By Sarita Olson, LCSW-C, Team Manager, Service Coordination
College students who are graduating and transitioning into the work world find this is an exciting yet apprehensive time. Your financial picture will most likely change once you graduate — depending on your financial obligations and individual situation. “A Generation Hobbled by the Soaring Cost of College,” (New York Times, May 12) noted that 94% of students who earn a bachelor’s degree today borrow to pay for higher education – up from 45% in 1993…. The average debt in 2011 was $23,300 … and “nearly one in 10 borrowers who started repayment in 2009 defaulted within two years.” If you are a college student in your twenties, figuring out how to pay off your loans, while also meeting your living expenses, can be overwhelming. The financial effects of decisions made now will last into your thirties and forties.
Here are some pitfalls to avoid:
1. Be realistic in the kind of lifestyle you can afford vs. what you would like. For example, is a trip to Cancun in your budget?
2. Be aware of credit card companies who send you extra rewards and businesses that promise a discount off your purchase if you open an account. Finance charges and fees can be up to triple for what you paid for that $50.00 pair of jeans, especially if the amount is not paid in full by the end of the month. Remember the old adage: “A penny saved is a penny earned.”
3. Be realistic about your earning potential. Teachers and social workers usually start off in a lower salary range than other professions such as high tech or computer jobs. However, don’t be dismayed. Good planning should happen regardless of what you are going to earn.
Here are some helpful tips:
- Meet with your college’s financial advisor before you graduate to discuss a plan for paying off your loans. You can also consult a financial advisor at your bank.
- Devise your personal financial profile. Where do you want to be in 3 months, 6 months, a year, etc.?
- If you plan to pursue further education, research opportunities for paid internships and companies which provide tuition reimbursement for related coursework.
- Your checking accounting is your friend. Take care of it and avoid overdraft fees and unnecessary charges. Review your statement monthly online.
- Think about ways to share expenses such as rent, food, and utilities with others. Your bills will go down significantly.
- When looking to buy a car, consider buying a used car, carpooling, or taking public transportation.
- Look for end of season sales, yard sales, and consignment shops for household items and clothing.
- Always research the best deals for phones, internet access, etc. You could “save a bundle.”
These tips will hopefully get you started on the right track to better financial success! Remember to be proud of your accomplishments and know you’ve made it this far. Learning how to manage your money is another step in your personal life plan. The planning and rewards will pay off in the long run.
By Sarita Olson, LCSW-C, Team Manager, Service Coordination, Jewish Community Services, Baltimore, MD
To learn more about how JCS can help you solve life’s puzzles please visit our home page or call 410-466-9200.