What I Wish I Knew Before Going To College (Money Management Included)

I actually started this blog because of my student loan debt. Living with so much debt impacts your life—where you can live, how much you can save, whether or not your ends will get to meet one day.

If and when I generate any income from it, I’ll give all of it to Navient. Every last cent.

If I never make money from it, I’ll be content with the personal finance knowledge I’ve gained since I first started.

I’d really prefer to make money though.

Recently, I asked a few friends to share their perspectives on college. Given what they know now, would they do everything the same?

Here’s what they said.

Let’s call them Mike and Natalie.

What was your major, and did you stay in-state for school?

Mike: I double majored in History and Japanese Studies. I stayed in-state.

Natalie: I double majored in Biochemistry and Spanish. Yes, I stayed in-state, but I didn’t want to.

Why did you choose the school you did?  

Mike: I liked that they had a language program on campus since I wanted to learn Japanese and possibly study abroad for a long time.

Natalie: It was the best option for me at the time.

Given what you know now, would you approach college the same?

Mike: Yes, I would approach it the same because I had the privilege of attending a college prep school that assisted me with the process.

They made sure to motivate and encourage us to always have college as the end goal after high school. However, one thing I would change would be to apply to more scholarships. I applied to a few but felt that I could’ve had less loans if I buckled down and applied to more.

Natalie: No, I would not approach college the same. I would have done a more practical major through another university. 

Would you attend the same college?

Mike: Yes. Since I went to a small middle and high school, I was used to small class sizes with fewer students, and my college was able to provide that for me.

Also, while the campus was small, I didn’t need to travel far to any of my classes. Lastly, they had a Japanese language program that allowed me to not only learn the language but to study abroad while taking all the credits that I received there. I was very happy at my college and wouldn’t trade the experience for the world.

Natalie: Only if they would support my doing a more practical major through another university; otherwise, I would transfer.

Would you approach your financial literacy and money management in college the same?

Mike: No, because I felt that I spent a bit too much and was not making an effort to try and pay my loans during college. I would try and save a bit more money and try to pay down my loans a bit if I could.

Natalie: My approach to financial literacy would likely be the same. It is difficult for young people, most of whom do not have a job, to understand the costs of school.  It is really up to the parents and the school (both high school and University) to educate the students.

Based on your experiences, what should entering college students know about the costs of college or about spending habits during college?

Mike: They should know that while their “tuition and room & board” might be covered by their scholarships/loans, that doesn’t include books and other supplies that classes might ask their students to buy.

They should save up for those initial purchases. Also, I would recommend renting books from third party companies, instead of buying them, since it’ll save you a lot of money from buying their books from the school bookstore.

Natalie: They should really understand the breakdown of the school costs in terms of tuition, room and board, associated fees, but most importantly, interest rates.

I honestly do not believe that many will understand what it means for their full tuition to cost $60,000 unless they are borrowing all that money (themselves) because most parents are paying for it.

But if they understand interest rates, it will make a big difference. For example, the biggest shock was talking to a friend about my plans for grad school, and having the much older friend tell me that my interest rate was more than his house mortgage.

I truly then realized how expensive school was.

What are some things new students should know about how to save money in college, or what things they shouldn’t “waste” money on? 

Mike: They shouldn’t buy books unless that is their only option, or unless they want to. Also, they should try and take advantage of their meal plan and save their money for the weekend if they would like to go eat out.

I’ve known many students that would pay for a meal plan but rarely use it and eat out quite often instead.

Lastly, make a list of items that you would “truly” use since there’s a habit to buying everything since you’re away from home. In reality, you will hardly use all of it. I was so surprised by what students threw away at the end of the year!

Natalie: Save money by getting a job in the summer, or an easy job during the school year, so that you do not borrow more than necessary.

Open a savings account, use the money you save to open certificate of deposit or IRA accounts.

It’s expected that you’ll spend some money eating out and going to games as part of the college experience, but be reasonable about your spending.

Don’t blow thousands of dollars on spring break vacations. Have fun, but always  be aware of what you’re spending.

In general, what advice would you give to high-schoolers about the college experience?

Mike: College is very much like high school but the difference is that you no longer have supervision (unless you’re a commuter student and live with your parents).

You’re on your own and have to learn (if not taught beforehand) how to live on your own. Like doing your laundry, cooking, paying bills, etc.

Natalie: University is different from high school because no one tells you to do homework. You are very free to live your life as you please, which is good as long as you understand that there are consequences.

Get a practical degree.

A practical degree is a degree that, once you finish, will allow you to get a job that gives you a solid paycheck. A solid paycheck in my opinion is at least $40-45K as a starter. In the health world, I think of respiratory therapy, nursing, physical therapy, etc.

Other careers include accounting (you will always have a job), Engineering (the classical ones like chemical, mechanicals, electrical, civil).

This is not to say that you cannot get a good job with an English degree or as a Biochem major. I just felt that if you wanted something outside of the typical path that your major slated you into, you had to get really creative.

Go intern at these big companies for a summer and get a real resume going.

If you do not want to go into those practical fields, have the foresight to start doing your survey early on about the type of work you would like to do when you graduate– something that will help you live comfortably and start taking care of yourself.

Also know the compensation rates and requirements of the job, and start lining yourself up for that opportunity through internships, etc.

For example, during school, I met a woman who was into theatre, but she declared her major as chemical engineering. When I asked her why she chose that, she said she wanted to be in Broadway one day, but in the meantime, she needed to study something that would keep her financially comfortable while she chases that Broadway dream.

Waiting tables was not where it was at, she said. I remember this distinctly.

Given what you know now, would you go again?

Mike: Yes, like I said, it caused me to change for the better and gave me lifestyles that I might not have if I hadn’t gone. Especially traveling abroad since I learned to adapt to new surroundings and be mindful to them.

Natalie: While it was formative, I would not return to University in the future. I did not enjoy it enough to want to return. I have had better experiences in life.

Are you satisfied with your degree?

Mike: I am for the experience that they gave me, however, I feel that it didn’t gave me a clear career pathway like other degrees. I would have done more internships over the summer break to balance out my work experience and make it easier to find a job after college.

Natalie: Yes.

Is there anything else you’d recommend?

Mike: I would recommend every student open a Digit account. It makes saving SUPER simple since it does it in the background.

This is great for students since the obligations of school can cause some students to forget to save.

Also, I would recommend that students use a budgeting app like Mint or one with their own bank (because most big banks offer a budgeting app now).

This will keep track of your purchases and where you’re spending your money.

I would recommend to not only study but look for internships or volunteer opportunities during the summer break to gain work experience that many jobs expect now.

Also, start a investment account, like Betterment, and begin saving for retirement/home/car, etc. since those big purchases will happen eventually.

I double-majored in History and Japanese Studies, but I might’ve studied something a bit more lucrative. Honestly, looking back, I wouldn’t focus so much on what I studied as I would on getting some job or volunteer experience to see what job I’d eventually like to pursue. That would’ve helped guide me to what I needed to major in.

Lastly, have fun and enjoy yourselves! It’s a once in a life time experience!

Natalie: I think that everyone should take some sort of economics/finance/accounting class, but especially accounting.

Get mentors who’ll look out for you during your first year of University, and who’ll ask you tough questions and tell you tough truths that will help you refocus.

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