Pizza, Road Trips & Debt: Managing College Living Expenses

Many young people start living on their own at some point while they are in college and develop a much more active social life. These are both great things, but they come with a substantial price tag.

All too often, people do not really start learning how to manage their money until they go to college. In addition to student loans debts, numerous college students rack up personal debts that they can easily avoid.

The Collegiate Credit Card Landscape

Up until a few years ago, college students were deluged with credit card offers from predatory credit card companies looking to take advantage of their financial inexperience.

In order to enforce the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Federal Reserve imposed stricter rules on credit card companies.

One of the most significant changes is that now anyone under the age of 21 has to either prove they have adequate income to pay off their credit card debts or a co-signer with good credit. It is a great idea in theory.

Credit Cards Are Still a Problem

While this may seem like the law offers the right debt solutions, the problem is that many of them convince their one of their parents to co-sign for them. The parents do so willingly because they think they are helping their child build good credit.

In reality, more often than not, they wind up using their credit cards unwisely by living beyond their means and making unnecessary purchases. Using credit cards to manage your living expenses will put you in a debt crunch that will only get worse after you graduate.

Travel Costs

Students who choose to go to a college or university in a different state often travel home for holidays, semester breaks and important family occasions.

Keeping a close relationship with your family is a great thing, but it is a huge expense for students who most likely only have a part-time job and might otherwise remain debt free. It is great if you want to be independent and show you can handle things on your own, but do not be foolish about it.

Instead of putting a road trip on your charge card, be honest ask your parents for money to come home. They will understand and probably be glad to help.

Don’t Be The Go-To Person

People do not always want to admit it, but parties and college tend to have a ubiquitous relationship. Besides the dangers of binge drinking and acting irresponsibly, there are financial problems with the situation as well.

Many college students try to impress their peers by always offering to be the one who buys the food. While it may be flattering to be “the life of the party,” do not try to impress people with money you do not have. If you have a party, let everyone bring their own food/beverages or split the cost as a group.

Going Beyond Your Meal Plan

Even though an author who recently wrote for The Washington Times considers pizza to be “brain food,” pizza delivery is an extra expense you can do without.

A typical pizza costs $15 – $25. Even if you are modest and order once a week, that is still at least $60 a month in consumer debt you are creating for something you could get with your meal plan.

The days of grimy college cafeterias are long gone. The majority of colleges’ dining options now are more like restaurants. Take advantage of your meal plan and buy a microwave for your dorm room if you have to, but stop ordering out.

Dating & Socializing

People meet in college and they go out together. It is an inevitable expense. That does not mean that you cannot plan for it though.

Create a budget for yourself and include weekly entertainment expenses. After that, the difficult part is staying within that set amount. There may be nights where you say to your friends that you have to stay in or you may not be able to afford to take a date to pricey, upscale restaurant.

It is tough when you have to pass on things you want to do, but it is better to stick to your budget than to run up your credit card balances.

Students Loans

Borrow as much as you need, but you do not always have to take the full amount that they offer every semester. Many students take the all they can get and use the extra money for living expenses.

Here are some guidelines for figuring out how much you should borrow in student loans. Of course, you want to take more than just what you need for tuition, because you need some money for books and supplies.

However, do not run up your student loan debts more than you have to just for some “funny money” to buy clothes, socialize, or other frivolous things.

Create A Savings Account

Take advantage of your summer break and get a job. While you are working those summers, do not spend every cent you make. Put some of that money aside in savings account.

You may have to adjust your budget a bit to include extra money for gas, but, otherwise, you should live off the same amount of money during the summer that you do during the school year.

Any income you make above that should go into your savings account for emergency expenses. You can even use a small portion of it to add to your entertainment fun, but do not run the account dry.

Learning how to manage your money while you are in college is tough, but the lessons you will learn will pay off later in life. For one thing, it will be much easier to repay your students loans after you graduate if you are otherwise debt free.

Most importantly though, you will be in a better financial shape for the rest of your life by learning to manage money while you are a young adult than your peers who just go out and spend like there is no tomorrow.

Related Posts

The following two tabs change content below.
Tony Standin

Tony Standin

Tony Standin is a personal finance specialist with a passion for helping college students gain true financial independence by graduating with as little debt as humanly possible. He has written for a number of finance sites online, including debtconsolidation.com, and encourages anyone with debt issues to get help before they become unmanageable
Tony Standin

Latest posts by Tony Standin (see all)