Everyday Cheapskate: Crash Course for College Freshmen
All across this great country, college campuses have welcomed a new class of freshman. These young people arrived with a lot of things, but financial literacy was likely not one of them.
If I could spend a little time with these awesome students, this is what I would attempt to cram into their heads and then pray that it penetrates their hearts:
A BUDGET IS YOUR FRIEND
That means you 1) have a written plan for how you are going to spend your money 2) you use that written plan like you would a road map, consulting it often, and 3) you use a site like Mint.com or a pencil and paper to record how you spend every nickel. Sallie Mae has a monthly budget worksheet you can print out to help you estimate your costs and keep expenses under control. Do not attempt to do this keeping-track thing in your head. You are amazing, but don't push it!
GET A FREE CHECKING ACCOUNT
It's not easy these days to find free checking accounts with no strings attached -- no monthly fee, no minimum balance requirement and no minimum deposit. But many banks like U.S. Bank offer free student accounts that fit these criteria. Explore banking options in the city where you will be attending school, or find out if the bank or credit union that your parents already use offers free student accounts and has a branch near the college campus.
CREDIT CARD DEBT
Don't be ridiculous. Credit card debt -- a balance owing that you roll over from one month to the next, paying only the minimum required plus interest -- has the potential to sink your ship. Think of it like cancer. At first it's just a tiny thing that's not that big of a deal. But then it starts to multiply, and if it's not dealt with swiftly, it will do horrible things in your life.
LIVE WITH CASH
Your generation has been somewhat brainwashed to believe that plastic is the only safe way to pay for things. That may be true if you buy things online, but overall it is just not true. I don't have the time or space to get into a long dissertation on the subject. Just believe me when I tell you that using cash -- currency, greenbacks, dollars, coins -- will simplify your life and keep you from overspending.