College Students: Avoid Financial Mistakes for a Better Future

I received my Bachelor’s degree in 1997, but I still think a lot about college-especially around the 19th of each month. That’s the day I write out a check to cover my student loan payment and send it off to Sallie Mae. I don’t mean to complain, but the truth is that it’s a pretty big payment for someone on a public librarian’s salary. Luxury car payment big. Half a house payment big. You get the picture. I loved my days as a student, but as I gaze out the window of my half-sized house and note that there’s no BMW in the driveway, I can only conclude I made some poor financial decisions concerning college. You can avoid those mistakes. When you are preparing to begin your undergraduate education, keep the following points in mind and you will be much better of than your alums on graduation day.

Make Sure College Is For You
If you are wondering if you should even go to college, the answer is almost certainly yes. College grads make more money and can secure better employment than those without a degree. That doesn’t mean you shouldn’t ask the question. When I was a student, I was amazed at the number of people attending university classes simply because it was expected of them. They had no purpose or plan except to make it to the weekend. If that describes you, then college is nothing more than a way for you to spend a great deal of money. Make sure you know why you are on campus before you ever give the Bursar’s office a dime.

Choose an Appropriate Institution
If you are motivated and know why you want to go to school, choose an appropriate institution and program to meet your goals. You need to consider not only the reputation of the school, but also which type of institution will get you the job you want at the least expense. While four-year programs provide the most opportunities, don’t be a snob. You may need to go to school for four years, but in some cases you might be better off at a specialized school or a two-year institution. If you choose to pursue an expensive option while ignoring a quicker, cheaper option that will lead to similar opportunities, you have chosen to throw your money away.

Romanticize Nothing
Don’t fall for the intellectual mystique. Education is an investment, and it needs to perform. When choosing a major, you should be able to see a clear path from your degree to a well-compensated job in your future. That is not popular advice in academia. You will be encouraged to follow your love of learning and engage in “the life of the mind.” Ignore anyone who spouts this kind of advice. After graduation, you can pursue the life of the mind over a cappuccino at Borders. Now is the time to be pragmatic. As an English major, I often heard fellow students joke about graduating with no qualifications. That’s not funny; that’s a disaster. If you truly feel your major will not qualify you for a decent job, drop it immediately and find another program.

Make the Most of Every Opportunity
While working towards your degree, never forget your goal is to prepare yourself for a good job that will bring you a reasonable amount of happiness. To attain that, you need both a strong theoretical base in your field and solid, demonstrable skills. Avoid blow-off classes and “easy A’s.” Take the classes that will translate into resume bullet points. If you can score an internship in your field, take it. Do everything you can to become a stronger candidate and let the competition fill their transcripts with “Rocks for Jocks 101” and “Advanced Clapping for Credit.”

Pay Attention to Your Finances
As a student, you will have a lot of things to worry about. Your schedule will revolve around papers, exams, research, and labs. That does not mean you can put the real world on hold for four years. You need to pay close attention to your money while you’re in college so that you will still have some when you graduate.

First, get a job. I don’t care if you are taking 18 semester hours, you need to be earning your own money. College tends to isolate students from the real world and shelter them from the troubles most people face as soon as they leave campus. Having a job will keep you mindful of the fact that you are responsible for taking care of your own needs. You will understand the value of cash much more than students who sponge off their parents.

Second, put yourself on a budget and stick to it. Now is the time to develop this habit. Think about it. Your financial situation will never get any simpler than it is on campus. One day you might have long term care insurance premiums, orthodontist bills, and property assessments to deal with, but right now you don’t. Develop the habit of planning your spending as a student and you will be ready to face the challenges that will arise after you get your degree.

Third, avoid the credit card trap. Credit card companies make a lot of promises about helping you to build credit, but what they really want a guaranteed piece of your paycheck for the rest of your life. You are nothing but a revenue stream, and they will do whatever they can to tap into your resources. Stay far away from them. In fact, avoid all debt if you can. Debt is nothing but financing your past at the expense of your future.

I have to write a check out to Sallie Mae each month because I made the wrong decisions. I was never comfortable signing a student loan promissory note, but lacked the wisdom to make hard decisions that would make my future life better. You can avoid that fate. While you are a student, don’t be afraid to make tough, pragmatic choices about your education and finances. One day, when you are looking out the window of your palatial home admiring your BMW, you’ll be glad you did.