College was the opportunity to live on my own, and do what I wanted to do, with one responsibility: do well in my classes and stay out of trouble. I turned my 4 years into 4 ½, joined a fraternity, and spent an unimaginable amount of money at the bars for someone that had zero income.
Personal finance as a term wasn’t brought up or even talked about amongst friends while I attended college 2 years ago. In fact, I only remember it vaguely discussed by professors. Many people in college have the responsibility to create their own income, to remain in college. Study full time, work part time, social life-no time. That time spent earning their way, whether it was for school or to have money to go out with friends, it was a meaningless burden to me. People like this understood personal finance better than I did after 4 ½ years majoring in Accounting and Finance.
I’m not going to tell you to start saving money while you are in college. I would never do that and nor should you. That doesn’t imply to spend above your own means either. What I am implying – the people that were managing their money, couldn’t go out certain nights, and attended those on campus psychology tests for $20 a survey – were already learning real life discipline with their finances.
I’m going to give you 5 ways in which you will learn real life money managing discipline through simple college decisions:
1.) Whether or not you get some sort of allowance from your parents, an income through part-time jobs while at school, or government funding for a semester – understand what amount that is per month.
2.) I don’t care who pays the electric bill, rent, phone bill, internet, cable; just check and see how much YOU cost.
3.) FOOD-meal points from the parents HELL YEA! Let’s ignore that, how much on groceries per month.
4.) Here’s a fun one. After each weekend for one month, check your credit/debit card and see how much you spent at Kilroy’s, The Dizzy Saloon, Brothers or whichever bars and restaurants you frequent. (If you’re anything like me – “if I don’t look I can convince myself I only spent what I remember”)
5.) TAKE #1 and subtract #2-4 from it. A.) You’re the responsible money managing guru that you don’t know you are and are in the positive. B.) You’re hard in the red, but hey that’s fine….now. C.) WHO CARES I’M IN COLLEGE!
The problem doesn’t happen until you graduate from college and you get that 5 figure salary that you were working (or partying) so hard toward. Even a $35,000 starting salary is likely to net any new college grad the biggest paycheck they’ve received yet. I hope that you had the privilege (burden) of managing your money in college, because if not you won’t save jack. Remember all that money will be going toward things you likely never paid for before. Best advice after college, knock off 10%-15% before taxes into your 401k. You’ll never even realize you were missing it from your paycheck.