College was the opportunity to live on my own, and do what I wanted to do, with just a few responsibilities: do well in my classes and stay out of trouble. I turned my 4 years into 4 ½, joined a fraternity, and spent an unimaginable amount of money at the bars for someone who had zero reliable income.
Personal finance as a term wasn’t brought up or even talked about amongst friends while I attended college. In fact, I only remember it vaguely discussed by professors yet that should have been one of my major responsibilities right from the start. Many people in college do have the responsibility to create their own income, just to remain in college. They study more-or-less full time, work part time, but have very little time left for a social life.
That time spent earning their way, whether it was for tuition fees and rent, or to have money to go out with friends, it was a meaningless burden to me. I didn’t have to go hunting for the cheapest student accommodation or worry about the best way to get all my stuff home at the end of each academic year. I was fortunate enough to be able to just call up a packing and removals service and get them to do all the hard work – and hang the cost. Hey I don’t think I even thought about the cost at the time. Those less fortunate were hunting around for the cheapest self storage to keep their stuff safe and secure over the long summer holidays.
But in the end people like this understood personal finance way better than I did after 4 ½ years majoring in Accounting and Finance (yep – you read that right).
I’m not going to tell you to start saving money while you are in college. I would never do that and nor should you. That doesn’t imply you should spend above your own means either. What I am sayin gis that the people that were managing their money, who couldn’t go out on certain nights (either becasue they were working or just didn’t have the funds) were already learning real life discipline with their finances.
This was a major life lesson that I missed out on – and were those extra nigts out really worth missing out on that life lesson. If I’d learnt it then I might have stared out my adult life in my brand new career in a completely differnet frame of mind. That different frame of mind might have enabled me to save a little bit of what I earned and put it towards a down payment on my own home.
I look at those “sensible” college friends now and some already do have their own apartments – small sure, with big mortages, sure – but a place of their own.
And just becasue my parets helped me out financially at college didn’t mean they could also help me out now when I’m earning and they are getting older and starting to need their spare cash to plan for their retirement. I had never even considered that there would always be money coming my way from them on a fairly regular basis.
So, I’m going to give you 5 ways in which you will learn real life money managing discipline through simple college decisions that we all could or should have made back then when I was a student:
1.) Whether or not you get some sort of allowance from your parents, an income through part-time jobs while at school, or government funding for a semester – understand what amount that is per month and how much you actually spend per month.
2.) I don’t care who pays the electric bill, rent, phone bill, internet, cable; just check and see how much they cost. be aware of costs such as these for the time when you will have to pay those bills – becasue it is surely coming sooner or later for most of us.
3.) FOOD – this is a major cost for everyone whatever their income so don’t bury your head in the sand and hope your parents will help you out at the end of the month (yet again). work out how much you spend, how much you should be spending based on your income – and work out how to make savings on you food – become a vegetarian, for instance.
4.) Here’s a fun one. After each weekend for one month, check your credit/debit card and see how much you spent on going out – you could be in for shock as all those little bills soon mount up. And if you check your bills regularly then you won’t be able to so easily convince yourself that you’re not spending very much
You real money management issues may not start to happen until you graduate from college, you get that good salary that you were hoping for but it isn’t enough because you have to start paying back student debt and paying proper rental rates.
If you had to manage your money in college you should be able to manage it now but if not then it will be a hard lesson, but one we all have to learn eventually (well, most of us, anyway). Remember a big new paycheck doesn’t suddenly mean lost of spare cash to spend – remember taxes, medical insurance, rent at a commercial rate vene new clothes for your swanky new job – they all add up.
Best advice, get used to living within your means as early on as possible it will save trouble later.