If you read a few newspapers daily, watch a little CNBC, and listen to any of the economic speeches of the presidential candidates, I bet that you are as confused as I am as to whether the stock market is going to continue to go up, or totally crash. Also, do we have a good or a horrible economy? (Forget about how it compares to other global economies.) It continues to be the case that there appear to be an infinite number of metrics that can paint a good or bad economic picture, even if you dig down on the metrics. So my advice is, take a little vacation from all of that information and debate about the economy. Don’t read or listen for a while. Believe me, you won’t regret it.
I have been attending a number of high school graduation parties lately, and a lot of people have been asking for advice on college costs, college budgets, and student loan debt. Other than my three big lessons — do everything that you can to graduate on time, never borrow student loan money for lifestyle (Cancun for spring break), and avoid credit card debt like the plague or Zika — here are a few other things I find myself discussing, other than student loan debt.
First, it is critical to have a realistic entertainment budget that you can and will stick to — how much per week or month will you spend on concerts, eating out, sports events, travel, etc. Today with all the apps and social media, it is easier to find good bargains for all of those entertainment things that you “just have to do," so take advantage of them. Also, look for the many free or discounted things that are offered on and off of campus for college students.
Second, you are going to need those everyday items that were just there and provided to you at home — snacks, shampoo, headache medicine, soap, etc. You don’t need to go big. Look for generics and less expensive alternatives. Get a group together and periodically go to Walmart or the dollar store, or share the cost of a buying club membership to Costco, etc. It is OK to buy in bulk and then split the items. Oh yes, coupons work for college students.
Third, today, if it means staying out of, or minimizing, any debt that you would otherwise incur in college, it is OK to get a part-time job that will not significantly interfere with your studies, although it may interfere a bit with your social life — but “really." The same goes for the summer. Earn every dollar that you can — it will increase your financial options. Also, even if you don’t have to work because of your financial circumstances, do it anyway. That was my personal situation in high school and college. I was very fortunate, however, my parents made me work every summer — various construction and retail jobs, and even a hospital orderly job. It teaches you about the world and people, how others think, and how to take orders, so that you may be able to give them effectively someday. There is nothing wrong with getting your hands dirty and your feet wet. Even if you get one of those plum unpaid internships, get a real job too.
Fourth, to the extent that, today, you are in a class that requires you to have a textbook — look for websites and other options to purchase used ones.
Fifth, go light on all of that college logo clothing, which can be very expensive, unless you buy it cheap off campus, or in the bookstore clearance section.
Sixth, have an emergency fund, preferably with money that you earned, so that you won’t be as inclined to think that a late-night pizza when you're hungry is “an emergency.” If you are given an “emergency credit card” by your family, before you use it, think about whether they would agree that your use is in fact an emergency, so they will be willing to pay what you charge.
Seventh, even for college students, "cash is king.” For those little things, using cash will result in making better choices. Also, get the cash from your own bank to avoid ATM fees.
There are so many more practical ideas like these that can really make a difference for your college finances. Use these as a starting point, and role play through a month at school to focus on more things that you can address. Also, talk with a current student, or one who just graduated, for some more great tips.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program.