Higher Edvice

With New Year’s resolutions in full gear, January is the perfect time to reset financial goals and financial habits. As both a college president working with thousands of students and a member of a bank’s board of directors, I know how important financial planning can be. Whether you are a college student entering your second semester or your final semester before spring graduation, here are few quick tips that could help boost your financial standing and get you in the habit of thinking about your cash and credit position for the short- and long-term.

1. Got a Budget? There’s an App for that.

With the prevalent use of smart phones for everything today, why not make your life a little easier by putting a budgeting application at your fingertips? The best way to create a realistic budget is to first track your spending. Take a week or two to look at your receipts and see where your money is going. Where can you cutback? What can’t you live without? Create a reasonable budget for every possible expense from fast food to music to fuel to parking and then stick to it. Recognizing what you spend is the first step in getting your spending in control. 

       2.    Pay Yourself First.

When you create your budget, include a category pay yourself first by saving at least 25 percent of all earnings or gifts.  Saving at least $1 for every $4 you get is a gratuity you deserve and will appreciate in the long term. It is surprising how quickly a few dollars can add up in a bank account you don’t view or access daily. Before you know it, you will have a nice-sized emergency or rainy day fund.

       3.    Check Your Credit Report.

Your credit report becomes the report card of your adult life, and it is up to you to make sure it is accurate. Annually you are entitled to a free (no fees) copy of your credit report from each of the credit bureaus, Equifax, Experian, and TransUnion.  Don’t let your credit history or credit score be a mystery. Access your credit report online and make sure it reflects your best possible financial profile.

     4.    Click Your Coupons.

Coupons can be tricky. Group e-coupons, flash online sales, and local email deals are a very popular way to get quick discounts on food and recreational items you frequently use.  However, be smart about your selection of e-coupons and limited time offers. Make sure you aren’t spending money on food or services you wouldn’t normally buy.

     5.   Look for Alternatives Everywhere.

From rental textbooks, like we offer at Towson University, to e-textbooks, to comparison shopping by using barcode scanning apps, always look for the alternatives. With today’s technology and availability of information, you should hardly ever make a big ticket purchase without doing your homework first. Make sure you are getting exactly what you need at the best price within your budget. Also pay it forward after your purchase by taking the time to leave feedback for other savvy consumers like you.

Dr. Robert L. Caret is the 12^th president of Towson University, Maryland’s second largest public university and the author of Bob’s Blog (http://presidentcaret.org).  With enrollment topping 21,000 students, Towson has received national recognition as a ‘Best Value’ by Kiplinger’s Personal Finance magazine and The Princeton Review.  

“In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity – it is a prerequisite. And yet, we have one of the highest high school dropout rates of any industrialized nation. And half of the students who begin college never finish. This is a prescription for economic decline.”- President Barack Obama, February 2009 Address to Joint Session of Congress

With the attrition rate increasing nationwide, it is important to take a hard look at the reasons that might explain why, despite the global necessity of education that President Obama describes, would graduates not make it to the finish line.

The rising cost of education is a good place to start. It has been said that 67% of American students graduate with debt— the national average at least $24,000. As government and institutions of higher education prepare to address the situation, a primary question emerges:  How are students preparing themselves to pay off this debt if jobs are not available? Faced with the daunting expenses associated with completing a degree, could this rise of higher education tuition cause a decline in enrollment?

Financial literacy in today’s world is almost as important as learning to read and write. One could even argue that a student’s credit history is far more important to his or her future than grade point average. But the two are linked: with greater investment in educating our nation’s current and future students about financial literacy and how to manage their loans and other bills, it is possible we would begin to see an increase in both enrollment and graduation.

The United States’ lack of financial literacy, as a whole, is an important factor to consider as tuition increases continue to effect students. It is widely believed that lack of financial literacy in our society has been a major factor in the recent financial crisis. The more students know about financial literacy, the less likely they are to feel “in over their heads” both while they’re in school and after they graduate.

One place we can start is in the home. Parents often shy away from discussing personal finance with their children. The earlier students are made aware of money management, the less likely they are to be burdened by it after they leave their parents’ home.

What are your ideas to ensure students remain committed to their education?  Share them with us below: