How to Graduate College Without Being Broke

Guest Post Author Bio:  This guest post was submitted by Jamie Davis, who specializes in writing about masters degree. Questions and comments can be sent to:

There’s a constant demand in the U.S. for books and tips about losing weight and being healthy, even though all of the advice boils down to two points: eat right and exercise. The simplicity of that approach is so staggering that most people simply don’t get it, or rather, they think it requires loads of qualifications and explanations. Nope. Eat right and exercise, and you’ll be fine.

The same kind of over thinking tends to infect financial advice, as well, especially when it’s doled out to college students who are desperate to come up with ways to make a few extra bucks between studying for exams and balancing their social lives. Everyone wants a short cut to wealth, and everyone seems convinced that there’s a great mystery surrounding financial stability and that only the most dedicated among us can escape colleges and online degree schools and universities with our bank accounts intact. Happily, that’s not the case. It’s well within a college student’s ability to start saving money while they’re still getting a degree even if dealing with student loans, and to graduate with a firm grasp on their finances and an idea of how to succeed going forward. All it takes is some common sense.

First things first: Be smart about credit. Most undergrads start getting credit card applications in the mail before they’ve finished unpacking in the dorm. Every year, there is a bumper crop of 18-year-olds wander into the sights of lending companies who really want to turn those young adults into lifetime customers. Credit cards are far from the glorious tools the banks want you to think they are, but they’re not all bad, either. The thing to remember about credit is that you’re not borrowing from a bank or other lender; you’re borrowing from yourself. If you have the money in your pocket, wallet, or checking account to make an intended purchase, put it on your credit card and then set that cash aside to pay off the balance at the end of the month. This will prove to the lender that you’re a responsible spender, and it will help you build a good credit score and a solid reputation with financial organizations. If you recklessly charge stuff and run up a high bill, you’ll be stuck paying monthly minimums for years (if not decades), and your credit will tank. By spending wisely and making credit work for you, you can ensure better deals, lower interest rates, and more generous loans when it comes time to make major purchase or investments like a car or home.

Next: think about retirement. Granted, it can feel weird to plan for your old age when you’re still trying to figure out what your major should be, and the concept of leaving the work force before you’ve even entered it feels so far in the future that plans could surely wait. But it’s never, ever too early to start planning for an uncertain future. A great way to get a handle on this is to open a retirement account like a Roth IRA. A Roth IRA lets you sock away up to $5,000 a year, and it can be withdrawn tax-free. An early start also means you can capitalize on interest that compounds over the years. Even putting away a little cash every year and doing it at age 19 instead of 28 will yield amazing results down the line.

It’s a good idea to get a job while you’re in school, whether part-time or full-time, to help defray some of the costs of tuition, student loans, room, board, and everything else.  Some employers even offer a tuition reimbursement program, where they will pay some of your educational costs while you continue to work for them. The costs associated with hiring and training a new employee are usually quite high, so if the employer is able to keep you around while you go to school by offering this type of benefit, it can sometimes end up saving money. Not all employers have a formal reimbursement program set up, but they might offer to help you offset some of your tuition costs if you ask about it. Getting a job in school isn’t just a good opportunity to learn all that boring responsible stuff about duties and priorities; it’s also a chance to learn the importance of paying yourself first. A lot of college students leave school broke and stay that way because every cent they bring in is earmarked for bills or discretionary spending that’s been deemed vital. Living like that is a surefire way to stay busted. Instead, set aside 10 percent of all income as yours, period. It’s not for food, bills, movies, dates, anything. It’s just yours. Within weeks, you’ll realize that you’ve saved up a significant amount of money without feeling like you’ve missed out on anything you “had to have.” Obtaining an online degree gives you a more flexible schedule to work during school.” You can let that money keep growing or decide to use it for bigger purchases or investments.

The thing to remember is that this is your money. You decide how it gets spent and who gets to use it. With a little common sense and some easy steps, you’ll be miles ahead of the rest of the pack. Isn’t that where you want to be?

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