Back to college: Keeping debt to a minimum

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BY MELISSA LEE / Lincoln Journal Star

Welcome back to Lincoln, college students.Use a bike or UNL’s free shuttle bus from City Campus to East Campus, for example. Fill up that car tank as few times as possible.

We probably don’t need to point out that the prices of food, gas and tuition are rising fast, leaving your already-thin wallet even thinner.

Some university leaders say they're concerned students need more help managing their money, and today’s uncertain economy coupled with high prices for the basics only make money matters more critical.

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(photos.com)

(photos.com)

Here are some tips to start your year the right way and ensure your money stays where it belongs — in the bank.

We can’t say this enough: Make a budget. Add up your expected earnings from jobs, scholarships and elsewhere, then figure out how much you can afford to spend each month. And stick to it. Period.

For more help making a budget, watch for a planned student financial advising center this year at the University of Nebraska-Lincoln, an effort led by student-body president Emily Zimmer.

When your scholarship or loan check arrives, we beg you, don’t take it straight to the mall. Instead, deposit it into a savings account, advises Kathy Prochaska-Cue, a UNL Extension family economist and financial counselor. Then transfer money from your savings account to your checking account only when you need it, Prochaska-Cue says. This will help stretch the funds as long as possible. And, as the money collects interest, it may even help you save a few dollars.

Find cheap transportation.

Having one credit card is OK so you can build credit. But pay off each bill on time. And don’t load up on the credit cards, no matter how tempting the on-campus marketers may seem.

“It’s so easy to pull the plastic out and pay for something,” says Prochaska-Cue, who has seen students get into serious credit-card debt, including one who had maxed out eight cards.

Remember her words: “That credit card can run your life.”

She suggests a trick she calls the “credit-card wrap”: Wrap a piece of paper around your card. On that paper, keep a running total of everything you spend. That way, every time you use the card, you’ll have to unwrap it and be reminded of what you owe. And maybe you’ll realize you don’t need that new shirt after all.

Watch your snacking. Not only do the vending machines make you pack on pounds, they’ll eat your money faster than you realize. Instead, invest in healthy food and splurge on treats only occasionally.

“I’m human too. I love my chai tea,” Prochaska-Cue says. “But you don’t need one every day.”

A huge part of budgeting is balancing needs vs. wants. You need to pay for tuition, books, food and other necessities. But do you need to buy the latest fashion trends?

Don’t forget that nationally, the average student finishes college $27,000 in debt.

We thought you’d answer no. Last year’s sweaters will do just fine.

Reach Melissa Lee at 473-2682 or mlee@journalstar.com.