By this time of year, incoming college freshmen and their families have been consumed with college preparation.
Financial issues should be as important in your planning as dorm furnishing and class scheduling. Most students entering college from high school are inexperienced in financial matters.
They are about to be “on their own” for the first time in their lives. Errors made in the handling of money can haunt young students for years to come.
As you shop for dorm furnishings, electronics and clothing, keep these pointers in mind:
• Know the return policy of the store where you’re shopping and save your receipts. Check to be sure the store has a location near the school.
• Save boxes and packaging for electronic merchandise.
• Ask whether there will be a restocking fee charged on returns. Some are as high as 20 percent.
• Use caution with online shopping. Know a store’s physical location and phone number. Be careful when giving out your credit card number.
US News and World Report recently asked several financial experts for their advice to incoming freshmen. Here are some of their cautions:
• Don’t forget that credit cards are not ATM cards. They are loans with usually high interest rates, and balances can rocket quickly. Never spend more than you can pay off in full at the end of each month. Many experts advise against students having any credit card at all in college. There is plenty of time to build credit after college.
• Keep in mind that your wants can be limitless, but your resources are not.
• Don’t try to keep up with those who have the means — or act as if they have the means — to spend more than you. A sure sign of real maturity is knowing how to do this.
• Consider sitting down and figuring out a budget for your daily spending.
• Rather than using your debit card frequently, withdraw the amount of cash your budget will allow you to spend per week or per month and rely only on that. Studies have shown that people spend 12 to 18 percent more when they are using cards instead of cash. Again, when figuring out your budget, don’t compare yourself with friends. They may have more to spend or be unwise in how they spend.
Learning how to manage your money can prove to be the most useful lesson acquired during the college years. The consequences of not learning this can be more serious in the long run than failing an academic course.