Spending Habits that Will Make you Graduate Poor

This is a guest post from The Studenomist of Studenomics. If you like what you see here, please consider subscribing to his RSS feed.

As a college student going to school in a tough economy, I’ve made it a personal goal to graduate with as much money saved as possible. How do I intend to pull this off? After all, it seems like everyone these days is completing college either broke or in debt. My answer is simple… In addition to working year round, I’ve done my best to avoid the following spending habits.

1. Always buying new

When you’re in college (and even after you graduate) you shouldn’t be purchasing everything new. You should look for used textbooks, used furniture, and even used school supplies. Take a look around a college bookstore. In many cases, new textbooks now sell for over $100. That’s an awful lot of money, especially considering that most students take upwards of five courses per semester.

Likewise, when you move into your dorm or apartment, you should challenge yourself to see how much used furniture you can gather. After all, if you furnished a dorm with all new items, it would cost you a fortune. There’s no shame in having used items, especially if it helps you meet your financial goals.

2. Keeping up with technology

As a student, all you really need technology-wise is a basic cell phone and a standard laptop. I’ve never understood why college students feel compelled to buy the biggest and best plasma TV or the latest high-end laptop, but many do. Sure, I recently purchased an iPhone, but that was after years of waiting and having actually saved up the money for it. All too often, I see students rushing to purchase the latest and greatest technology with – yep, you guessed it – a credit card.

3. Entitlement spending

Many students feel that, just because they work hard at school, they “deserve” certain rewards that help them maintain a certain quality of life. One of the most common “entitlement purchases” that I see around campus is when someone purchases a new car so they can arrive at school in style. In reality, driving that new car to school may wind up costing more than your tuition. The cost of that car, interest payments, insurance, gas, maintenance, and parking fees will only put you further into debt.

4. Taking random courses

While everyone needs to fill up their schedule, there’s no point in signing up for a course if you’re not sure that it will interest you or help you progress toward your degree. Sure, you might want to explore your interests, but keep in mind that every time you take an unnecessary course (or drop a course) you’re literally throwing money away. That money could’ve been used to pay for courses that would’ve actually helped your get your degree, or perhaps you could’ve even stashed it in a high yield savings account.

Have you fallen prey to any of these spending habits?

22 Responses to “Spending Habits that Will Make you Graduate Poor”

  1. Anonymous

    “I’ve never understood why college students feel compelled to buy the biggest and best plasma TV or the latest high-end laptop, but many do.”

    Either they have a busy fastpaced school life that they didn’t think it through, or they have been spoiled by their parents.

  2. Anonymous

    It may be helpful to write down a list of
    questions before you go look at the vehicle. Be sure to look out for such sites with offers that are too good to be true, as
    these are usually scams. However, a major hurdle that stops shopping websites from making inroads is the Indian psyche to distrust anything that
    cannot be felt and seen.

  3. Anonymous

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  5. Anonymous

    Most of this is definitely good advice. (I can’t count the number of times people have given me crap because I own a first-gen iPod. They don’t seem to get the fact that I can’t afford to buy random crap when I have tuition and housing fees.) I partly disagree with number four, though. Sometimes, taking that random course can expand your knowledge or even help you consider another possible career choice. You shouldn’t take it to extremes, but one or two random classes won’t hurt.

  6. Anonymous

    Sound advice. I’ve fallen victim to many of those trends. I’m a tech-geek. I remember when I first arrived on campus, I wanted a Macbook sooo bad. Rather than splurging for this new brand of technology, I budgeted my income and set a goal to get one in the future. It worked out well for me. Aside from getting this thing that I oh-so desired, I also learned some really good budgeting tips along the way.
    Overall I think that the underlying philosophy that one should grasp is: Aligning your everyday splurges, goals, and ambition with your stated purpose. All of your actions should be moving you toward your overall goal. Once this is understood, even your mistakes (splurges) will move you in the right direction.

  7. Anonymous

    Studenomics, that’s really interesting that you had to pay per course. Where I went to school, 12 hours was considered full-time, and you could take as many classes as you wanted (well, within reason) after paying for your 12 hours.

    I frequently took 15-18 hours, same price as 12.

  8. Anonymous

    I didn’t even know colleges existed where people pay per course year-round. I am so used to the one tuition covers all classes system, I guess. I took full advantage of that and loaded up on economics and finance classes that otherwise I would not have had to take.

    Even with classes being included in the tuition, I don’t think I really knew anyone who took classes “just because a friend was in it” but that probably has more to do with who you talk to than anything.

    Good article all-around Studenomist!

  9. Anonymous

    The biggest money saver (had I chosen to take advantage of it) would have been to stop going to the bars every night. While that wasn’t a problem my entire college career, for some reason I thought going out every night was a part of the curriculum my senior year. It was fun at the time, but I paid for most of it on credit…

    Did anyone mention selling back your textbooks? I kept most of the books specific to my major (except tax books, one year and they’re outdated), but all of those extra courses a university makes you take probably wont be of much benefit to you in the future. Half.com is also good for selling back. You’ll probably get more through them than you school bookstore.

  10. Anonymous

    I want to start off by thanking Nickel for allowing me to voice my thoughts on this very popular blog. I also want to thank everyone that has taken the time to reply to the post. I have a few comments to add to the discussion:

    1. My school is different because you have to pay for every course you take. It’s amazing to hear that some students have the option of taking more courses for the same price, I’m truly envious.

    2. By random courses I was referring to all those times people take a course simply because a friend is in the class. I love taking courses that deviate from my major but I would never take a course unless I knew something about the professor and the course content.

    3. Textbooks are probably the second biggest expense next to tuition fees. As a result it means that all students should strive to save any money they can in this area. Whether you share, buy used, buy online, buy from past students, or even don’t buy because the professor has made it clear they don’t follow the textbook.

    This is all I had to say for now and once again I would like to thank everyone for checking out my blog and commenting on my post.

  11. Anonymous

    I always tried to buy used textbooks when I had the opportunity, a lot of my classes had the teachers take out important content to form a smaller packet saving costs which was good. I agree with technology but sometimes it is helpful. I had a laptop at freshman year and by senior year it was shot. I waited till I graduated and saved before buying a new one, but depending on your course and major, you may have to keep up to date with technology, especially if you are a computer major.

  12. Anonymous

    Piggy-backing on Courtney’s comment, I had a professor who always said, “Make the most of your money, and enroll for all your credits.” I tried to do that every semester, and much like Courtney, I got a major, minor, and was able to fulfill my liberal arts requirements…and then still had time to take one or two “fun and interesting, but not part of my major” type of classes.

  13. Anonymous

    #4 doesn’t really apply at a lot of schools. When I was in college my semester tuition was the same whether I took 12 credits or 21 (both of which I did). Aside from my very first semester when I was still getting my feet wet, I regularly took 18-21 credits which allowed me to get an interdepartmental major (66 credits), a minor (18), and an honors degree (18) while also fulfilling the liberal arts general education requirements that everyone at my school had.

  14. Anonymous

    I’ve got to disagree with Kelly regarding private vs. public schools. Apply to a variety of schools that fit your education and personality needs, and don’t make your final decision until you receive aid packages. If you’re a good student, it’s possible that your top choice is less expensive than a state school. Many schools will waive the application fee if you apply online or attend an open house – and you can ask your top school to match another school’s aid package.

    My tip: It’s okay to pay down your loans before graduation, esp. if they’re not subsidized. I was able to greatly reduce my monthly payments after graduation by sending money from my pt job towards loans during college – such freedom, as my friends now struggle with hefty loans.

  15. Anonymous

    Note: I graduated in 2005, but I have a feeling not that much has changed.

    1) I agree with Eric about scholarships. While I didn’t have a full scholarship like him, I still had a really decent one that left me with student loans that were significantly less than one year’s tuition.

    2) Speaking of student loans, I know one thing I did post-college was make sure that my monthly payment was set to something that I could realistically afford. By raising (not lowering) my monthly fee by just $15 a month (totally doable), I am paying my loan off about 3-4 years earlier than originally anticipated. More than likely, I’ll probably raise it by another $15 (or more) again soon, so I can get rid of the debt sooner. I can spare a night or two out with friends if it means I’m out of the debt quicker. (Aside from my mortgage, this is the only debt my husband and I have.)

    3) I used Half.com for buying my books. They were usually less than half the price that the bookstore asked for, all because they had soft-cover bindings instead of hard-cover. I could totally live with that, and I bet most college students could too. Just a website suggestion for finding good new AND used textbooks.

    4) One thing I did to help my savings was evaluate my meal plan. My freshman year, there was a minimum meal plan that all freshmen had to have. However, by sophomore year, the minimum number of meals changed from something like 21 meals a week to 5. I realized I didn’t eat many meals in the school cafe (I cooked or had a $300 credit that was on my ID card separate from my meal plan money and used it at the school’s sub shop), and I lowered my plan to the new minimum. Can I tell you how awesome it is to go to the school’s billing office and collect a check for a few thousand dollars? I used to pay off my credit card with it (usually only owed a couple hundred dollars on it at most, probably from buying books!), and the rest, you might guess, got put into savings. Spending $300 on sandwiches, salads, and other smaller meals at the sub shop vs. spending thousands per semester in the cafeteria was an amazing savings and left me with a very comfortable savings cushion until I got my first job about 3 months post-graduation. Just an added suggestion on how to save.

  16. Anonymous

    These are all great pieces of advice. Another I’d recommend: learn to cook. It’s amazing how much money you’ll save by making your own food — and the time you spend buying and cooking is time you don’t spend at movies or keggers.

  17. Anonymous

    In line with #3, many young folks and students feel the need to continue the lifestyle that their parents provided them. What those young folks fail to recognize is that that lifestyle probably wasn’t what their parents had when the parents were the student’s age.

  18. Anonymous

    Scholarships, scholarships, scholarships people. Mine paid for all of my schooling including books and tuition. I didn’t have to spend a penny for anything education related. There are a lot of unclaimed ones out there…seek and apply!

  19. Anonymous

    I sort of disagree with #4. You definitely should not take it to extremes, but sometimes a random course can change your life.

    To graduate at my school, you need approximately 120 credit hours. Some degrees (liberal arts) give you more choices than others (engineering) on which courses you can take to fulfill these requirements. At my school, and many others, there is a range of credit hours that is considered full-time tuition. When on full-time tuition, you may take the full-time minimum (12 hours in my case) often up to the department maximum (or higher with special privileges) without paying extra. Some schools realized that kids were doing a sort of arbitrage with this to sign up for classes they planned to drop (deciding for certain which to drop after they got the syllabus for each class) so they created a limit on the maximum credit hours without paying an extra fee. This was 16 at my school. Nonetheless, if you were able to take 16 credit hours each semester that gives you about 8 credit hours to play with. Therefore you could probably take 2-3 normal classes or even more low credit hour classes without incurring many extra fees. I, for one, found that enrolling in a physical education activity class to be much cheaper than doing something like that outside of school even if the college credit did not count for anything.

    Now, all of this is not including AP kids who may be more than a semester ahead. While it is true they could graduate early, many do not want to do so or may be unable to do so because of course prerequisites. These kids should explore their interests as well.

    So, in summary. while I agree with your thesis that you should not spend lots of money on wasteful classes, I have two caveats.
    1. If you can take an extra class that interests you for near-free (book cost only for example), then take it.
    2. If you hate your major that much and are in your first two years, you should consider taking some classes outside of it to make sure you making the right choice.

    Maybe I am bias because when I had extra space in my schedule I took extra Computer Science (my major) courses, but they really did nothing extra for me in the end and I wish I had spent the time broadening my horizons a bit more.

  20. Anonymous

    …frugality is always a good idea. But the big savings come from a wise ‘choice’ of which college to attend in the first place.

    With annual tuition at private colleges costing about $30K, and about half that at public colleges… cellfone/laptop choice is a trivial consideration.

    Lots of good colleges deliver quality education at discount prices compared to prestige ($$$) schools. And lots of colleges are mere diploma mills. Know what you want and shop around.

    If you’re not sure what you want from a college, it’s a smart idea to postpone hiring one until you do… even if you never go at all. 3 out of 4 Americans don’t have college degrees… and most do fine.

    Half the people attending American colleges now — never graduate. What does that tell you ??

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