Money Management 101

Late-night takeout, mall shopping sprees, and iPods. These are just a few of the many things that suck cash out of the average college student's checking account. But as students near the threshold of graduation money spent on recreation will have to be veered toward serious financial priorities like car notes, housing costs, and the dreaded student loan payments. 

To lessen the shock of the rigors of the "real world," undergraduates can acquire crucial money management skills that will keep them afloat after they're handed their diplomas.

Yah Zigbuo, a college grad of the University of North Carolina at Chapel Hill (UNC) can personally attest that learning to budget during college is an asset in the real world.

"It's an easier transition when you have already established somewhat of a pattern of financial responsibility," she said.

During her time at UNC, Zigbuo was a penny pincher.

"I had various little part time jobs. I cooked a lot, I didn't have a meal plan and I didn't go out to eat out at all," Zigbuo said.

However, she was found a way to spend money on things she wanted, while living within her means.

"In the summer when I could work more, that's when I did all my shopping," she continued.

After going back to UNC to get a second degree, Zigbuo now works as a dental hygienist. She recently moved out of her one bedroom apartment into a more spacious townhouse two-bedroom townhouse.

At the University of North Carolina at Greensboro, Assistant Director of Public Relations for the Financial Aid office Yolanda McLean educates freshmen about the financial ins and outs of life after college.

"One of the best ways to practice healthy financial planning is to be knowledgeable and realistic about debt and your own personal finances and expenses," McLean said in an email interview.  Part of her work is giving students an accurate view of what their financial obligations will look like after college. 

McLean gives the freshmen she works with examples like the following of a college graduate with a $37,000 income, of what real world expenses look like.

"Students need to be aware that about 33%…of those funds go towards taxes. After taxes, net take-home income on a $37,000 salary is $24,790," she continued.

After an estimated break down of a budget including rent, a car note, utilities, food, clothing and random expenses, the fictional college graduate was left with $165 to spend each month. This breakdown doesn't include credit card debt or student loan payments.

Both McLean and Zigbuo say that its best to avoid using credit cards in college.

"Important steps that students can take early are to manage debt by avoiding credit cards, borrowing student loans conservatively, and making all major monthly payments on time each month," McLean said.

Zigbuo said that money management was "all part of growing up."

"Try to find a healthy balance between having fun and being financially sensible," she said.  

For help creating a budget in college, try these tips from LendingTree.com: 

1. Track your spending and see where you can save. Save money by cutting back on unnecessary expenses like takeout and coffee.  Try writing down your expenses for one week, to see where and how you spend your money.

2. Curb your spending on credit. If you do have a credit card your interest can end up inflating your expenses. Use your credit card only for items that you know you can afford to pay off.

3. Get a job. Getting a job can help your resume and provide funds for your wants and needs. However, stay focused on your academic goals and be sure to your paycheck wisely.

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