Millions of fresh-faced Americans who graduated from high school in the spring are about to take the first steps into adult life. Chances are good they are riding an emotional roller-coaster that alternates between bewilderment and anxiety.
Many of these young adults likely are wondering about one thing above all: “How in the world am I going to pay for all of this?”
I asked this same question three years ago, but now I’m putting myself through college. Below are seven things I learned that might help today’s incoming students make smarter financial decisions when contemplating college life.
1. It’s OK to delay college
If you didn’t plan your college education during the final years of high school, there will be little to gain by rushing to catch up now. Making quick, careless decisions will just leave you wasting a load of money on an education that is neither desirable nor practical.
Instead, take a year or so to mull things over. If you haven’t already, get a job and work as many hours as the boss will give you. Working for minimum wage will likely show you exactly what you don’t want to do for the rest of your life.
The few months I spent on the graveyard shift was enough to get me thinking about my future.
2. Staying home can fatten your wallet
Do your caring parents despair at the thought of you growing up and going into that nasty world all alone? Congratulations! You may be eligible to take the “stay at home until your mid-20s” package.
Many millennials have done this — either out of choice or circumstance. I am among them.
Had I moved out on my own, I might have been doomed to a paycheck-to-paycheck dead-end of an existence, with nary a penny to spare for college or an emergency fund. It is fortunate that my parents let me live with them rent-free until I can gain independence. If your situation permits, I encourage you to do the same.
While you’re at it, stay on your parents’ cellphone and insurance plans. Do these things and be shameless about it. It’s a great way to save money.
3. Spending judiciously helps you save more
You have a minimum-wage job, you’re living rent-free at home, and now you have this lovely disposable income: Whatever will you do with it?
Save it. Put a certain amount away in a savings account at a regular interval — maybe once a month — and don’t touch it. These savings will serve as a college fund, and will double as emergency cash if and when the Spam hits the fan. Two unexpected trips to the auto mechanic made me grateful for this cash cushion.
You might also want to apply for a credit card and start building credit at this point. More on this later.
Be frugal and focus on the necessities. It’s OK to set aside some cash for one or two hobbies or activities that you can’t live without. Just make sure to cut frivolous expenses elsewhere. I made up for my favorite indulgences by limiting dining out and other pricey outings.
4. It’s smart to look past fancy — and expensive — colleges
Once you have saved a tidy sum, you’re ready to start thinking about education. My unprofessional advice is to avoid super-deluxe, ultra-premium, “you’ll never afford it” schools. The money you have saved will only go so far, and you want to avoid being in debt with student loans for a considerable amount of time after graduation.
So, don’t overlook options such as community college or trade school. In fact, attending a trade school may be more promising as the demand for these jobs rises.
These schools are far cheaper than traditional college while still offering a solid education. What’s more, they’ll have you ready to enter the workforce. If you find that you still want to attend a university, you might be able to transfer many of your credits.
5. Always pursue the free money first
I am wary of student loans and have steered clear of them. Although my savings have been adequate to pay for school, you might find yourself in need of financial help. If so, leave loans for a last resort.
Instead, look at grants. Through the Free Application for Federal Student Aid (FAFSA) program, you’ll be informed if you qualify for any federal grants, such as the Pell Grant. Check with your school’s student resources to know what scholarships or other programs may be available to you.
If you must borrow, having a credit card can be useful to you. Establishing credit may be necessary for some student loans, although you can still get federal student loans without credit. Visit the Money Talks News Solutions Center, and you can search for the perfect credit card for you.
Also, keep records and receipts of every school-related purchase so that you can later document them on your tax forms. Keep an eye out for tax credits for which you might qualify, such as the American Opportunity Tax Credit. This will help increase the amount of money you get back after filing taxes — or help offset the amount you owe.
6. A little effort can turn up a steal of a deal on textbooks
Next to loans, nothing is more irritating about college than the exorbitant price of textbooks. Your campus bookstore will offer some books either used or for rent. But don’t stop there.
If a “new” edition isn’t required, you might be able to get your book secondhand from students who have taken your class previously. Or, try sites such as Amazon, Chegg and others. You can also find free PDF files if you scour the internet.
As someone who has bought books at the full price — some of them costing nearly as much as the courses — I can tell you that such deals are definitely worth the search.
7. It’s smart to learn from the wisdom of others
Listening to the testimony of students who sat in desks before you can keep you from wasting money on bad teachers. Despite some flaws, RateMyProfessors remains a valued resource among college students. It offers many student insights into courses and their instructors.
So, look up potential professors before you register for their courses. Having a reliable and competent instructor with a teaching style fitting your needs is important if you hope to maintain good grades. RMP mostly has done right by me.
Whenever you can, try to listen to and benefit from the wisdom of others. Part of getting the best education — and not wasting money in the process — is educating yourself about your choices when selecting a school and your teachers.
Have you learned valuable money lessons to pass on to today’s students? Share them in comments below or on our Facebook page.