As a personal finance journalist and a senior correspondent for TheStreet.com, Farnoosh Torabi said that even the smartest college students can fall into debt.
Until now, she said, there has been a void in educational resources for those who want to take control of their spending habits. ‘ ‘ ‘
‘I see many of my friends – super bright, impressively independent, former valedictorians, career leaders, determined, ambitious – in thousands and thousands of dollars of credit-card debt,’ Torabi wrote in her new book, You’re So Money: Live Rich, Even When You’re Not. ‘It’s true – money may not buy happiness, but having no money isn’t exactly paradise, either.’
‘ In You’re So Money, Torabi offers students tips and strategies on how to stretch a dollar on an inconsistent income.
Torabi said many college students either have part-time jobs or might work a job one semester and live off their savings the next. Most students paying rent can count on paying a set amount each month, but may encounter problems planning expenses that vary in price from month to month.
English junior M. Joelle LaSut-Schweighauser said a major spending variable comes from the ever-changing cost of travel.
‘I’m a commuter, so I pay gas no matter what (the price) is,’ LaSut-Schweighauser said. ‘I just try not to look when it’s high.’
Torabi said keeping track of where money goes is important, and she offers an environmental alternative for students who get lost in paperwork.’ She said she does all of her banking online on the Bank of America website (bankofamerica.com/morris).
‘Students are too busy to be writing and depositing checks. Plus, a paperless society helps the environment,’ Torabi said in Financial Tip #13 from her College Tips section of the Bank of America website.
Post-baccalaureate biology student Jeff Schellinger said he’s already taking advantage of online money management.
‘With 24-hour availability, it’s much more convenient to check balances online. Direct deposit is also a big help,’ Schellinger said.
Choosing direct deposit is also a smart move according to Bank of America’s Student Banking Wise Upperclassman Survey, which reported 40 percent of college students would save more of their money if it was automatically taken out of their paycheck and put into a savings account.
Torabi said students should think twice when reaching for their credit card as the most important card in a student’s wallet is his or her student I.D. card.
Political science and economics junior Daniel Cato said although he usually finds student discounts at theatres and shows, he has become frustrated with the decrease in businesses offering student discounts.
However, responsible spending doesn’t mean that students need to go without modern conveniences, Torabi said.
‘I never like to call anything people spend money on frivolous because that’s your prerogative. I don’t like when we start to criticize people for what they buy,’ she said.
‘I think it’s understandable because we’re living in the information age, we need the newest and latest gadgets. We like to spend time with our friends, and we like to go out and socialize and go on trips.’
As for using technology to keep in touch, LaSut-Schweighauser said being on the cutting edge is overrated.
‘I try to not buy brand new technology until it’s hundreds cheaper the next year,’ she said.
You’re So Money contains many fun and educational resources to help students understand the myriad of financial issues that come with being in college, Torabi said. She said parents shouldn’t be overlooked as a useful pool of financial knowledge and experience.
According to a Bank of America study, students said they have pretty open dialogue with their parents when it comes to money. The study shows that both students and their parents expect financial independence after college graduation, but not until the student finds a full-time job.
Theatre senior Jenn Wigle said that she has been planning for the future since she was about 12 years old in Canada and now has an American account that she opened three years ago after moving to Houston.
‘I have a large investment in a bank in Canada that is gaining interest and I do not plan to ever spend the money unless I use the interest,’ Wigle said. ‘I figure it will help me qualify for loans to buy a house or make other large purchases, and that way I will always still have that large sum of money in case I need it.’
Wigle may trust her banks, but according to the Bank of America study, when times get tough, ‘the most trusted financial resource for students is their parents (77 percent).’
Schellinger agrees with the findings.
‘My parents mastered the ‘bailout’ strategy long before Congress,’ Schellinger said.
