One Year After Graduation: Advice for College Students

Today is May 1, 2010. It's been exactly one year since I graduated from college. Where did the time go? It's been an interesting year to say the least. Going to college was great and all, but the one thing I wish they taught me about was personal finance. There should be a mandatory freshman year course on personal finance. If not during freshman year of college then during senior year of high school. So many college student graduate with huge credit card debts and even bigger student loans.

Here is some of my advice for college students (incoming freshmen or upperclassmen) based on my time at Northeastern University on how to spend less and save more. It doesn't represent all private institutions, but it's probably comparable and the main lesson is pertinent to all college students.

1. Skip the alcohol: Well, it's illegal for you to buy and consume alcohol if you're under 21. Not only that, but that's a lot of money that you're wasting every week and for what? Puking up your guts in the nearest toilet (if you're lucky) and having a hangover the next day? Even going to the bars excessively when you're 21 and over will eat into your wallet even more since everything is more expensive and you have to tip for each drink. By skipping the alcohol consumption your wallet and your body will thank you for it. 


2. Find cheaper apartments: I lived on-campus all 5 years of school. It's usually mandatory that incoming freshmen (not transfer student) have to live in on-campus dorms. Though it's not a hardship for those that get to live in cool dorms/suites such as the one pictured here at Northeastern University's new building, International Village. Lucky Honors students. Living on campus cost me approximately $5,400 a semester (4 months) or $1350/month with utilities included for an "enhanced," meaning pretty much new or recently renovated, apartment. I could have been living off-campus for maybe $500/month. Then again I lived in Boston and I had a view of Fenway Park from one of my apartments on-campus. If you wanted to live cheaply in that area you had to live on Mission Hill aka The Hill and the commute by foot can be 10-20 minutes. It really comes down to what you want in a living situation and don't forget to factor in distance to campus, security, and transportation costs when you live off-campus. Most of the time it's worth the walk.
   
   Another option would be to see if your school provides alternatives to living in inexpensive school leased buildings. My sister lived in one of the school leased buildings and saved significantly on housing. She even lucked out this year since the building she was going to move into was involved with a construction accident and everyone has to be reassigned to a new building. She got to live in an "enhanced" apartment and still paid the reduced housing cost of the old assignment. ($5400 - $3055 = $2345 savings/semester). Based on housing costs here.
   


3. Find cheaper textbooks: At NU, the co-op system divided the students in your year into two divisions (this is true in the College of Engineering). You were either in Division A or Division B (applied to the Class of 2009 - I think they switched it to Div A and Div N). Div A was in school while Div B was on co-op and vice versa. I was lucky since I have a friend who was in the same major in the opposite division and they usually took classes a semester before we did. I borrowed some of her books. To return the karma, I lent my books to someone a year below me. If you don't have friends who are in the same major but a year ahead, then you can try the school library. They usually have a set that they keep in the building. You can't take it out, but it's there if you want to use it.
   
   Don't forget to buy books online - you can save a lot of money that way and there are a selection of sites online. You can even work out a deal to buy books for a class while your friends buy books for other classes and share them with each other. I would also recommend to wait a week to see what books are really necessary for the class. I ended up buying a few books that I never even opened. Waste of money. Period.


4. Reduce your meal plans: NU gave us the options as freshmen to reduce our meal plans. You can choose from 10, 15, or 19 meals per week. It's probably best for freshman year to opt for the 15 meals per week (this is also the default meal plan). The plans don't roll over week to week so it's use it or lose it. You can always find your own meals on the weekends. As upperclassmen we were allowed to get Profiler Plans in addition to the meal plans. You buy a specific amount of meals for the year with options of 25, 50, 86, and 110 meal quantities. This is more flexible since most upperclassmen live in apartments with kitchens and this allows you to use the cafeteria on-campus at your leisure. It's usually cheaper to make your own food since the meals cost $13 per Profiler Plan meal or if you know you'll always use up your meal plan allotment every week then it's cheaper to get the meal plans for the cost of approximately $6 per meal.


5. Ride your bicycle: This might be a good opportunity for you to get a bicycle if you don't own one already. You can cut down on transportation costs and get some exercise in the process. Just remember to invest in a sturdy bike lock and never leave it in sketchy areas for extended periods of time without moving it. My boyfriend can tell you a few stories about that. Maybe I'll even get him to write a story about his bike theft issues. You can probably find decent bikes in your area on Craigslist for cheap.


6. Understand your expenses: The biggest eye opener for me was seeing how much I spend on material goods every month. There's a lot of different personal finance softwares on the internet these days and everyone has different needs. I highly suggest that you choose one that you're comfortable with and begin to understand your income and expenditures. My personal favorite is Mint.com. It has changed the way I view money and my own financial state. I like the easy to use features and the colorful visuals. Budgets are made easy and I feel great knowing my financial status quo. Probably not so great when I look at how much student loan debts I accumulated in 5 years. So start early and start now.


7. Resist credit card sign-up tables: I not sure what the policy is now in regards to credit card companies promoting on-campus. They used to hand out t-shirts and backpacks when you signed up for a card. A lot of my friends signed up for one just to get those "free" COLLEGE t-shirts. I believe they were banned from our campus during my junior or senior year. Marketing ploys that gets students who are uneducated about credit card and credit card debts. Do your research about credit cards before haphazardly signing up for one. Your credit score will thank you for being a responsible card user. See this article about Campus Credit Card Trap via TruthAboutCredit.org.

What I listed above are the biggest savers of money while going to school and especially one in a major city. There's other ways to save money, but I'll have to make that another post for another time.

Discussion: What did you do to save money while in college?