Back at College and Broke Already

ALBANY, NY (09/12/2009)(readMedia)-- This article was brought to you as a public service by the New York State Higher Education Services Corp. (HESC), the State's student financial aid agency that helps people pay for college. College access, financial aid, and financial literacy information can be found at www.hesc.org. Please feel free to use this in your column, editorial content, Web site or newsletter.

The hottest clothes, the coolest cell phone, and latte breaks are a few of the "must haves" on the priority list for new college students. To avoid a budgeting crisis later in the semester, the New York State Higher Education Services Corp. (HESC), advises students to plan carefully and use credit cards sparingly. HESC is the State's student financial aid agency that helps people pay for college.

Hopefully, you've saved money from a summer job. With careful planning, you should be able to budget a weekly allowance that will cover books and supplies, transportation, personal care items, and other necessary expenses, with some left over for entertainment. Or, perhaps your family is providing an allowance while you are at college. Either way, without a spending plan, you may find yourself caught short when a necessary expense comes along.

Where does it all go?

Sometimes, no matter how much you plan, you may find yourself at a zero balance before the end of the allowance week. It's the little things that add up quickly, before you know it. Here are some examples:

Bottled water -one, seven days a week can be as much as $10.50 a week.

Gourmet coffee - a small one costs $2.75; grandes as much as $4.75. Buying one every day could cost $13.75 to $23.75 a week.

ATM fees -every time you get cash from an ATM that does not belong to your bank, you may pay as much as $4.00 in fees. Two visits a week to an ATM could be costing you $8.00 a week...$32.00 a month.

Buying online -- Perhaps you planned an online purchase, but forgot about the shipping charges. Standard shipping can be costly...sometimes double if you choose express or overnight shipping. Plan ahead and avoid higher shipping costs...or find the item locally.

Impulse buying - You know what it is...you're on the way to get supplies for a class and you've spotted a pair of your favorite brand of jeans on sale ...if you buy the jeans now, you won't be able to get the necessary supplies for class, but you buy the jeans anyway. Now, you're in debt.

Take charge of your spending

The first step in budget rehab is to take a step back and review your spending by keeping a spending diary. List every cup of coffee, every bottle of water, or anything you buy and its cost, for a week or two.

For example, if you find yourself buying bottled water every day from a machine or cafeteria at $1.50 each, consider getting a reusable water bottle and bring your own. Not only will you save money, you'll save the environment, too, by using less plastic.

Are the ATM charges racking up? If your bank does not have an ATM on campus or nearby, consider opening an account with one that has. You'll save $2.00 or more with each transaction, which could amount to a nice-chunk-of-change each week.

If you remain diligent for the tracking period, you may be surprised to see where every penny went, and you may identify patterns that will help you re-evaluate and re-prioritize.

Empower yourself with a plan

You now have the information to create a sound financial plan.

Your spending plan will help you set limits and prioritize. Plus, you will determine what you really need vs. what you want. You'll learn whether you can afford to purchase that pair of designer jeans or put off the purchase for a while.

Online budget calculators at HESC.org can help you develop a spending plan, balance a check book, set up a savings plan, and more.

Ask before you spend

Develop a sensible spending plan that will be easy to stick to. Budget for entertainment so you won't feel deprived; if you begin to feel negative about a spending plan, it won't be successful, so keep it real.

Your new budget may take some tweaking, and it may take awhile to get used to a new habit of spending according to a plan, so it's a good idea to write your plan down and keep it where you can refer to it regularly. Before you spend impulsively, ask yourself...

• "Do I need a latte, or will a regular coffee hit the spot?"
• "Does this purchase fit my spending plan this week? Can I set aside some money this week so I can afford it later?"
• "If I want to purchase an item now, what will I have to give up to keep within my weekly plan?"

Your college experience is a great time for you to spread your wings and experience independence for the first time, and staying debt free will help empower you to reach your goals.

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