bargaineering.com - Money Tip To Rule All Other Tips
Graduate college with as little debt as you can. If you followthis one tip and ignore all others, you will find yourself ahead ofthe pack by far. For many, myself included, this means graduatingwith some student loan debt (I had and still have over $20k instudent loans) but that’s OK. Avoid credit card debt at allcosts.
Consider this, if you owe $1,000 to your credit card at 18.90%interest, you will pay $211 in interest over the course of 25months if you make only the minimum payment of $50 (typical minimumpayments are 5% of the balance). It may not seem like a lot rightnow but it’s a significant drag on your finances. Youdon’t want to be paying for a six pack of beer for the nexttwo years.
Second Most Important Money Tip
The second most important money tip I can give you is that youshould have fun while you’re in college. You will never againhave the same mixture of freedom (no parents!) and direction (go toclass!) in your life, so take advantage of it. Take advantage ofall the free seminars and conferences your school will no doubtoffer, go to the free movie nights and participate in intramuralsports. Most of all, leave your comfort zone and try things youdon’t think you’ll like because you never know what canhappen. Best of all, most things on campus will be free(technically it’s included with your tuition) so takeadvantage! Once you graduate, everything will cost money.
Banking & Credit
Open a local bank account: You’ll need a place to depositchecks and withdraw cash, find a local bank with convenient ATMaccess. Most banks offer fee free checking for students, takeadvantage of those offers. Don’t pay any account maintenancefees, you should be able to find a bank that won’t chargethem.., or….,
Open a credit union account (if available): Credit unions arebetter than commercial banks because they generally have yourinterests in mind. They offer better interest rates on almosteverything when compared to a commercial bank. Having arelationship will make it easier for you to get better rates onloans should you need it.
Get a credit card: Credit card companies won’t let youget a credit card until you’re 18 because you can’tsign a legally binding contract as a minor. If you don’ttrust yourself to use the credit card wisely, set your permanentaddress as your parent’s home and cut up the card. Here thecards I consider to be the best student credit cards.
Don’t get more than one credit card: You won’tneed more than one card and having them is either going to temptyou into spending more than you should or just weigh down yourwallet or purse. If you’re thinking about optimizing yourcash back, reconsider your spending because you shouldn’t bespending enough to justify the added time and hassle.
Avoid situations where you give up your personal details inan unencrypted form. That was just a long way of saying don’tsign up for a credit card at a table someone set up in your studentunion or out on a grassy field. You have no idea who that person isand they don’t work for a credit card company. They’rebrokers that end up selling your data to companies. Apply for astudent credit card online so that no one ever sees yourinformation in the open.
Don’t use your student loan on anything other thantuition: If you are getting a student loan, put it towards yourtuition, meal plan, textbooks, or other academic fees and expenses.Don’t spend it on anything else or you’ll regretcarrying that debt for the next twenty years.
Remember, your first job is to graduate: If you take on a job,remember that your first “job” is to graduate early oron-time. If you take a job solely for the paycheck, be sure that itdoesn’t interfere with your first job. Earning some beermoney is great but remember that those semesters of schooldon’t come cheap.
Seek jobs for apprenticeship and networking opportunities: Ifyou need or want a job, seek out positions that put you into theapprenticeship of leading professors in your field. Try to getpositions that you can put on your resume as that will bolster yoursummer internship options later on.
Get letters of recommendation: If you have a resume-worthyjob, be sure to get letters of recommendation from your bossesafter major accomplishments or the end of your tenure there. Thisis a good habit to get into as it can act as both a letter ofrecommendation for future employers and a reminder of youraccomplishments.
Seek jobs for personal development: Now is the time tobroaden your horizons. If you don’t feel like doing researchin a lab or be an admin to a high powered [whatever], go forsomething that you can enjoy and that will contribute to yourpersonal development. Love to bake? Work at a bakery. Want to helppeople? Try a non-profit.
Considering starting your own business: There is onecommodity you will probably have in great abundance - time.
Consider starting a business on your own or with some friendswith complementary skills. While I was in college, I earned alittle money buying and reselling things on eBay. There are plentyof success stories about businesses that started with nothing butan idea between college friends that are now gazillion dollarcompanies (Heard of Google?).
Go to job fairs every year: Some career advisers suggest thatyou don’t go to career fairs until you’re a junior orsenior, I think that’s horrible advice. Go every year, evenyour freshmen year. While you shouldn’t get your hopes up,many are there looking for full time employees, you will getfamiliar with how they work and be more comfortable (less nervous)when you’re going for real during your junior and senioryears. If your school offers a summer internship fair in additionto a full on job fair, go to those instead (when they’resegregated so clearly, you don’t want to be wastingpeople’s time).
Saving & Investing Money
Open a Roth IRA: If you’ve earned a little money and arefiling a tax return, open a Roth IRA to start saving forretirement. Roth IRAs are retirement accounts where you contributeafter-tax dollars and your gains are tax free. It’s afantastic retirement vehicle if you can take advantage of it.
Start an Emergency Fund: You might not think that there aremany emergencies for someone in college, but the reality is thatyou never know. Do you have a car? You could run over a nail andhave to replace a tire. What if you lose a textbook or your laptop?Start putting a little away for those unforeseen events so youwon’t have to rely on plastic to get through them.
Save 10% of Your Earnings: Try to get into the habit ofsaving 10% of your money as if it were a bill. At first this 10%will go towards an emergency fund or retirement accounts, buteventually it will go towards your savings goals like a house or acar.
Learn about investing: Outside of retirement accounts like aRoth IRA, you probably won’t want to be investing yet unlessyou have more than a few hundred dollars. I recommend checking outsome of these stock market investing resources and giving those aread.
Trade stocks on paper: If you’re itching to try stockmarket investing, don’t put your money at risk and just tradewith virtual portfolios. It’ll let you see the results ofyour decisions without any risk (or reward). Marketwatch has apretty useful Virtual Stock Exchange you can use.
Read about investments outside of the stock market: Youwon’t have enough savings to invest in areas outside of thestock market (or even in the stock market, but that’s OK),bus learning how things like options and derivatives work will beimportant down the road. Even if you never get involved in options,it’s important from a general knowledge perspective to knowwhat things like those area.
The marketplace is a battleground: The number one lessonabout spending money is that it’s a constant battle betweenyou and businesses. You want to get what you need and spend aslittle as possible. Businesses and marketing firms are going to tryto trick you into spending as much as possible. How much you spendon something does not affect how good it is, regardless of what themarketers try to get you to believe.
Learn to identify wants and needs:One key skill in navigatingthe battleground that is American capitalism is learning toidentify wants and needs. You can start with Maslow’sHierarchy of Needs to truly get a handle of what you really needversus something you merely want. The key difference is that a wantis more expensive.
Learn to bulk buy items with friends: Stores are alwayswilling to take a little less profit if they can sell more units,so try to find friends who can go in with you on bulk purchases. Ifyou see a buy one get one free sale, find friends who need thoseitems and split the cost.
Share whenever possible: We revisit this later on but try toshare things that aren’t consumed when used, like wireless orcable television services. This is harder with things that areconsumed when used, like shampoo or milk or whatever (though youcan still do it), but sharing can cut down your costssignificantly.
Sign up for & use store discount cards: Almost everygrocery store in the country has a customer loyalty or club cardthat will get you discounts on certain products, join them. Get inthe habit of using these cards to cherry-pick deals.
Buy used whenever possible (and reasonable): College is fullof used stuff from graduating seniors and international students,stuff they don’t want to take with them when they leave. Manythings are just as good used as they are new, so take advantage ofthe huge discount you’ll get.
Buy textbooks used: A month before the semester starts, checkwhich books you’ll need an buy them used. Check yourschool’s for sale boards, Craigslist, and Amazon for the bestdeals. Never ever buy them from the school bookstore brand new andavoid marking it up if you can to improve resale value.
List textbooks online a week before finals: Likewise, listyour textbooks online about a week before finals. That way by thetime it sells, you will have no need for them. If the book is beingreused the next semester, list it on your school’s for saleboards. You will earn far more selling it locally than on awebsite, which takes a commission.
Don’t buy too much stuff: Eventually it will be yourturn to graduate and be that graduating senior or internationalstudent trying to get rid of your stuff on the cheap, try to buy aslittle “junk” as possible and save yourself some movingpains.
Learn to put off purchases for one week: If you see somethingyou want, force yourself to wait a week for it. Use that week tofind a better deal or a coupon for that store. If you still want toget it after a week, get it. If you don’t, you’ve savedyourself some money on something you didn’t even want a weeklater.
Learn to use mass transit: Most cities are a maze of busroutes that would confuse even the smartest of brain surgeons,learn to use them. At CMU, we were able to ride the buses free ofcharge (we paid a semesterly fee, so technically we did pay) oncewe learned how to navigate them. For those living in cities withgreat trains (New York City, San Francisco, and Washington DC cometo mind), you get a lucky break. Mass transit is almost alwayscheaper than driving.
Have fun responsibly: Some people will tell you that youshould save up your money and not have fun, that’sunrealistic and unfair. By having fun responsibly I mean that youdon’t go into debt at all to have a good time. Save up themoney you need and don’t charge it on a credit card if youcan’t pay it off in full.
Have fun on the cheap: The beauty about college is that mostcollege kids don’t have a lot of money so they find things todo that are extremely cheap or free. Consider joining arecreational club that takes advantage of school resources. Thereare often plenty of clubs available where you can have fun andspend very little.
Start a club: Are you a fan of board games but there is noboard game club at your school? (this is highly unlikely) Startyour own, get some members, and petition for funding. Even if itdoesn’t work out, you can have fun trying to wrangle some ofyour tuition and fee money back from the school.
Learn to budget: Budgeting is important because it gives youa good idea of where you stand each week or month. This is a goodskill to learn and get used to because all of your future financialdecisions will hinge on knowing how much you usually spend onwhat.
Set up a system to pay bills on time: Link up electronicpayment for all the bills you can and setup a reminder system thatwill help you remember to pay bills on time. My personal favoriteis to have the bills electronically delivered to my main emailaccount. Once I see the bill, I log into my account (by visitingthe site directly, not by clicking on a link) and electronicallyscheduling the payment.
Use the gym: There will come a time, after you’vegraduated, that you will sign up for a gym membership that willcost more than $50 a month. That’s when you’ll kickyourself for not hitting the free gym while you were in college.Plus, it’s good for you.
Reduce boarding expenses as much as possible: The best dealsfor housing are the off campus ones you can share with seven ofyour closest friends. I’m just kidding, find yourself aquadruple you can share with three friends and it’ll probablysave you some money. You can use the money saved ontextbooks… or more beer (see the tip about having fun).
Split the wireless bill with your neighbor: If you live closeenough to your neighbor, ask to split the wireless bill. Unlessyou’re downloading video or music or games via torrents, thebandwidth is going to be enough for both of you to surf the webwithout incident (and you save a few bucks).
Finally, Be Creative!
Creativity trumps money and as a college student, you coulduse your abundance of time to exercise some creativity ineverything you do. Whether it’s a clever and unique firstdate or trolling around the student center or popular meeting areasfor leftover conference food to snagging free t-shirts at jobfairs, use your noggin to save a few bucks. That skill will paydividends even after you start pulling in a full-time salary.
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