by Katerina Nikolas

Created on: September 08, 2010

The number one reason which students cite for dropping out of college long before obtaining a degree is lack of money. Students have access to financial aid, grants and federally subsidized student loans as well as unsubsidized federal loans and private loans. These are amounts which are authorized by the financial aid officers of the attending college and should cover the costs of tuition and living expenses. The funds are available but unless the student knows how to manage their money it will never be enough.

Many students are simply inexperienced with dealing with their own finances and college may well be the first time they experience financial independence and have to make their own decisions. Many simply run out of the allotted funds too soon by failing to implement any kind of budget and by not looking forward beyond the first term.

It is vital that when funds are received they are divided into the necessary months they need to cover, and that the student lives only on that months budget and does not borrow from the next months. Putting the amount not needed that month into a high interest saving account is a common sense practice. Students who use the money from the next month’s budget to live for today will inevitably lose all control of their finances.

Working your way through college may feel like a chore but it is proven that many students who do work have a responsible attitude and their grades do not suffer. It is a good idea to apply early for a campus job and thus spare the expense of traveling to work. The vacations offer an excellent opportunity for the student to work and put the money aside to help out in the college terms. Managed well can it even be used towards pre paying student loan debt to reduce the principal upon graduation. Selling plasma is an excellent way to increase funds and help others at the same time.

Obviously the student will want to engage in a social life but should not spend above their set limits on this. Remember that other students may have moneyed backgrounds and can better afford such indulgences, or maybe they will become a drop out statistic due to money problems. Students should live within their own means even if it means missing out on some of the social events which will eat into the budget too quickly.

Student days are the best time to learn to live within ones means and exercise some frugality which is often necessary in real life after college, especially in the initial years of paying off student debt. Don’t add to your student debt by running up credit card debt or unnecessary car loans as it almost always ends in regret.

Economise on the simple things by cooking yourself rather than relying on canteens or junk food. Use a bicycle or your feet to get around campus, and car share when visiting home to cut the expense. The fridge will not be automatically filled with food as it was at home so learn how to shop wisely and economically. Photocopy expensive text books rather than buying them, or buy second hand and sell them on again when you don’t need them anymore.

No one wants the stress of worrying about money whilst studying, or to find they have run out and need to drop out of college. Learning to budget and live within ones means are the most important factor as students learn to manage their own money.

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