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| The Basics | 6 money tips for new college students
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Here's how newly graduated college seniors would advise incoming freshmen. Among the tips: Don't go over your phone minutes, and rein in impulse buys at the 7-Eleven.
By Janet Bodnar, Kiplinger's Personal Finance Magazine
Three years ago, I interviewed some of my son's classmates at the University of Pennsylvania, along with other college freshmen, about how they had managed money in their first year away from home.
Now the group is graduating, so I revisited them, this time to ask what they had learned about personal finances during their college careers, and what advice they would give to incoming frosh.
Choose your bank carefully.
"Find out about ATM and monthly fees," says Ryan Comfort, a senior at Penn's Wharton School. "I often got charged $11 a month, and I'm still not sure why." Chantal Artur of Penn advises students to "use a bank that is accessible anywhere, especially if you're going to school away from home." Lucy Madison took her money out of the on-campus bank at Northwestern University and moved the account to a Citibank branch, where she received better service.
Watch where your money goes.
"I overdrew my account more than once and was charged a $35 fee each time," says Penn senior Martha Cooney. Marc Canada of the University of Maryland recommends hanging on to receipts and bank statements as a visual reminder of how much you are spending. "Online banking saved my life," says Artur.
Don't hang out with big spenders.
"When I moved off campus," says Comfort, "I became friendly with a group of students whose parents let them charge everything. I ended up spending at least $20 on dinner every night." Comfort paid for his own school expenses with his earnings as a waiter.
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Don't go overboard on food and phone time.
They are the biggest drains on student pocketbooks. "Come finals week, I spent every cent in my account on takeout," says Madison. "Do not go over your phone minutes," warns Cooney, who got "several sickeningly huge bills" after making calls to her boyfriend in Ireland. Her advice: "Buy prepaid phone cards."
Take advantage of foreign study programs.
"Traveling abroad gave me the best financial experience I've ever had," says Jessica Phillippi of Wesleyan University. Struggling with the strong euro, Phillippi ended up borrowing $1,000 from her parents. "But I paid them back with my summer earnings," she says. Madison studied in Argentina, where the exchange rate was favorable, so she felt "instantaneously wealthy."
Expect the unexpected.
"I bought a car, and car problems cost a bundle," says Canada. One of Cooney's "painful surprises" was a $300 parking ticket she ended up paying with friends. Another shock: the cost of applying to graduate school.
A thrifty streak
In speaking with these students, I had a couple of surprises myself. For one thing, they could be remarkably frugal. Phillippi, for example, says her biggest recurring expense was $14.37 a month for a land line, because "I'm one of the last college students who doesn't want to pay for a cell phone."
Boston University graduate Ben Gross dropped cable TV and learned to rein in impulse buys at the 7-Eleven. "Buying Jif is an extravagance because it's more expensive than any other brand," says Gross.
In general, the students think they've become smarter about money. Gross is excited about getting a job "where they'll give me a match in a 401(k)." But Phillippi is already worried that next year she'll have to do her own taxes.
On a personal note, I was pleased that my son figured out how to track his spending on a spreadsheet -- until he sent us a list of school-related expenses that he thought we should pay for. On the list: $37.03 to rent his cap and gown.
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Fund data provided by Morningstar, Inc. © 2008. All rights reserved.Quotes supplied by Interactive DataMSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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