Student debt is a hot topic in the world of North American higher education. As colleges and universities continually boost tuition costs, many students tend to get buried in a mountain of debt in order to survive their college years. Financial assistance is becoming increasingly common in the college world, and is one of the key culprits behind the student debt issue; however, many students are not fully aware of how to align their personal finances before and after they start college. This tends to create a downward spiral effect on many students’ well-beings, and is creating an overall negative feeling towards the idea of attending college.
However, student loans are not as excessive as they are portrayed to be. Of course, we have all seen student loans on T.V. that range upwards of $100,000, but the average student loan amount is around $38,400.
So what is causing so many current and former students to be stuck in an unmanageable mountain of debt?
Well, there are many other avenues in the college life that, if not carefully managed, can cause a large impact on a student’s finances. Below I will highlight three of these debt-causing vultures that are constantly circling overhead within the college world:
Credit cards have always seemed to have somewhat of a dark history. There are countless horror stories of individuals being drowned in credit card debts, and this epidemic has always floated around the college world. The relationship between college students and many students’ credit card debts can be attributed to not fully understanding how exactly to use a credit card. After all, it is not free money.
The truth is credit cards can actually be quite the helping hand to a college student. Understanding that credit card spending should be tracked and paid off on time each month can help skyrocket an individual’s credit score, setting them up for better opportunities in the future. In the world of college, this can mean better student loan interest rates – we all want those.
Going to college is stressful, and many students fear the thought of acquiring a part-time job, because it would cut into their ability to do homework or go out on the weekends. While this is understandable, many students see their financial aid as a secondary bank account. Much like credit cards, this can get out of hand very quickly.
It is important to take a step back and look at the big picture – your future. Getting a part time job, in order to avoid unnecessary spending on everyday items, can help a student avoid any added burden on top of their student loan repayments.
Having a night out on the town seems to be a weekly tradition throughout the college world, and truthfully, after spending Monday through Friday in a classroom, it is well-deserved. However, it is important to be mindful of spending when doing so. Going out to dinner, buying drinks, and paying for a ride home for you and your friends can easily – and quickly – add up.
Thankfully, there are a number of frugal alternatives for students to still have fun on the weekends without going broke. For example, here in Boise we have a $3 movie theatre, and there is almost always an opportunity to go to a punk show for $5 at a DIY venue. The opportunities are out there, you just have to actively be looking for them.
In summary – yes, college can be a stressful time – both mentally and financially. However, being financially responsible and acknowledging how to conquer your student debts can be a lifesaver – both during and after your time in college.
Thank you for reading. Let’s keep the conversation going! What are some financial tips you have for your fellow college-goers? Tell me about them on Twitter (@trvshlvrd_rr).
This article was contributed by guest author Taylor Tomita.