Comments on: The Best Ways to “Spend” Your College Windfalls

By: Credit Card Chaser

Credit Card Chaser — Thu, 08 Oct 2009 01:30:20 +0000

All great ideas but I would also add that if applicable get a car or other transportation so that one can work at a part time job/internship during school. While of course a car is a depreciating asset if one is in school and doesn’t have any form of transportation at all and is thus unable to get a job off campus making any kind of substantial money then putting that money towards a car might be a pretty good idea.

By: Laura

Laura — Wed, 07 Oct 2009 22:31:43 +0000

@Rosa: That is a good point. Books can be such a hassle, especially if you buy on campus (which is sometimes unavoidable).

@En: Great job on your plan! Graduating without a car payment will give you more breathing room.

By: En

En — Wed, 07 Oct 2009 03:20:04 +0000

Thru 2 years of grad school I pretty much wasted mine. These last two semesters I have done exactly those three things u state in addition to filling my heating oil tank and ordering a half side of beef. The checks to vanguard will be mailed tomorrow for the Roth. And there is still enough left to take a three day vacation with friends. Next semester the car will be paid off bc the interest rate on the loan is about 2% less than the car and I’m paying off my private loans next year so the federal ones can fall neatly under the new repay plan.

By: Rosa

Rosa — Wed, 07 Oct 2009 00:38:56 +0000

I assume your brother and sister are doing this, but as a college staff person we tell our students to keep that money so they can buy books the next semester before all the aid comes in.

When I got a grant in college, I used the “refund” to buy groceries, since my job income was exactly equal to my monthly rent – it sounds like all three of you are doing great!

By: Laura

Laura — Tue, 06 Oct 2009 23:17:04 +0000

Good points on putting the money away for savings, not just for emergencies.

@BG: Good question. After your scholarships and grants have paid your tuition, any leftover is sent as a check to you as a tuition refund. That’s how we referred to it in college.

@craig: I mentioned spending the money on something you enjoy, because like you pointed out, life experiences can be a great education. I just know that sometimes people instead use this money for gadgets that bring no real value to their lives.

By: Anthony

Anthony — Tue, 06 Oct 2009 22:00:43 +0000

@Jim: Any monies you have left over after you’ve paid room and board, tuition and fees, books, etc. is given back to you.

So, if your loans, grants, and scholarships total more than what the cost of the semester/year is, you get something back. Yes, it is possible to get more grant and scholarship money than the cost per year. It is definitely possible to get loans in excess of the school cost…

Which takes me back up to my previous comment. Pull extra money, the government pays the interest while you’re in school. After you graduate, pay the money back, and keep the interest.

By: Anthony

Anthony — Tue, 06 Oct 2009 21:57:37 +0000

This doesn’t directly address the question, but…

If the government is willing to give you money and pay the interest while you’re in college, why not take advantage?

If you are already pulling a loan for school, go ahead and pull the maximum amount allowed per year (assuming this is a subsidized loan). Take the extra amount you’ve pulled, put it into a CD, earn interest, and pay back the principal on the loan when you’re done with school. Make a little bit of free money a la the government loans.

By: John DeFlumeri Jr

John DeFlumeri Jr — Tue, 06 Oct 2009 21:14:17 +0000

Yes, get rid of that credit card debt and don’t replace it.

By: Jim

Jim — Tue, 06 Oct 2009 16:56:13 +0000

I also haven’t heard of a “tuition refund” and am curious what that is exactly. I’m assuming its some sort of grant but not clear on why it would be in the form of a refund. Is this specific to a certain state or college?

By: BG

BG — Tue, 06 Oct 2009 16:23:02 +0000

Sorry if I’m clueless, but what is a college windfall — what is a tuition refund?

When I went to college, I had to pay them, not vice-versa — has something changed?

By: Craig

Craig — Tue, 06 Oct 2009 15:44:13 +0000

This is easier said than done and although great advice not easy to put into practice. For example after I graduated I went on a backpacking trip. Sure you could say I could have done a smarter move and put in IRA or high yield account, but the life experience and trip was priceless. If you can put money aside great, but sometimes being young you have other things in mind.

By: Dan

Dan — Tue, 06 Oct 2009 15:17:22 +0000

One should note that if he/she doesn’t have taxable income, he’s really not “supposed” to contribute to the Roth.

By: Matt Kelly

Matt Kelly — Tue, 06 Oct 2009 15:00:39 +0000

How about creating a realistic budget that reflects their priorities and includes non-monthly expenses like car repairs, insurance and spring break. This money could be used to seed an accumulation account so that they have money for irregular expenses and don’t have to rely on credit.

Credit and debt are a function of poor planning, unconscious spending, and impulse purchases.

Nice post, thanks for the opportunity to think about what I would have done differently.

By: Evan

Evan — Tue, 06 Oct 2009 14:23:54 +0000

I have no idea if this is possible, but what about pre-paying tuition for the next semester…this way you can’t spend it, and it is being used for your eventual goal.

Thoughts?

By: Bodark

Bodark — Tue, 06 Oct 2009 13:35:47 +0000

I believe it was R. Kiosaki, but from a pragmatic stance: “Rich people buy assets, Poor people buy liabilities”.

SO – who cares, buy gold, stocks, houses, guns, jewels… just buy something at a decent price (60 to 70 cents on the dollar of fair market value). And enjoy!

By: KC

KC — Tue, 06 Oct 2009 12:36:50 +0000

a couple of obvious ones (to me) are set it aside for grad/professional school and save it for a possible non-paid internship. Many fields of work have no-pay or low-pay internships. If you set the money aside to assist with your living expenses you may be able to apply for a great internship that pays nothing that others can’t apply for cause they need money.

Same with grad school. Although its easy to get assistance and work your way through grad school you still give yourself more opportunities if you have money set aside for it.