American college freshmen might as well look at it as a rite of initiation. They enter college completely free of personal debt; by the time they finish college four years later, they’re going out with an average of $4000 in unpaid balances on their credit cards. Almost always, they have no idea how it came to this. College degree programs, no matter that they be in medicine, philosophy, history or language, should always include a course on personal finance. If they were given this knowledge, young people would actually be able to use it to improve their lives right then, standing on the brink of financial catastrophe as they are. Seeing that college courses don’t see fit to do this though, this set of financial planning tips should help. We have many more Financial Planning Help Articles Now Available.
When parents ask their college graduate children to explain how they could rack up thousands of dollars in credit card debt, they frequently hear one answer: “Well, I did make the minimum payment each month – why did they charge me interest then?” Well, they charged interest because no matter what, after the grace period is done with, everyone wants interest on the money they are owed. This is about the first thing that college freshmen need to learn about – what those credit card terms are actually all about.
There are lots of things that young people need to learn about credit cards. For instance, young people sign up for a credit card often, just for the cool sign-up bonuses – like a free phone or something. Unfortunately, cards like these come with high interest rates and very high spending limits. Young people look at those spending limits and they are psychologically influenced into thinking that the limit they are given is somehow permission to spend that much. A college-goer needs to know that under no account is he to hold more than one credit card; and that credit card should have nothing higher than $1000 as the spending limit. One also needs a real education on what an APR is, what an annual fee is and what penalty fees are.
But let’s get to the financial planning tips right away. It isn’t enough to just tell young people that they need to be careful with that credit card. If they burn through their monthly allowance by visiting the ATM as often as they want, of course they’ll be left with no option but to raid their credit card. The only way to make that bank account money last as long as it should is to budget closely. Free software tools like Quicken make budgeting very easy. You’ll even find the Quicken among the tools offered by your bank’s Internet access service. If you don’t want to land yourself in hot water before long, you’ll have to work on your budget very closely and make sure you stick to it – no matter how drunk you are on a Friday night with a girl on each arm that you need to impress. You need to make sure that you don’t use the ATM too often because of the fees, and you need to make sure that whatever bills you need to pay each month, you have a text message alerts set up. Missing a date means big penalties.
One way to save on everything would be to take advantage of all the student discounts that are going everywhere. Airline tickets, entertainment, meals – all of these are often offered at discounted rates to students. You need to take advantage of these. And keep looking for those financial planning tips. We have many more Financial Planning Help Articles Now Available.