College Happenings

The cycle of debt begins in college. It starts with the student loan, established before your high school graduation. You are placed into a completely new environment where you are expected to create your own social networks, learn about careers, and cope with countless credit card offers. Many students succumb to the temptations of debt, and are forced to cope with it for many years after graduation.

Here are some suggestions designed to keep you out of debt, most of which apply not only to college life, but are lessons for the rest of your life.

1. Pool your resources: Establish a central area inside your dorm room for food and other common items. Buying items in bulk saves a lot of money, and working together with your roommate places more money into the pool to buy more things. Each share needs to be equal, else disputes might arise.
2. Stay away from credit cards: You probably receive a large number of credit card offers. The companies will entice you, drawing you in with initial offers of 0% or low percentages. After a few months, that great rate will sour. The real credit card rates for students are usually over 20%.
3. Create a budget: You might be dependent on student loans and money from your parents, but you still have expenses. You might have laundry and books, food and gas. Budget your money according to your expected income, and try to stay within that budget. Put any excess funds into savings.
4. Learn about thrift stores: Goodwill and other thrift stores are excellent resources for finding great deals on clothing, appliances, and furniture. You can find some amazing deals at thrift stores. Look around your area for the closest Goodwill, and be surprised.
5. Tap water is tasty: Tap water is free. After you have drained a water bottle, fill it with tap water. You will have the same effect. If you chill the water, you cannot taste the tap water’s imperfections. Switching to tap water can save you a lot of money.
6. Used books: You can spend a fortune on new books. Fortunately, there are people on campus who have taken the course. You can borrow books from friends and older students. You might be able to purchase used versions of your books at the campus store or online. Buying new is not your only alternative.
7. Pay bills on time: Pay your bills on time. Many companies will let you pay late on their bills, but they will also charge you inconvenient late fees. Sometimes the late fees can become more than the cost of the bill. When you receive a bill, take the time to pay it.
8. Incentives: Companies around your area want your business. They will offer student discounts on everything from car repair to food. You can sometimes receive significant discounts, just for showing your student identification card.
9. Movies: Watching first-run movies is great, but you can pay deadly for popcorn, drinks, and snacks. Eat before you go to the movies, and you will be able to downsize your selections. Choose to drink water, rather than that five dollar soda. The movie will be just as great, and you will have more money in your pocket.
10. Software: There are some excellent free choices for antivirus, anti-spyware, and anti-malware applications. There are trial versions of games. You can get an entire open-source office suite for free. Save your money by going with freeware or shareware.

Staying out of debt is only possible with a lot of effort and persistence. Each small effort against debt adds to the whole, just as each expense adds to the debt which you have. You can be debt free when you leave college.

It starts early. College freshmen arrive to campus only to be bombarded with student credit card offers from day one, increasing the likelihood they will spend too much, carry big balances, and enter into a lifetime of debt. Thankfully, there are ways for college students to establish credit with credit cards and do so responsibly. Keeping these tips in mind will help students pay off their balance each month and graduate from college free from credit card debt.

1. Carry only one credit card. With so many opportunities for college students to get credit cards, it’s easy for them to get carried away and end up with more cards than they can afford. By having just one credit card, students are more likely to keep up with what they owe, and it will be easier for them to establish credit.

2. Use the credit card for one thing only. By limiting credit card purchases to just one thing like gas for the car, groceries, or textbooks, college students are more likely to know exactly how much they owe at the end of the month. If the items designated for credit card purchases are essentials – food, for example – students should know before making a purchase that they’re buying something they can afford.

3. Use the credit card sparingly. College students can establish credit even if they almost never use their credit cards. By just using the card a few times a year, students will be able to build a good credit score, and doing so also makes it easier to pay off a balance since students owe less money.

4. Get a family member to cosign. If you’re a college student thinking about a credit card, see if your parents or other family members with a good credit are willing to cosign with you on a card. College students often sign up for credit cards when they’re away from home, neglecting the fact that cosigning with a family member may allow them to get a credit card with a low interest rate.

5. Shop for a low interest rate. College students shouldn’t just fill out the first credit card application set before them. Many banks, credit unions, and other institutions offer credit cards with competitive rates. These cards are often geared toward college students trying to establish credit.

While it’s easy for college students to head down a slippery slope ending in mountains of credit card debt come graduation time, there are still ways for them to use credit cards responsibly. Considering the credit card options available and knowing how to avoid several common pitfalls can go a long way for students trying to establish credit. In the end, the careful use of a credit card can bring financial rewards.

This is a guest post by Dee Barizo from The Best Degrees, an online school site that picks the top online degrees. Also, the site provides tuition rankings for students looking to save money on their education.

The essential debts of college, such as student loans, are enough to deal with. There’s no need to further stress your finances by making decisions that are detrimental to your fiscal health.

Credit cards can be dangerous. They’re great to have for in case of emergency, but it’s important to resist the temptation of have now and pay later for nonessential things. And, that applies to the things you need as well. You may need a laptop, but do you really need the top of the line, fastest model money can buy?

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