Beating those budget blues
Money does not grow on trees – therefore, students must get by another way: budgeting.
There are facilities on-campus to help students with their financial needs: family finance classes, the Family Life center which offers seminars and counseling on budgeting and financial decisions.
Budgeting involves setting and reaching goals, prioritizing needs, living according to means and staying out of debt.
After being married just over a year, Tyler Nicholes, a junior majoring in public relations, and his wife Becca have a new opinion of what budgeting means.
Before married life neither of them seemed to have a budget. Mom and Dad were usually willing to move money into their bank accounts, they said.
“Being married is harder because you are the one who has to put money in the account,” Becca said.
“You need to make sure you have the money to pay the bills,” Tyler said.
This can also hold true for those students who were in a sense “cut off” from the family funds once they reached college. It is now up to some students to fund their own lives.
“Everyone should make a budget for themselves and then try and stick to it … and people should get money into savings as soon as possible,” Becca said.
Alena Johnson, professor of the family finance class, said some students know how to budget because they have limited funds, but a lot of them do not know the methods or better ways to budget.
Johnson provided a simple form to help students start budgeting:
1. Find out how much their income will be.
2. Find out how much their bills will be.
3. Live off the rest
“If [students] budget well they shouldn’t have to get into debt for living expesnes such as food or clothing,” Johnson said. “Students should make sure they can pay off student loans and cars, etc. before getting into the debt [for those items].”
After making a budget, the key is to try and stick to it. However, it is not always easy.
“It’s hard to stick to a budget when you don’t have a fixed income and expenses,” Tyler said. Unexpected expenses can get in the way of a budget.
Therefore, students should plan their budget reasonably so it will be easier to stick to.
Some students are conscious of how much they are spending and other students run up large credit card bills. Students need to be careful, said Jean Lown, professor of the department of human environment.
There is good debt and bad debt, she said. Bad debt involves credit card debts.
“Credit card payments have high interest rates, … and if you don’t pay them off in full, you are basically saying, ‘I don’t care how much I am paying for this because I have an excess of money,'” Lown said.
When students do not pay their credit cards off in full, they will, in a sense, not know how much they are paying for a certain item, she said.
“No one lets you know how much you’ve paid off,” Loan said. “You don’t know if you are paying $18, $45 or $60 for the $15 meal you had last week.”
Good debt is more along the lines of having student loans, Loan said.
Student loans have low interest rates and students do not have to start paying them back until six months after they graduate.
“It is an investment in your future,” she said. “It surprises me how many students are very proud when they have graduated with no student loans. When they say that to me I ask ‘Well how long did it take you to graduate?’ ‘6 years,’ [they respond],” Lown said.
“It would have been better for them to take out a few student loans and graduate earlier so that they can get a real job with work benefits earlier. Instead, students work too many hours, rack up credit card bills and don’t get enough sleep,” Lown said.
Students need to understand the difference between good debt and bad debt, Lown said.
Too many students get married and have kids half way through college which makes earning a degree that much harder and longer to get and too many students would rather drive a fancy car and be in debt, she said.
“Students need to make wise choices and realize the implications of those choices,” Lown said.
-klm@cc.usu.edu