Gregory McTaggart

Get Rid of College Debt Before It Happens

When going to college, it's essential to develop a realistic budget that works for you (and your parents, if they're helping). Start with your fixed expenses and work through to the variable expenses. The average college student has at least one credit card at their disposal. Not a good idea, especially if you're not working. Know that credit card companies target college students with savvy marketing techniques.

Let me recount the story of a favorite nephew. At Thanksgiving dinner he announced that he needed more spending money-$300 to get him through school until Christmas break. This was less than 3 weeks away. By the reaction of his parents, it wasn't an unusual request. When someone else asked him what he did with so much money when all of his living expenses, including food, were covered, he didn't want to answer. Finally he mumbled something about going to the movies, buying CDs, going out to eat, and then shrugged his shoulders.

Everyone was shocked, except for his parents-shocked that with all the planning that went into getting him to college, he was unprepared to keep himself there. Among other problems, he had no money management skills. Needless to say, he didn't return the following year and wasted thousands of dollars on credits that were not transferable due to low grades.

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When going to college, it's essential to develop a realistic budget that works for you (and your parents, if they're helping). Start with your fixed expenses and work through to the variable expenses.

· Housing-Just like any other budget, this is the single biggest expense. Whether in the dorm or out, know what it costs and how it has to be paid-by the semester or by the month.
· Transportation-If a car is allowed on campus know what it costs to have it there-gas, maintenance, and repairs. Typically, freshmen don't need cars. It's time to get out your bike.
· Food-Even in the dorm, basic groceries are always needed. Pizza, mac n' cheese, soda's. Do you know how much Starbucks or Caribou coffees cost you each month?
· Utilities-Cell phone. Need I say more? A monthly plan with text messaging can get out of control fairly quickly. Pre-paid cell phones are a great way to help you stick to a budget. If you're in an apartment, you'll have electric and gas bills.
· Personal-Based on my nephew's experience, you can be way over budget on this one. Know the difference between needs and wants. Learning it now will last a lifetime.
· Other Debt-The average college student has at least one credit card at their disposal. Not a good idea, especially if you're not working. Know that credit card companies target college students with savvy marketing techniques. If one is needed, find one with no annual fee, low APR and decline credit line increases when they're offered. Most importantly, pay the bill on time and in full each month!

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