Frugality helps students find debt-free path to graduation
The average student-loan debt for a USU graduate is $15,200, but thanks to a good job and some frugality, Steve McKee has $15,200 less to worry about.
McKee, who is working on his master’s degree in engineering, said he’s only been in debt once — when he bought his car — but paid it off within six months.
“I budgeted a certain amount of money each month,” McKee said. “They had a minimum payment, but I paid a lot more than that, so that I can pay it off a lot faster.”
McKee worked almost every semester throughout his undergraduate years. He said that he would have taken a loan had he not had a job. He said his summer jobs also helped him a lot financially.
McKee’s parents are his biggest influence in keeping his finances in check, he added.
“I think it’s important (to budget) so that you know where your money goes, and you can look for areas that need to be cut back on if you start having problems with financial aid,” McKee said. “If you pay for things and you don’t have any debt, you don’t ever have to worry about interests on the debts you have.”
McKee started planning his finances right after he graduated from high school, he said. He budgeted and spent his money on food and rent and saved the rest so that he could pay off other necessary expenses.
McKee said debt is not necessarily a bad thing if people pay it off, however, when people get in too much debt and don’t try to pay it off, it can be a problem down the road.
Jean Lown, a professor in the family, consumer and human development department who teaches advanced family finance, said she encourages her students to start saving through Utah Educational Savings Plan (UESP) as soon as they have children.
She said typically USU students graduate with low amounts of loan debt, and, from a national perspective, Utah students receive relatively small loan amounts.
“One of the problems is that a lot of them take way too long to graduate,” she said. “They’ll be better off taking some student loans and working less so that they can study more.”
Lown said students should visit the Family Life Center: Housing and Financial Counseling, which is located at the bottom of Old Main Hill, to talk to a counselor and attend its workshops.
“Nuts and Bolts of Nickels and Dimes” is a basic financial management workshop that is offered by the center. Students can also visit mint.com, a secured online tool for personal finance. The site, which has more than 6 million users, allows users to set budgets, create plans for reaching financial goals, get free financial advice and observe all accounts in one place at any time of the day.
Lown also teaches a monthly workshop called “Financial Planning for Women.”
“It’s geared toward women to encourage them to take more responsibility for their financial future,” she said. “The problem, particularly with married couples, is women tend to defer to their husbands and let their husbands take care of the big things, like retirement planning, investing and life insurance. I can’t tell you how many times a widow or recent divorcee has said ‘I don’t know anything, my husband took care of all these.'”
Lacey Haggan, a senior majoring in speech communications who is also a mother of one child, said she has taken out some loans and will be paying them off after graduation.
“I plan to develop a budget where I’ll take a percentage out of my paycheck every pay period to pay off the loans,” she said.
Haggan adjusts her lifestyle to her income by calculating the cost of daycare, vehicular expenses and rent each month. The best advice she said she has for fellow mothers in college is to know the amount of money they have to work with.
“Education has been the biggest influence on my ability to balance my finances and has given me the assurance to know that I will have financial stability in the future,” she said.
– nadiah.johari@aggiemail.usu.edu