Wise Financial Decisions In College
My buddy Emily over at Remodeling This Life tagged me in a financial meme going around about good financial decisions made in college. When I read it, I thought to myself “I didn’t have any finances in college to make good decisions about, I have nothing to say!” but of course, that isn’t really true. I went to my undergraduate years in college on a big scholarship that paid for about 80% of my room, board, and tuition, and I had a combination of parental contribution (5%), student loans (10%) and my own contribution from working every summer (5%) to pay for the rest. I also had a work-study position that I used to pay for textbooks and incidentals (like my phone bill) throughout the year.
Thinking back, I came up with two good financial decisions I made in college. The first was to not use credit cards. I did get a credit card my sophomore year because my parents felt I needed to start establishing credit. I’m not sure that was accurate, but get a credit card I did. But while I was in college, I didn’t use it. If I didn’t have the money for something, I didn’t buy it. My first year, I knew I wouldn’t have money for gas or parking, so I left my car at home all year. I did bring my car subsequent years, but if I didn’t have the money for gas, it didn’t get driven. If my floor ordered pizza and I didn’t have the money for it, I didn’t participate. Sometimes it kind of stunk because I masked being poor with being anti-social, because I was young and stupid and kind of ashamed of the fact that I was broke. But at least I didn’t charge up my credit card with Dominoes. I am not at all claiming I always made smart choices with my spending money, but I did live within my means in college, as far as incidental money went. Graduate school is a different story, but for undergrad at least, I was well-behaved.
The second thing I came up with is that I only got student loans for what I needed to pay my tuition. I never got a student loan refund, I never looked for more loans I could take out, I just used them for school and that was it. I would get offers in the mail for private loans I could get to pay for books and other college-related incidentals but I didn’t do it. I don’t know why I didn’t, other than this feeling that it seemed like a bad idea. But I heeded that feeling and my loans were strictly to pay for tuition and nothing else. And yet I am still paying them off now, and I graduated in 1996. Imagine if I had taken out more loans so I could have more pizza…
I went to an expensive liberal arts school, and I don’t regret one single minute of it. I honestly don’t think I would be the same person today if I hadn’t gone to college where I did. That could be a good thing or a bad thing depending on who you are. 
I don’t have any insight into if a person should choose a private college versus a public college for their education from a career standpoint, but I do know that college was about much more than education for me, and I am grateful that I had the opportunity to experience it.
So if you went to college, what were some of the good financial decisions that you made while you were there? I’m late on this meme so I have no idea who has and hasn’t been tagged. So I am taking the easy way out and opening it up to the floor. Leave a comment or write a post and talk about your good financial decisions! If you link to this post and let me know, I will add your post to the end of this one.
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May 1st, 2008 at 4:50 pm
My family had very restricted means while I was growing up, so when I went to college, the ways of screwing up didn’t really even occur to me. I was thrilled to pieces to be able to buy an occasional paperback book or a chocolate muffin. I had three years of full-ride support, and wound up with just under $6k in student loans. I lived in the dorm (hence no need for furnishings) and mainly ate from my meal plan at the cafeteria. I lived on the cash I had and only got a credit card pretty late in my school career, just to be able to buy a pair of boots from a catalog for my study abroad trip. It was immediately paid off. Later, as a Peace Corps volunteer, I had $400 a month to live on (a princely sum), and I continued the same minimal consumption pattern, and budgeted very carefully. It wasn’t that I was particularly prudent, it was just that I had the money I had, and no more.
As a young married back in the US, I really went hog wild. I was very excited about furnishing our apartments (IKEA) and getting all sorts of neat kitchen stuff, and I could spend $100 a week just on books. That was OK up until we moved to a high-cost area (rent 50% of take-home), I lost my job, and we had a baby (and then another one). We never went crazy into debt, but $500 a month over-budget adds up over time, and I developed an expensive love affair with the Lands End catalog and Gap Kids. Our budgeting method (when we used it) was ineffective for dealing with our situation, and our income was marginal for the area. Fast forward six years. I’ve discovered Dave Ramsey, we are living in a lower cost area and my husband has an excellent income, but we have a lot of big fixed upper-middle class expenses (Texas summer AC bill, daughter’s private school, gas, internet, cell phones, car payments, etc.). We could cut back a lot more, but we’ve lived on a budget since October, we’ve paid off my student loan, we’ve paid off our old credit card, and we’re on track to pay off our car by Christmas, and then start saving for our first house. Our May budget feels lavish and has lots of extras in it (an anniversary dinner, movie with the kids, savings for travel, etc.), but we’re paying a double car payment on our final debt. If I call in to Dave Ramsey, I bet he’ll wonder what took us so long on our income, but our quality of life is very good, and we’ve got a plan, and the plan is working.
May 1st, 2008 at 5:13 pm
My best decision was to get a job during school… and not spend any of the money. I also lived in a dorm room, with a mandatory meal plan, so I tried to spend $0 each week, with a $30 monthly budget for gas. Those were the good ol’ days in 2003, of course.
I actually spent about $50 each month, with gas, clothes, and “social” spending.
My roommates thought I was nuts at the time, but they’re jealous now. I COULD have graduated with $22,000 in debt, but I paid it down to $8,000 in the four years of school. It’s amazing what a few years of minimum wage, combined with no spending, will do to a loan!
Those frugal habits will probably remain with me for the rest of my life - something I am very grateful for.
May 1st, 2008 at 5:48 pm
My wise decision in college was to go to our local public university on a full ride rather than attending an expensive private college. Sometimes, I’m envious of folks who got to go to “better” schools, but given my family’s financial situation at the time, I really made the best choice. I ended up with no student loans from undergrad. Of course, I made up for that in graduate school, but, hey, at least I made a decent choice for the first four years!
May 6th, 2008 at 5:21 am
I was in the last UK intake year who didn’t have to pay tuition for university so I was very lucky. I took out the loans offered to me for living expenses, and my parents paid my rent and some expenses. I had to work through all my holidays as that was the deal with my parents. After my undergraduate years I ended up with about £5k worth of student debt plus a £1k overdraft. I worked full time through my two postgraduate years in a job that paid my fees for that course, plus I started to pay back my student loans even though I could have deferred it since I wasn’t earning enough to have to start to pay. Starting to pay them off early was a great choice as the interest rate, though small, would have racked up more and more debt. I finally finished paying the loans after a couple of years and have been saving ever since.
I guess I didn’t really have to budget too much in Uni but I was just careful not to run out of cash. I didn’t use a credit card much and I worked in all holidays.