Tahlequah Daily Press

August 29, 2013

Budgeting key for college students

By SEAN ROWLEY
Staff Writer

TAHLEQUAH — srowley@tahlequahdailypress.com

Students attending college expect to learn life skills to use during their careers, but regardless of their aspirations, they’ll all need to learn how to manage their money.

Failure to budget can result in deep debt, ruined credit ratings and bankruptcies. College students can find themselves in a bit of a limbo between living with the parents and being independent with careesr.

“I am an athlete, so I cannot have a job while I’m going to school,” said Red Walker, a Northeastern State University student from Sand Springs.

“I’m always dealing with a lack of funds. I also don’t know all the details I need to know concerning my student loans. I need to go visit financial aid.”

For a college student, the temptations to overspend are myriad - meals, parties, tech gadgets, a nice car. But buying anything begins with a budget, and a budget begins with determining income and expenditure.

Expenses should be categorized between those that are firm, like rent; those that can vary, like utilities; and those over which the student can exert some direct control, such as food or clothing purchases.

“My problem is, I like to go out to eat a lot,” said Kendall Stavely, an NSU sophomore from Sallisaw. “On a college budget, you can’t do that. When I do go out, I eat of the kids’ menu. It works. It saves money.”

Finally, a student should put some money away to guard against a fourth category of expense: the unexpected. Socking away even $40 a month can keep a flat tire from blowing out a budget.

When budgeting, students may be tempted to establish a line of credit. Many have mixed feelings about doing so.

“I don’t have any credit cards, and I think that is a good idea,” said Elizabeth Cotrill, an NSU sophomore from Jay. “I also make sure there is a certain amount of money in my checking account. When I hit it, I cut off.”

Maddie Mayhan of Sand Springs, an NSU sophomore, said she has credit cards.

“You have to keep an eye on them,” she said. “They can be a pitfall.”

Some companies that furnish credit cards target college students, and there are horror stories about people graduating with tens of thousands of dollars in credit card debt. But establishing a credit history while in college can be desirable, and a checking account and credit card are excellent methods of doing so.

Budgeting is also the secret to a well-maintained checking account. Students should apply for credit cards with low, fixed-interest rates and low spending limits. It is difficult to abuse a ceiling of $500, $700 or $1,000.

The card should be used with the intent of paying the full balance on the next billing statement. If one cannot pay the full balance, always pay more than the minimum.

Sending minimum amounts can result in years of repayment on even small debts.

Students seeking advice on budgeting and finance can visit oklahomamoneymatters.org. Oklahoma Money Matters is a personal finance education program for students.