BY DAVID KOCH, CFP®, CFA, AIF®
1. Understand the cost of college.
A full-time student is in class roughly 360 hours per year. Take the annual cost of college and divide by 360: That’s how much it costs to sit in an hour-long class. UCLA’s estimated all-in costs, for example, are about $34,000 per year, which comes out to about $94 per hour—or more than $1,120 per week. Minimum wage is $7.25 in this country ($10 in California). At that rate it would take more than 13 hours of work to pay for one hour of class.
2. Audit classes.
Many college students start college either without preselecting a major, or are already unsure of the major they’ve selected. A student who audits a course can do so for academic exploration or self-enrichment. This underutilized option allows students to gain exposure to different subjects and fields of study without running the risk of lowering their GPA from an unreasonable workload.
3. Get a credit card, and use it wisely.
Some people don’t think college students should start using credit cards, but I disagree. There are several key advantages: They’ll start establishing credit early and, more importantly, they’ll learn to budget.
How to make sure you stay within your means: Don’t spend more than you have—and pay the balance off each month. Check your balances often to make sure you’re on course. Use a digital calendar, like Google’s or Outlook, to schedule reminders for your payment due dates.
4. Protect your identity.
Don’t share personal information. This obviously includes passwords and social security numbers. And don’t leave sensitive information lying around. Make sure you are using a unique password for every website login. An easy way to create these is to add a 2-letter suffix to your normal password. Your target.com password, for example, becomes Fluffy1999ta (“ta” for Target).
5. Be thrifty.
If there’s one time in your life where it is totally acceptable to be a cheapskate, it is in college. This can be incorporated into many aspects of life: shopping at thrift stores and on Craigslist, using student discounts, buying used textbooks, clipping coupons, and using the sharing economy.
6. Invest in yourself.
Participate in on-campus job fairs. Try to find work doing something you enjoy—once there are bills to pay, this becomes much more difficult. Join networking groups like Toastmasters, Kiwanis, Rotary, and the local Chamber of Commerce, or find a Meetup group. Meet as many people as you can in your future field of interest. Don’t wait until you graduate to make connections: Start now.