College students, in particular, are faced with a host of financial decisions, many of which can be costly.
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With the costs of basic necessities on the rise heading into the fall semester, Texas A&M University money expert Nick Kilmer talks about the added stress for college students and how they can take a few simple steps to save money.
“Money is one of the biggest stressors for college students, as well as the general public,” Kilmer said. “College students, in particular, are faced with a multitude of financial decisions, many of which can be costly. Do I live on or off campus? Do I buy a parking permit or take the bus? What student loan should I use to help pay for college? Am I ready to get my own credit card? Should I start investing now or create an emergency fund?
Kilmer teaches a course called “Fundamentals of Monetary Education” for the Texas A&M Financial Planning Program in the Department of Agricultural Economics.
“Learning about money allows us to make better financial decisions on a day-to-day basis, which increases our monthly savings (net income), allowing us to own more and owe less (increasing our wealth),” he said. “Having wealth is the key to financial security and freedom, and it all starts with financial education.”
Kilmer’s top five tips for college students:
Start budgeting your money: The convenience of credit cards and automatic payments just makes spending too easy, so start tracking your income and expenses and find out where your money is going. If you just don’t have time, consider using an online budgeting app that will do it for you.
Get a better bank account: Interest rates are rising, but banks can charge a variety of fees (ATM fees, overdraft fees, annual fees, etc.) that can offset those gains very quickly. As a student with a lower bank account balance, it’s more important to focus on fees than the interest rate. Do some research online to find the right account for your unique needs.
Get roommates: We all like our independence and personal space, but housing can be up to 20% of the cost of going to college. Finding one or more roommates could save you thousands of dollars a year.
Choose the right debts to pay for college: No one wants to go into debt to pay for college, but if you have to, make sure you choose the right debt or it will cost you. The average interest rate on a credit card is around 18%, while federal student loans offered through the Free Application for Federal Student Aid (FAFSA) charge interest rates of around 4%. .
Don’t buy textbooks: Consider renting your textbooks instead of buying new ones; you can save $100 on a single textbook. If you’re a military-affiliated student here at Texas A&M, visit the Aggie Shields Lending Library in the Veterans Resource and Support Center. Loans textbooks free of charge to veterans and their dependents. Aggies can also use Open Educational Resources (OER) through the Texas A&M Libraries.
A growing program
Students in any major can take Kilmer’s Monetary Education course, a core elective in behavioral and social sciences. So far, more than 1,700 Aggies have learned about money while earning academic credit toward their degrees. “I’m excited to say we’re growing and now look forward to reaching over 1,000 Aggies a year starting this fall,” Kilmer said.
The program is now partnering with Texas A&M Athletics to strategically enroll and educate its new student-athletes about money so they can make the best financial decisions during and after college.
“This partnership will help prepare all of our student-athletes for the financial challenges and opportunities that lie ahead,” Kilmer said.
Source: today.tamu.edu