Tuesday, November 22, 2016

Dear College Freshman

They always say hindsight is 20/20, and I'd say that sentiment is certainly true about handling your finances in college. Approaching a one size fits all for college finances doesn't quite work because all colleges aren't built the same, and all students and their respective families aren't built the same. However, I think there are still a few key principals that I wish I could go back and tell my Freshman self. Do you have any? 

Dear Freshman,

Congratulations! You have graduated high school, moved away from home, and are enjoying your first semester in college! I know, I know, the freedom is amazing. Social freedom is great, but you are now responsible for your financial freedom too.  Before you get too far ahead of your self, here are a few things that you should keep in mind. 

Learn How to [roughly] Budget

This is a tough thing for grown adults, so don't be scared away too soon. It is not something that comes easy, but once you figure out what is going on, it does. get. easier. The simple way to think about it is this - how much money do you have to spend? Do you have a job, savings, money from your parents, or a scholarship? If you have any or all of that, add it up and try to determine how much you have each month. 
The next step to this is focusing on how many "fixed" expenses you have. These are things like car insurance, cell phone bills, rent, etc. A lot of college students are fortunate to still be on mom and dad's payroll, but a lot are not and are already paying these things on their own. If you fall in the latter of the two categories, add up those expenses. This is money that you will spend every month no matter what. 
Now comes the tricky part. You need to see what the difference is in your "income," be it from work, parents, scholarship, etc., and your fixed expenses. The difference in those two amounts is what you have left for the month to spend on other things like coffee, dinners out, long weekend trips, and other fun activities. 


You know that "extra" money that {hopefully} you have at the end after you pay all of your fixed amounts that we just talked about? Do your very best to save some of that. Even if it's just $20 a week or $50 a month. Every little bit counts, and in the end it all adds up. If you have to pay for your books this is especially important because that is a big expense that usually comes all at once. The good news for books is, you can check out this post, where I talk about a few days you can save on text books. Unfortunately for other big expenses, like car repairs, there aren't always less expensive options. (For Example - Earnest offers a service to help you refinance your student loans and make them more affordable.) So save. that. money. You'll be happy you did, I promise. 

Eat for Free Every Chance you Get

Here's the thing about college, and grad school for that matter - people want you to be a part of their club and join their organizations. People also recognize that free food is a great way to draw a crowd. I cannot count the number of free lunches I had in Law School just for sitting through another lecture that was being held by the career center or another law school group. Go. to. those. lunches. The good thing about college is that you are almost always required to have a meal plan, especially your freshman year. Make sure you take advantage of that because those meals are already paid for. I know, I know, it gets old after a while, but try to be creative. I always knew that if I was disappointed with the dinner selection I could just have a bowl of lucky charms or a chocolate chip waffle. Have that back up plan, but make sure you are using those meals. The more meals you eat on campus the more money you are saving and it will be easier on your wallet when your friends want to go grab some ice cream on Saturday night. 

Re-Evaluate Each Semester 

Keeping the above ideas in mind, it is also important to re-evaluate your expenses every few months. College has that natural split of semesters, or trimesters, and that is the perfect time to look back on your income and spending and see what you did wrong, and what you did right. Are you really reading those magazines that seemed like too good of a deal to pass up? If not, cancel. Have you enjoyed your weekly coffee dates with one of your friends? Great, keep making room for that in your budget. It is easy to make things happen when you plan for them. By looking back each semester you can really see how you're doing, what you need to budget for, what you want to budget for, and what costs you can cut because they just don't matter.

Here's a final tip - keep up with the news, especially the business news. The more you understand not only about your finances, but the country's economy as a whole, the easier it is to keep yourself in check. My favorite way to start the day is by reading the Morning Brew. It is a quick snap shot of how the markets finished, why some shares took a dive, or a jump, and what we can expect in the future. Plus they have an interview question of the day - my favorite part - and it is never too early to prepare for the dozens of interviews you're likely to encounter as you continue on in your college career. I strongly encourage you to check it out!

Enjoy college and have fun! It will be the best four years of your young life!

Legally Southern

ps - if you are having an oh Sh*t, I'm already an adult moment - check out this post about staying financially fit!  

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