Episode 9: A Crash Course on College Finances

About the Episode

From snagging scholarships and eating healthy on a budget to juggling a job, classes and still having a social life, we cover all things college on this episode of Making it Count. Our hosts interview Richard Barbari and returning guest Valerie Moses, both from the Community Engagement department at Addition Financial. If you’re a college student – or the parent of one – you won’t want to miss this episode!

3:25

Will asks Question 1: "I want to start with a topic that looms large for college students. How do you feed yourself a reasonably healthy diet? I lived on ramen and mac and cheese when I was in school, but I’m under no illusion that my diet was healthy. What’s your advice for eating on a budget?"

Valerie responds: "I know food expenses can really add up for college students, especially if you’re eating a lot of fast food. One piece of advice I have to help cut down on those expenses, is to create a meal plan at the beginning of the week before you go grocery shopping. List out which meals you plan to eat out and which you plan to make yourself. That way you aren’t throwing out a whole head of lettuce at the end of the week because you didn’t plan appropriately."

"Another tip for grocery shopping is to get your produce in season so that it is cheaper and higher quality. That’s one way to avoid that pre-packaged ramen lifestyle and have a healthier diet without breaking the bank."

Learn more: Learn How to Budget Money in College (So You Don't Eat Ramen Every Night)

4:40

Will asks a follow-up question: "So Rich, what was your diet in college like?"

Rich responds: "Unfortunately, I was on the ramen and fast food diet. It definitely hurt my budget spending so much money eating out all the time. Obviously the pre-packaged ramen is cheaper than fast food, but it’s still as unhealthy. I know the temptation is real to just swing through a drive through or walk to the restaurants on campus, so it’s really about having a plan like Valerie said."

Learn more: The College Student Budget That Lets You Eat More Than Cereal

7:05

Cristina asks Question 2: "One of the things I remember from my college days was being inundated with credit card offers. What’s the best way for college students to avoid racking up credit card debt?"

Valerie responds: "My dad gave me some great advice when I was spending a bit too much on my credit card in college. He said to think about the purchase price of the item or meal or experience and compare that to how many hours of work it will take to pay that off."

"With the minimum wage job I had on campus, a lot of the time it was just not worth a full day’s work to purchase that item or meal. Some days it was – we all deserve to treat ourselves every now and then. But when you think about that impulse to buy in terms of the number of hours it will take to pay it off, it makes it a lot easier to avoid temptation."

Learn more: First Time Credit Cards for College Students: What to Know

6:15

Cristina asks a follow-up question: "Rich, would you give your younger self some credit card advice. What do you think you would tell them?"

Rich responds: "I got a lot of free shirts – and, subsequently, credit card debt – while I was in school. Having those credit cards made me think I had all this extra money I could spend on whatever I wanted when that didn’t really match up with how much I had in my checking account."

"That debt really taught me the importance of budgeting. It’s affected me long term, because my credit score took a hit as I was finishing up school. I’m not saying college students shouldn’t get a credit card, but sticking to a budget will help you avoid accumulating debt on that card."

Learn more: 7 Starter Student Credit Card Mistakes You Can Avoid

9:55

Will asks Question 3: "I think a lot of college students run into trouble because they can’t predict their income or expenses. What’s your advice to avoid money surprises?"

Valerie responds: "It’s important to put in a portion of your paycheck into savings every month or every pay cycle. That will help you build a cushion against any emergencies or unexpected expenses."

"Especially living in Central Florida, I know a lot of us have to drive up and down I-4. I had to replace a few tires in college because of the bad road conditions. Luckily I had that emergency savings I could use – it made a stressful situation a lot less stressful."

Rich also responds: "That’s a great point. And I would recommend doing automatic transfers from your checking account to your savings account when your paycheck comes in. That way it happens without you needing to remember or even log into your account. And then if there is an emergency or unexpected expense, you can move the appropriate amount back into your checking to use your debit card or pull out cash."

Learn more: 8 Practical Money Saving Tips for Students on a Budget

11:40

Cristina asks Question 4:"What kind of job do you think is ideal for college students?"

Rich responds: "I like to tell students to look for jobs where you will gain life skills that you can use after graduation. And also look for a job that will be flexible with your hours so that you can plan around your class schedule. Good places to start are Publix and Chick-fil-a. You will gain customer service skills and be compensated pretty fair."

Valerie also responds: "Another tip I have is to look for jobs on campus. I loved working on campus when I was in school because it was so easy to walk from my dorm to my job to class depending on my schedule. Plus, you can start to build some good connections on campus that can help you find a full-time job after graduation. Lastly, these types of jobs are more willing to work with your class schedule, which is important to balance."

Learn more: 6 Elements That Make Up a Good Job for College Students

13:40

Will asks Question 5: "Now, let’s talk about partying. For a lot of college-age people, socialization is a priority. And not just drinking, but going out with their friends, controlling their own social lives. How do you balance that with being financially responsible?"

Rich responds: "To help balance school, work, and social activities, I recommend students use a calendar app on their phones. That way you’re not going out the night before you have an early shift or a big exam. But when you do have a day or two off, you can use your freedom that way you want and have a good time without negative consequences at work or in class."

Valerie also responds: "I know those going out expenses can really add up, so going back to that advice my dad gave me – is it worth the time at work this will take to pay off? If not, you can still look for free or discounted events in your area. A lot of places offer student discounts if you can show your student ID. So make sure you always bring that card with you."

Learn more: Making Friends in College is Hard, But Here's What You Can Do

16:20

Cristina asks Question 6:"What do college students need to know about keeping their finances safe?"

Valerie responds: "One tip that’s so important is to not use personal information to purchase things online when you’re on public WiFi – like at Starbucks or in the library. It’s so easy for hackers to access that information, especially if the site you are on is not secure (HTTP versus HTTPS)."

"Also, I know it’s easy to be trusting in college, whether it’s with our roommates or friends we met in class. But I would caution against this – definitely don’t give your PIN out to anyone. I had a friend whose roommate stole their social security card. You just never know what people are capable of, so it’s best to keep that kind of information safe."

Learn more: 8 Safety Tips Every College Student Should Know this Semester

18:05

Will asks Question 7: "If a student does need to take out loans to pay for school, is there anything they can do to reduce their debt before they graduate?"

Rich responds: "Of course. The first thing I’d suggest is choosing loans that will allow you to start paying interest while you’re in school. Not every lender does it but it’s a good way to reduce your debt. Also, if you can stick to federal loans, they tend to have lower interest rates than private loans."

Valerie also responds: "And we can’t forget about scholarships! Pro tip: if you see a scholarship deadline has been extended, that typically means not many people applied. So it’s the perfect opportunity for you to take the time to apply. A lot of students don’t want to put in the effort to write the short essay, but that little time it takes can go a long way toward helping you reduce the amount of student loans you take out."

Will adds: "One thing I learned in college about scholarships is to never pay money upfront as part of the application process. Legit, educational scholarships will never require you to pay a fee to apply."

Cristina adds: "That’s a good point! And there are so many scholarships out there. I hear all the time that there’s so many scholarships that go unused. One tip I wanted to share is to look for niche scholarships – like those based on your heritage or interests. Not many people apply to those because they are so specific, so it can increase your chances of getting it."

"And just remember that one $500 scholarship here, a $1,000 there, another $250 one… all of those add up. Even if the individual scholarship doesn’t sound like a lot, any amount will help you reduce the amount of loans you take out."

Learn more: 7 Methods for Finding Scholarships for College Students

21:15

Cristina asks Quick Question 1: "What’s the biggest mistake you think people make before going to college?"

Rich answers: "I think it’s what Valerie touched on earlier – students just not taking the time to apply to as many scholarships as possible."

21:40

Will asks Quick Question 2: "Is it better to live on campus or off?"

Valerie answers: "It depends on your situation. Crunch the numbers to weigh the cheaper rent off campus with the transportation costs you’ll have getting to and from campus. Parking, gas, car payments, insurance… all of those things add up and it might be cheaper to live on campus without a car if you have a job on campus."

Learn more: College Student Apartments Ideas for Every Budget & Lifestyle

22:15

Cristina asks Quick Question 3: "Assuming you’ve taken care of big expenses by applying for scholarships and going to a less-expensive school, what’s the best way to reduce spending?

Rich answers: "Get comfortable with buying used items. Used books are way less expensive than new ones and you can find inexpensive, like-new clothes in vintage shops."

22:50

Will asks Quick Question 4: "When’s the best time to start looking for post-graduation employment?"

Valerie answers: "Honestly, it’s never too early to start looking at what opportunities are available. And while you are in school, you should be building your network because that is most likely where you will find those opportunities."

"So apply for the internships that excite you, join a club, volunteer, get to know the people that sit next to you in class, but build that network and build your work portfolio as much as you can through those extracurriculars and through your internships and that's going to prepare you for that full-time employment after graduation."

Learn more: How to Find the Perfect Paid Internship for College Students

23:25

Cristina asks Quick Question 5: "Last question. What’s the one piece of advice you’d give to yourself in college if you could go back in time?"

Rich answer: "I wish I had started budgeting earlier and held off applying for credit cards until I learned those financial basics. Once I learned the value of a good credit score, I realized the mistakes I had made of racking up credit card debt while in college because I wasn’t prepared to actually pay them in full each month."

24:10

Cristina says: "We’ve already talked a lot about student loans, but they have been in the news recently. Anybody who’s applying to college or in college should be aware of what the student debt landscape is and how it affects them – or could affect them. The story we read was in the Student Loan Planner."

Will says: "According to the latest statistics, about ⅔ of all graduating college students have at least some debt. The average debt in Florida is just over $37,000. How does that stack up against other states?"

Valerie responds: "Believe or not it's actually the third-highest in the country behind Maryland and Georgia. And that's just federal loans, that's not even private loans or loans that they've gotten from their families."

25:10

Cristina asks a follow-up question: "Rich, I know you went to private school in New York. Did you have to take out student loans?"

Rich responds: "Yes, I did have to take out student loans. While I learned a lot in college and definitely got value from those loans, I wish I had more seriously considered a community college or state school to help reduce those expenses."

27:30

We know that it can be hard to think of everything when you’re getting ready to graduate from college. That’s why the experts at Addition Financial put together a College Graduation Preparation Checklist to help you. It’s got everything from general graduation prep to finances to job hunting and beyond.