TUN sits down with Melisa Boutin, a certified financial education instructor, to discuss personal finance tips for college students.
TUN: Melissa, thanks so much for joining us.
BOUTIN: Thanks for having me, Jackson.
When it comes to money, college students have a lot to think about. Let’s start with everyday spending. Do you have any tips to help students create weekly or monthly budgets?
Students should definitely have a budget. That’s the first big step. Everyday spending is usually an area where people get tripped up and is something that people lose track of. So, my advice would be to start with a monthly budget.
You know what your expenses are in terms of what you’re going to need to buy food for the month. If you have a cell phone bill, try to include everything that you’re going to spend for a month. Once you have come up with the different categories and the amounts, you can break it down on a weekly basis.
So, for example, if your cell phone bill is due on the 15th of the month, you know that for the first week, you won’t need to spend money on that budget item. However, by the second week of the month, you know you will need to spend money on that.
So, starting with the monthly cost and then breaking it down by week is a good way to start with budgeting for everyday expenses.
I would also like to add that a key part of making sure that the budget works is to keep track of what you’re spending versus what you plan to spend. So, we spoke about having your spending laid out on a weekly basis. Once that week has passed, go back to check and check, “Did I spend the amount that I planned to?”
If you didn’t, make adjustments for the following week so that by the end of the month, you’ll be in line with the total monthly budget.
It always helps to have some sort of income. Do you have any tips on how students can earn a little bit of spending money while not sacrificing their studies? Are there any part-time jobs that you would suggest?
Having an income is definitely essential for college students, especially to help them avoid credit card debt and avoid having to use student loans for those day-to-day expenses.
Being in college, the main goal is to get your degree. So, you want to avoid looking for a job that will take away from your studies. It’s good to start on campus. Although, now that we’re in a pandemic, a lot of students aren’t on campus. However, there may still be opportunities that students can find through their college job boards.
Every university usually has an alumni arm or an annual fund arm, which is a department that focuses on raising money from alumni. Usually, that is a telephone job where you make calls to former students on the phone, asking them to commit donations to the school. So, that’s one area that is very flexible, and it will definitely fit into your class schedule.
Another job that might be good for college students is becoming a brand ambassador for your college campus. There are different brands that would allow you to make a flexible schedule and promote their brand on campus or to your campus network.
Zip Recruiter has different job postings for full-time jobs and internships but also brand ambassador opportunities. That’s a place that college students can look for those types of jobs that would fit into their class schedules.
Note: Check TUN’s job board for internships.
Before students graduate, it’s important for them and their families to develop a plan to pay off their student loans. Do you have any tips on how students should go about creating these plans?
The first tip is to stay on top of what loans you have. As a family, parents and college students can keep track of the loans that the student has borrowed.
You want to know if they are federal loans or private loans, who the lenders are, how much you’ve borrowed and, by every semester, what the total amount you have outstanding is. Just staying on top of what loans you actually have is the first step to creating a plan.
Secondly, college students should make sure that they sign up for online accounts with their lenders.
For federal student loans, that would be studentaid.gov. Studentaid.gov is actually the hub that gives you all the information about what grants and federal loans you were awarded as well as what the status of your loan is, what the balance is and what the interest rate is. You want to make sure that you have an online account set up, so you can make it easy to keep track of your federal student loans.
When it comes to your private lenders, you would have to actually go to each private lender. So, if your private lender is Sallie Mae, you would have to sign up on salliemae.com for an online account so that you can keep track of your loans and also make sure that the lenders have the most up-to-date address and contact information for you when they are sending statements or any notices.
Additionally, students should keep their parents involved, not only for making a plan to repay but also for understanding what repayment plans are out there.
Before you graduate, you want to understand which student loans have income-based repayment options. As a new graduate, if you’re looking for a job and it’s taking you a while to find employment or if the starting salary that you have would make it difficult for you to make a standard repayment, you and your parents want to educate yourselves about what repayment plans there are for each of your student loans.
With that information, you can come up with a strategy for whether you want to prioritize paying off your private loans once you graduate versus your federal loans. If you have federal student loans, make sure that you enroll in income-based repayment plans that are available for federal student loans.
If students have the option, should they start paying off their loans while they’re still in college, or would it be a good idea to put any extra money into a savings account until they have to start paying off their student loans?
I would say, it depends. Once a student is transitioning out of college, they may have limited funds. So, it may be a smart move to put those funds into a savings account first and pay them in a lump sum after you’ve graduated and earned full-time employment.
If that is not a concern, meaning you don’t have the concern of having tight funds once you graduate and you have the support of your parents or family who would assist you in paying off student loans, it wouldn’t be a good idea.
If you have private loans and federal loans, prioritize paying your private student loans first because those student loans don’t have any forgiveness options or income-based options.
So, if you do have the funds available and it won’t impact you negatively to put them towards your student loans while you’re in college, you should go ahead and do that. But, make sure that you pay the private student loans first.
Great. Well, thanks, Melisa, for joining us today.
This interview has been edited for clarity. Watch the full video here.
News & Content Manager
Jackson Schroeder is a graduate of Ohio University with a B.A. in Journalism from the E.W. Scripps School. He is originally from Savannah, Georgia. Jackson has covered a wide range of topics, including sustainability, technology, sports, culture, travel, and music. He plays bass and guitar, and enjoys playing and listening to live music in his free time.