All around the country, newly minted high school graduates are heading off to college.
They’ll be taking a lot of things with them, but statistics tell us that financial literacy is not likely to be one of them. If I could spend a little time with these awesome students, I’d attempt to cram the basics of money management into their heads and then pray that they penetrate their hearts.
A budget is your friend. That means ...
1. You have a written plan for how you are going to spend and manage money.
2. You use that written plan like you would a road map, consulting it often.
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.
Live with cash. 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.
Get a free checking account. These days, it’s not easy to find free checking accounts with no strings attached — no monthly fee, no minimum balance requirement and no minimum deposit. But many banks, such as U.S. Bank, offer free student accounts that fit these criteria.
Credit card debt. Don’t be ridiculous. Credit card debt — a balance owed 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 not dealt with swiftly, it will do horrible things in your life.
Never use a credit card to pay for things because you don’t have enough money. If you don’t have the money this month, what makes you think you’ll have it next month? Any amount of credit card debt will put you on the fast track to financial trouble.
When you do use a credit card, make sure you pay the statement balance in full — right down to zero dollars every single month, without fail.
Credit limit. It’s super easy to see your credit limit on your credit card statement as your money — like it’s there and it’s yours to spend. It’s not your money. It’s the bank’s money that it cannot wait to lend to you at a ridiculously high interest rate.
Eat your food plan. If you or your parents have paid for the school meal plan, you need to know how many meals are covered and then do something remarkable: actually eat those meals.
If you’re eating pizza in your dorm room or driving through Burger King instead, you’re just throwing away money. It might feel cool to spend your money like that now, but you will regret it later.
Don’t become a Starbucks regular. I want to say never, but I’ll compromise a bit on this one. Seriously, the coffee at Starbucks or Coffee Bean or any other trendy coffee house is so expensive it brings tears to my eyes.
Let your grandparents and others know how much you love Starbucks gift cards. They are anxious to know what they can send to you while you’re away. Then use the gift cards instead of your cash. Or buy an inexpensive coffee maker and make coffee in your room instead.
Buy or rent used textbooks. The cost of new textbooks is going to be so shocking it will make you want to chew your hair. You can cut that cost in half at least by buying used books online or even renting them.
Take good care of them so that when you’re done, you don’t get charged a damage fee on rentals, and so if you purchased them, you can sell them back.
Take these basic money principles and apply them to your life now. Take money management seriously. You will never regret it.
And have a great year!
Bags, bags & more bags
ARCHERY BAG. Collect plastic bags of all types, and stuff them into a burlap bag. You’ll need to collect quite a few, but better you than the landfill, right? Once full of plastic bags, that burlap bag makes a great archery target. Plastic bags will stop the arrow but allow it to be removed easily.
SHAMPOO BAG. If you are going on a short trip or an overnight stay, it can be a pain to pack your large bottles of shampoo and conditioner. Just put a small amount of each into plastic zip-type bags. That way, you will only be carrying what you will use, and you can toss the bags when you return.
GIFT BAGS GO ‘ROUND. Use gift bags instead of wrapping paper. We save our gift bags each year, and it’s always fun to see who gets a particular bag the next year. Start a tradition of writing the names in the top corner. Add the next name each year, and see how the bags go around.