College Students and Finances

Entering the world of college is exciting. You are on you own. Chances are you are living on campus or off-campus housing. Maybe you have an apartment you share with others. Whatever it may be you have bills, and school work, and maybe even work!

You are using those credit cards with $500 limits that every bank is willing to give you. Now they are maxed out. Finding yourself using your book money for pizza and beer? Maybe you are sticking to the ramen noodle diet. Either way you are trying desperatley to stick to your shoe string budget, do well in school, and keep your head above water.

With a once a week routine you can keep your finances in order. Here is an example of Tim, a college student in his second year of school. Tim works part-time, has student loans, attends class full-time, and shares an apartment with some friends.

Monthly Income (take-home wages):

Waiting tables: $800

Monthly Expenses:

Rent (his share): $400

So we can see Tim's rent is half his take home wages. That leaves $400 for food and other expenses. All of Tim's classes are paid for by student loans. He does not want to use student loans for books. So he rents them from online websites, a less expensive option than the campus bookstore. From his $400 he will set aside $50 towards next semesters book.

Knowing he will need payoff those loans one day he also sets aside some cash for that - another $50. He has a credit card with a monthly minimum due of $25. Instead of paying the minimum due he pays $30.

Tim is now down to $270 for food. He tries to budget himself on $50 per week for food (knowing he can eat at work usually for free) and puts that remaining $17.50 every week into his savings account for emergencies.

By putting away that $17.50 every week, Tim will save approximately $900 per year. Plus the $50 per month he is saving for student loans he will save $600 annually. Knowing that interest can accrue on those student loans and there is no penalty for paying them early, Tim makes an annual payment of $600 towards his student loan debt. This will make an impact when he finishes school.

The more you can pay on your student loans before they become due, the less you will pay on interest. And it doesnt hurt to have the monthly amount be a little lower either!

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