Monday, October 6, 2008


If you have more money than you know what to do with, then you can skip this day's blog (but please come back tomorrow!), but if you are like most college students, you need to read this. The art of being able to live within your means is one that many people never learn. Now here is the interesting part, if you are able to learn this now, while you are in college, you will save yourself from a lot of emotional turmoil and set yourself up to have much more fulfilling life.

Money affects how we view ourselves and others. We judge people as successful or failures at times due to the amount of money we believe they have. But the truth is sometimes hidden. We all know people who constantly show off the newest gadget, purse, clothes. You think to yourself, "She must be made of money" or "Wow, her parents really spoil her". The truth may be so different.

Due to their own insecurities or their need to impress others, they may be spending money they don't have. Someone who is spending a lot of money may also be sitting on a pile of credit card debt. Start growing credit card debt while in college and you are looking at a financial disaster by the time you are 25.

Now there is bad credit card debt and there is good credit card debt. The bad is when you can't pay your balance off each month, it keeps growing and you're paying a huge interest rate on your balance. Good credit card debt is when you CAN PAY IT OFF each month. It's good because it helps raise your credit score (which you will need when you buy a car or home in the future) and you aren't paying interest (an expense you don't need).

When you spend more than you can afford, who are you really kidding? Do you really need that $245 Coach purse? And if you can't pay off your credit card at the end of the month, how much is that Coach purse really costing you? Not having money for basic necessities or financial insecurity is stressful so it is important that you make good decisions with the money you do have. Being able to PLAN AHEAD will make your financial decisions easier and smarter.

Start by writing down how much money you have coming in for the month, then write down all your known expenses. Like this:

Net Pay from Job for October $360

Less: Gas for my car (100)

Less: My share of electric/cable (80)

Less: Groceries/eating out (150)

Less: Manicure (30)

Those are my known expenses. I have spent every penny I made for the month, therefore, I can not go buy a tanning package or get my hair cut unless I cut my spending somewhere else. For example, cut out the manicure and get my hair cut instead or don't eat out during the month and squeeze in that tanning package.

Begin to think outside the box to save money. Could you carpool and share gas? Talk to your roommates about making homemade pizza instead of calling for carryout or delivery. Purchase clothes from a consignment shop instead of an expensive department store. In future blog posts I will give you lots of ways to save on your living expenses and begin an emergency fund. Feel free to comment back to me any ways you save money that you want to pass on.

Begin to live within your means and you will thank me later.

1 comment:

Anonymous said...

Great article - this is something that is not only for students, but for everyone. Live within your means!