The average college graduate will end up with about $19,000 in debt. This debt usually comes from student loans but it can also come from credit cards and poor money management. It is important to manage your money wisely in college so you do not live paycheck to paycheck once you graduate. In some cases student loans are necessary and it is likely that you will plan on having $150,000 in debt when you graduate with a doctorate or another post-graduate degree. Good financial advisors will be able to help you create a short-term and long-term plan to pay off these large student loans and to live a comfortable lifestyle.
Chapter 1. Save Money
College students need to be money smart! Save your money when you are in college by pinching your pennies where ever you can. Every little bit you get can help and you need to move the money into a high yield savings account or high yield money market account where it can grow during your college years. This way you will have something to fall back on if there is an emergency but you also have money to survive on once you graduate and you are looking for a job. Research online to find a high interest savings account that is flexible and will be able to provide you with the type of interest money you need to justify opening the account.
Chapter 2. Work Part-Time
Depending upon your situation you may be able to pick up a part-time job. Most universities will offer jobs to students that are 20 hours or less per week. Working even 10 hours a week while you are in college can give you $75 – $100 a week. Saving at least 50% of this money a month in your savings account can help you grow a nice nest egg while you are in college.
Chapter 3. Live On A Budget
Live frugally in college. This is not the time to spend money on flat screen TVs, iPads, and other “wants”. This is the time to pinch your pennies and to survive on a lot of spaghetti. The University should provide a number of free activities that you can enjoy such as weekend movie nights and bowling. You also have access to great computer labs, saving you from investing in an expensive laptop or computer. Budget wisely and save every penny you can while you are working hard on your studies.
Chapter 4. Don’t Rely On Credit Cards
College students are huge targets for credit card companies and many college students will wind up with at least $9,000 in credit card debt due to poor money management. If you have a credit card that you are using simply to establish credit, always pay off the entire balance at the end of the month. Rely on the card only for emergencies and do not allow yourself to think you can pay it off later. If you think this way, the balance will only continue to grow and before you know it you will be gouged with high interest rates and large monthly payments that you cannot afford.
Chapter 5. Investment Options
Some schools have their own banks and they can provide you with some great investment options. Look into money market accounts along with high interest savings accounts through the University. Compare their interest rates to those you can find online to see which companies will give you the best return for your investment. Take a finance course and learn about the various types of investments for younger investors and even older investors so you can create a short-term and long-term financial plan for yourself.
View a chart of the Nation’s Highest Money Market Account Rates