With the fall semester well under way, most college students have finalized their classes and secured a part-time job. They’ve also had a chance to “test drive” their personal budgets. Nina Heck, Director of Counseling and Client Management at local 501(c)(3) nonprofit agency Consumer Credit Counseling Service of MD & DE (CCCS), says, “This is the perfect time for students and their parents to sit down and assess their financial game plan. Are the amounts they estimated for income and expenses realistic considering how things have played out? If so, that’s great. If not, it’s time to make adjustments, so that neither students nor their parents end up saddled with unwanted debt.”
According to Heck, students and their parents often have a hard time judging how much college will cost. This is particularly true during freshman year, when students first live on their own and are new to the campus experience. Economic factors also play a critical role: “With college costs so high, many students need part-time jobs just to get by. But in this economy not all of them will find the work they need. When this happens, it’s best to recognize the challenge and immediately look for ways to reduce costs. Students may decide to cut back on nonacademic activities or going out with friends to stay on track. Parents also need to fine-tune their household budgets. By making changes in the amount they spend on items like monthly phone, cable, and entertainment costs, they may be able to offer students the extra help they need without falling into further debt.”
Budget adjustments may be needed even when students do score part-time employment. Heck explains, “Those who get on-campus jobs may have decided to keep a car at school, requiring an additional expense. Campus parking is generally scarce, so you often pay for the privilege via parking permits or fees. Students who live in dorms may also spend more on gas than expected if their friends cajole them into serving as the off-campus taxi service. If your budget is tight and you live and work on campus, consider if having a car at school makes sense. Ultimately, you may find it’s less expensive, not to mention more convenient and healthy, to walk or bike to class and work.”
Students who commute to school or work off campus also face rising transportation costs: Gas prices have gone up almost 50 cents per gallon in the past year. According to Heck, “In some cases, families may not budget for transportation, but suddenly are faced with this expense when students can only obtain work off campus. Before your family recruits a second car from home or invests in a new one, check out public transportation. Using the bus, the subway, or a bicycle to get to work may cost a lot less, especially when you factor in auto maintenance, repair, and insurance. Before making transportation decisions, look at how these added expenses affect your budget bottom line.”
Food is another cost that may affect how well a student or parent’s budget is working. Families frequently prepurchase on-campus meal packages for students who are living in dorms. Heck advises, “If this is your situation, check to see how well this investment is paying off.” Many times parents buy a full meal plan at first in the hopes their children won’t go hungry. But students often prefer fast food or items from the vending machine to the campus meal program. “This can lead to cost overruns and financial hardship for well meaning parents and their children, because each time a student doesn’t stick to the meal plan his or her family pays double for food.” Faced with this situation, everyone needs to work together to find a way to manage the budget discrepancy. This begins with students recognizing the consequences of their actions. Families should also consider adjusting the type of meal plan they choose before the next semester rolls around.
Students who live off campus can fall into the same food budget trap if they spend a lot eating out or treating friends to weekend meals and drinks. Heck emphasizes the value of young adults learning to comparison shop and cook. “Student life is always hectic. Plan ahead and have a quick, cost-effective, nutritious backup available when time is limited. You save money and calories every time you grab a banana or instant oatmeal from the grocery store instead of gorging on burgers and fries from the school cafeteria or local fast food outlet.”
Finally, Heck cautions both students and parents to use credit cards wisely. “Students who are new to campus may be tempted to just say, ‘charge it’ for items they don’t really need. This is particularly true if they fall prey to peer pressure and spend without thinking just to fit in.” Parents and students need to regularly review monthly credit card statements and discuss responsible use. If limits haven’t already been set on how much and what types of credit purchases students can make, it’s time to do so. Parents also need to monitor and manage their own credit card spending. Heck acknowledges, “We regularly talk with parents who have maxed out credit card accounts in an effort to give college-age students everything they need. Before this happens, look for ways to increase income or reduce household expenses. Ultimately this will leave you all in better shape at graduation when the realities of student loan repayment set in.”
CCCS of MD & DE provides free, confidential budget and credit counseling for young adults and parents. All the agency’s counselors are certified. Sessions are provided at local offices and by phone. Please call 1-800-642-2227 to make an appointment. CCCS’s website at www.cccs-inc.org also offers information on the agency’s services or access to its free, learn-at-your-own-pace online courses for “Affording College” or “Managing Student Loans.” In closing Heck emphasizes, “Financial awareness and solvency lead to increased success, quality of life, and peace of mind no matter what stage of life you’re in.”
Consumer Credit Counseling Service of MD & DE, Inc. (CCCS) is an accredited nonprofit agency that has served the local community since 1966. CCCS is dedicated to helping individuals and families resolve their financial problems. We promote the wise use of credit through education and confidential budget, money management counseling, and housing counseling. MD State License #14-01 / DE State License #07-01.