When I stepped foot in my freshmen dorm for the first time, I had no worries about how hard my classes would be, how much student loan debt I might graduate with, or how I would manage a heavy workload while trying to stay social.
Instead, I was concerned about meeting new friends, where we would be partying that night, and how to start a conversation with that cute girl down the hall.
Sure, every other overly excited freshmen moving in that day was probably in the same boat, but there are a few things that I wish I had considered before I left for college – especially financially.
In this post, though, I reflect on my financial mindset going into college, the (often hard) lessons I learned along the way, and where I’m at today – about a year and a half after graduating.
Every Student Needs to Take a Personal Finance Class in High School
When I lived at home during high school, my parents always knew how much money I was spending and where at.
Though I wasn’t a crazy spender by any means, they often encouraged me to save more for college, be conscious of where I was spending my money, and to look for deals and discounts.
Once I hit college, though, it was a whole different ballgame.
Before college, I paid for some things myself, but my parents helped me out considerably so I could focus on doing well in school. Now though, I was now out on my own and had real expenses – like rent, textbooks, food, drinks, etc. – that I had to use my own money for.
The problem was, I never was required to take a personal finance class in high school.
I had no idea how to budget. I had no idea how credit cards worked. I had no idea how to save money on my student loan debt. And I had no idea about so many other money topics that I had to learn very quickly.
Now I don’t want to blame it all on my high school – I definitely could have done some research on my own – but it would have been nice to be introduced to some basic personal finance topics. In fact, only 17 states require it! This is pretty absurd to me. I mean, we take these classes and go off to college at least partially to make some money. How are we supposed to know how to manage that money when the very basics of managing it are never introduced in formal schooling?
If you happen to be a high school student or even a college student, I encourage you to try to take a personal finance course at school or take some time to research online and educate yourself.
It will go a long way in helping you figure out how to manage your money once you’re out on your own – especially if you had to take out student loans like me…which brings me to my next point.
Learn How Student Loans Work and Create a Plan for Repayment
Much like every other personal finance topic, I didn’t have much of an idea of how student loans worked once I entered college.
My parents briefly explained how interest worked, how I would be required to repay them after graduation, and what I could/couldn’t use the money for, but I kind of had an “I’ll deal with it later” mindset.
Needless to say, this is costing me some extra money today.
Instead of rambling about how I should have taught myself more or how my high school should have taught me more, I will instead just talk about some of the lessons I wish I learned before college:
- You can (& should) pay interest while in school – I never considered making student loan payments during college because, well, it wasn’t required, so why would I?!?! I wish I did though. Since my loans were unsubsidized, interest accrued during college increasing my loan amount a few thousand dollars. If I had just put $50 a month or so towards my loans I could have reduced this amount drastically, making repayment for myself much easier after graduation.
- Just because you have student loan money doesn’t mean you have to use it – When I saw some extra money in my student account from my student loans, I just assumed that I had to spend it. This led me to use some student loan money on unnecessary expenses, such as eating out and on new clothes. Instead, I should have just sent the money to my servicer as a payment to help save me some money in the long run.
- Building credit in college can lead to serious savings later on – I had a credit card in my later years in college, but I wish I had used on (wisely) the whole time. You see, when I graduated, I had little credit history. This caused me to be rejected for student loan refinancing which could have saved me thousands of dollars in interest if I received a lower rate. Luckily, I learned the value of building credit and am well on my way to an 850 (one day!).
Look Into Free Activities on Campus Before Spending
In the beginning of college, I always assumed the free activities that my university sponsored would always be lame. Instead, I went out with friends and spent unnecessarily.
In the beginning of my Senior year, I accidentally walked into a free improv show and decided to stay and check it out. I’m not ashamed to say it was one of the most entertaining events I ever went to through all of my four years.
While I don’t like to live with regrets, I do wish I had given some of the free on-campus events more of a chance. Not only could I have met some other friends and experienced some new things, I could have saved tons of money along the way.
Whoever told me “college is the best four years of your life” definitely wasn’t lying. I loved every minute of college – from the football games to the late nights studying to having one (or five) too many drinks.
If you are about to go to college or have recently started, first off, I am extremely jealous. It really does go by too fast. Enjoy it while you have it because before you know it, you’ll be in the “real world” like me.
My one piece of advice is to try to be smart about managing your money – especially if you have student loan debt. You might have to sacrifice a tiny bit while you’re in college, but you’ll thank yourself in a few years.
Joe is a new personal finance blogger over at Paper Stackers. When he’s not working, you can find him doing fantasy football research, reading a good book, or playing lacrosse. Follow him on Twitter @Paper_Stackers