares what it takes to ‘Stomp the Yard” with confidence and clarity! You can follow Dr. Bishop on Facebook, YouTube, Instagram, and Twitter