Wanderer Business is excited to feature Bridget Casey, founder and author of the popular blog “Money After Graduation.” Bridget Casey graduated from the UofA in 2010 with a Bachelor of Science in Chemistry & Biological Sciences. She founded Money After Graduation to chronicle her journey out of debt and to help other 20-somethings manage their money. She currently lives in Calgary, where she works as a freelance writer and is completing her MBA at the Haskayne School of Business.
I know a lot about making mistakes with your money as a student because I made nearly every one. I spent my student loans on new clothes and had to scramble when tuition came due, I went out for beers with money I needed to buy textbooks with. I never wanted to live like a poor student — and consequently I was forced to after I graduated in order to pay off the $21,000 in student loans I’d racked up in my BSc. Here are a few mistakes students commonly make so you know what to avoid!
Letting mom & dad foot the whole bill. If your parents are both generous enough and able to fund your post-secondary education, count yourself lucky. Many of your peers are taking the financial burden of their degree on themselves, and that’s no easy task. That said, just because the Bank of Mom & Dad is giving you a leg up doesn’t mean you get to skip out on life lessons in financial literacy. Regardless of who is paying the tab, you still need to learn how to use money responsibly, and one of the easiest ways to do that is to take on some of your university costs yourself. It doesn’t have to be much, but doing something like paying for your textbooks or residence meal card will both give you an appreciation for the full cost of your college experience and relieve some of the burden off your parents.
Spending money in the wrong places. What constitutes a “need” in college life depends on who you ask. I’ve seen students advocate for everything from beers on Friday to iPhones. In reality, your needs are keeping a roof over your head, food in your stomach, and your tuition bill paid. Everything else is a luxury. This doesn’t mean you can’t enjoy yourself occasionally throughout your degree, but maybe cut the $5 latte habit you “need” to get through a MWF class. Graduation might seem a long way off, but there will come a time when you wish you’d skipped some Friday nights out as a student so you could enjoy yourself while working instead of being saddled with a gigantic student loan debt!
Failing to save (even a little!) during your degree program. The mantra of an indebted student is often, “I’ll catch up when I’m making money!”. You’ll pay off your loans, you’ll start saving for retirement, you’ll accumulate enough money for a downpayment on a home. Sure you will. But saving is a habit that can sometimes take a lot of practice, so if you can learn it when you don’t have much, it will pay off big time when you do. If you can manage to put $100/month away through a 4 year program, you’ll graduate with $5,000 in the bank. Kind of gives you a bit of a head start on those student loan payments, doesn’t it? If $100/month is too much, save $50/month — you’ll still graduate with $2,500. If you think $50/month is too much to save you need to stop spending so much money at the bar.
Photograph courtesy of 401(K)2013 on Flickr