In college, everybody is looking to save money. The Post looked into top tips for building your credit score, saving your money and budgeting.
Between $5 Wednesday liquor pitchers at Lucky’s, $2.50 for a slice of Good Fellas pizza, $2.50 Hot Nuts at Tony’s, $6.29 for a Big Mamma’s burrito and the never-ending list of other options, going out Uptown can weigh heavily on one’s wallet.
For Michelle Mwaura, a sophomore studying journalism, going out every week isn’t a problem because she said she does not currently have any demanding financial responsibilities like rent or groceries. However, she said she is hoping to prepare herself for next year when she lives off campus and must budget to pay for those necessities.
Personal savings are at near-record lows in America, according to a 2014 article in Bloomberg Business. Building room into a student budget to put away some money for the future can be really helpful, said Natalie Chieffe, an associate professor emerita of finance and a certified financial planner.
“Instead of thinking about buying now, look at your savings account as a foundation for things you can have later,” she said. “It might only be $10 now … but it builds up and it’s going to be, you can imagine for yourself what it is: a special outfit, a vacation, your first home.”
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Chieffe, who coordinated the financial planning certificate, said setting aside money in a savings account can be one of the hardest, but most important aspects, of efficient personal finance planning.
If you receive an income, Heidi Sochia, marketing and education specialist at Ohio University Credit Union, recommends that you have a portion of the paycheck automatically dispensed into a savings account so that you never have to “miss” that money.
Students can also take steps during college to build a good credit score, which will help with aspects of post-graduation life such as applying to rent an apartment. Both Sochia and Chieffe said to start small with one credit card, using it for purchases that can, without question, be paid off by the cardholder.
“Making payments on time is the most important thing that your credit score is calculated by,” Sochia said.
In a 2013 survey of 750 college graduates conducted by Fidelity Investments, the students graduated with an average of $3,000 in credit card debt.
Paying off the credit card bill on time each month results in positive credit reports, which can lead to boosts in a credit score, which Sochia called a “snapshot” of someone’s credit report at a particular time.
Additionally, paying the bill on time means the individual does not have to pay interest on the unpaid amount, which is something Chieffe said is unwise and unnecessary to do. The unpaid amount of a bill accrues interest, and as it sits, the debt grows as one pays interest on top of the original sum plus its accrued interest.
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“Unfortunately, it just gets bigger,” Chieffe said. “Everything you bought that month now costs more. … Most things should be paid off in the amount of time you’ll be using them. … Always pay the full amount even if it means you can’t do some other things.”
Though it might be boring to budget now, Sochia said it is easier to get started with personal financing earlier before one has a mortgage, children and a career.
For example, Whitney Phillips, a senior studying psychology, said with her two on-campus jobs, she knows how much income she has per week and paces herself accordingly.
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“I try to keep conscious of what’s in my account,” she said. “I have a credit card but it’s only for medicines, gas, CVS trips. … I know I can pay those things off. … I only use cash when I go out, and I limit myself to just that amount each night.”
Although those tips might seem “obvious,” Chieffe advises students to pay close attention to their personal finances and savings.
“Carrying it out in practice is not so easy sometimes,” she said.
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