Graduation Time and Financial Money Management Lessons I Learned
With only 5 states in the U.S. requiring a course for graduation and 12 other states in the U. S. requiring high school students to take some type of personal money management course (according to 2014 survey by the Counsel for Economic Education) you can almost bet your graduate is leaving high school without even the basics of money management. I was one of these graduates at one time. I quickly went off to college in the SUNY system (State University of New York) and at the orientation process got slam-dunked with credit cards and college loan offers.
If this sounds familiar “Don’t fall for the trap.” I know most universities these days don’t allow the credit card companies to set up camp during the orientation. Credit card companies found another way in the door. They somehow magically find your address send a disguise envelopes with “double the miles and entertainment” offers with no black out or seat restrictions.
For the lonely college student hundreds of miles from home the offer is tempting “home for the holidays” rings in your head with a little gift giving on top.
Absent in this scenario is any knowledge of the basics of financial literacy on interest and late fees. I fell victim to the slick marketing approach not just once but at least three times. Yes I filled out three different credit card applications thinking if I got turned down for one I had to other opportunities to win. Much to my surprise I hit the jackpot and received all three credit card offers.
As a young man who came from nothing and had nothing, I was “cash flush.” I did what any self respecting financial illiterate person would do. “SPENDING SPREEEE!” New clothes, new stereo, album collection to be envied of Jimmy Hendricks, Janis Joplin and Miles Davis to name a few. I climbed with lighting speed to the top of the social popularity scene in the dorms but didn’t figure the credit cards and my spending habits had anything to do with it. “Don’t fall for the trap.”
Where are the teachings of Free Financial Literacy 101 :
- BUDGET: Most important create a budget and live by it.
- CHECKING AND SAVINGS ACCOUNTS: Open up a checking and savings account this year before going to college. If you haven’t…GET TO IT. Oh! Don’t forget to tell the bank manager that com sent you and give them our website.
- WANTS vs NEEDS: Sit down and make a list of your wants and needs and try to have a clear understanding which is which.
- CREDIT CARD: If you have or are going to apply for a credit card use only one.
- DEBIT CARD: Actually you’re better off using a debit card because “you can’t spend what you don’t have.” because a debit card is debiting (taking money right from your checking account just like writing a check). It’s a good way to remain debt free. But be careful because you are using your checking account for those debit card purchases, and that could cause you not to pay attention to your spending and possibly spending over your budget for wants instead of needs. Also if anyone gets that debit card they can deplete ALL your checking account funds because it is the money in your checking account that is paying for purchases.
- PREPAID CARD: This is really the best and safest if your are serious about sticking to your budget and not getting into debt. You go to a bank or credit union, and you put on that card the amount you have to spend each month, and then whatever you have spent during the month, you replace that amount on this prepaid card. See how this helps you stay with your budget? ADVANTAGE 1: You cannot spend over your budgeted amount because that is all the money that is on the card. See how this helps you stay with your budget? ADVANTAGE 2: There is no interest, and what a savings that is to you. BE SURE TO PAY BACK THE AMOUNT YOU SPEND EACH MONTH, OR YOU WILL BE CHARGED INTEREST AND YOU WILL HAVE LESS TO SPEND THE NEXT MONTH. See how this helps you stay with your budget? ADVANTAGE 3: Your are building up a credit history with a good credit score with this card as your timely repayments each month are reported to the credit bureaus just like credit card payments are reported. See how this gives you the incentive to stay with your budget. ADVANTAGE 4: This is so much better than racking up charges on a regular credit card that you’re not being able to pay off at the end of the month because you went over your budget, and then having to pay even more for the items you bought because you are paying some outrageous % like 20%+ in interest for the items you cannot now pay for. See how this helps you stay with your budget? ADVANTAGE 5: A prepaid card gives you a credit card to purchase items without always having cash in your pocket, and it also is used to purchase on-line. It gives you added safety because you are not giving access to your checking account when you use this card. If there ever is identity theft to this card, your checking account cannot be depleted.. See how this helps you stay with your budget?
- TEXTBOOKS: WoW! What a mind blowing experience it cost more for some/one of the textbooks for my classes than a month’s dorm rent. Buy your books used if possible. They didn’t have them when I was going to school but I understand an investment in a Kindle or iPad to download your books could save you a significant amount of money.
Hopefully you were diligent while in high school did your FASFA and received tons of scholarship money for the many activities you can get scholarships for while in high school i.e. sports, chess club, political positions, arts, community service, merit-based, contest & sweepstakes, company sponsored, minority scholarships and much more. Check with local service organizations e.i. Rotary, Kiwanis, lions Club etc. and check the local and national foundations. AVOID TAKING A LOAN WHENEVER POSSIBLE. When on campus make frequent visits to the guidance office to check on scholarships that are being offered on campus. Always remember scholarships won’t chase you, you need to chase them.
After your books and tuition are paid for, in some cases you are going to get a ton of money back. IT’S NOT “SPENDING” MONEY! It’s money that should go towards EXPENSES you have while attending college. But as with any and all money you receive, don’t forget to “Pay Yourself First.” That’s why you need the savings account!
If you’re like me, the money left over from the scholarship was not enough to last me through one semester so I needed to find a job and needed to find it quick. The campus HR (Human Relations) office is a good spot to start do it early because there are thousands of other students in the same position you are and in need of a job to help sustain them.
If you don’t have luck at the HR office try the campus pub, pizza shop, book store or any other shop or store on campus. Best bet is to get there weeks before school starts and apply for the positions and hopefully they’ll hold it for you until school opens.
Learning the Basics of money management before you get to college would be a Real plus for you, but if you didn’t no worries. The loving community of Free Financial Literacy 101 is putting together a Free Financial Literacy EZ eBook that will be EZ for you to read and EZ for you to understand. Subscribe for your Free copy today.