"Be aware of your return on investment. First, determine if the income potential of the career you would like to pursue will support the expense of the education you would like to obtain. Second, make decisions with your head and not your heart. Be realistic about what your family can afford to pay toward your education. Don't choose a college because your friends are going there or because it is the coolest school in the state. Don't let outside sources influence a sound decision. Third, know how much the education will cost and how much you will have to borrow. Estimating your student loan borrowing will allow you to estimate your repayment after graduation."
Tracey Richards is the director of the financial aid office at Montgomery County Community College, which has campuses in Blue Bell and Pottstown, Pa. She graduated from the University of Pittsburgh in 2000 and earned a master's degree at Penn State University in 2009. She says her downfall in college was using too many credit cards. "This was a very common problem among many of my peers as well. Credit card companies used to set up tables on campus and would pretty much approve anyone at the time. One too many pizzas, late-night diner trips and road trips were easily charged on my credit cards – a mistake I paid for, for many years after college," Richards says.
Ixnay on the credit cards.
"Continue to budget expenses while in college, save for emergencies and do not obtain or use credit cards while in college. You don't need to build credit while in college."
Shakeela Hunter, director of the Student Money Management Center at the University of Texas-Arlington. Hunter graduated from the University of Illinois–Urbana-Champaign in 2004. She wishes she had understood loans and budgeting better and hadn't applied for retail store cards. "I found myself with more debt than I could handle," Hunter says.
Don't use your debit card (not much, anyway).
"Rather than use your debit card, consider withdrawing a certain amount of cash from your account per week or per month to help you stay within your budget. Studies report that people spend 12 to 18 percent more when they use cards instead of cash. Cash is useful for emergencies or to make small purchases. Pay attention to your daily cash outlay so you can see how much of your money goes to coffee or other small purchases over time. These can really add up – especially if you're not paying attention. And make the best budget for you. Don't compare your spending habits with friends, as students have differing financial situations. Your first step is identifying what you need (as opposed to what you want) and planning the finances necessary to meet your needs. Then you can figure out how to manage the remainder. Create a budget that allows you to have fun without spending more than you can afford."
Helen Nunn, director of financial aid at Susquehanna University in Selinsgrove, Pa. "I was so poor that I didn't make any monetary mistakes – had no opportunity to," Nunn says. Her father died in a car accident just before Christmas during her senior year of high school, and her mother had a job on an assembly line in a factory that made China. But Nunn scraped through college and earned a bachelor's degree at Grove City College in Grove City, Penn., and a master's degree at Indiana University of Pennsylvania in 1976.
Shakespeare, science, yes – but also, study money.
"One of the most important things students should learn is how to manage their money. Few colleges offer courses in this, but if a student fails to learn it, the consequences are even more serious than failing an academic course. Some students borrow heavily, spend lavishly and end up deep in debt. At the other extreme are students who avoid even reasonable loans, attend the least expensive college without regard to quality and take on outside work that interferes with the educational development. A balance is needed. College years are the time to develop the valuable habits of financial planning, record keeping and budgeting, and to be aware of the difference between investments that will pay off in the future and expenditures that waste resources or incur unnecessary debt."