Today’s guest blogger is Michael Chatham, associate professor of accounting and finance in Radford University’s College of Business and Economics.
Part of a college student’s portfolio at graduation is academic: GPA, majors, minors. But that’s not all you need to succeed in the next stage of life. Your financial health can give you a boost as you begin your career, or it can hold you back.
Talks between parents and students about money should start before college. Points to cover are how to draw up a budget, keep records and use credit.
A budget is simply a list of income — scholarships, loans, money from summer jobs and cash from home — and expenses — tuition, books, groceries and entertainment. A month-to-month or week-to-week budget will show where the money comes from and where it goes.
It’s easy to think, “I am rich!” if you start the semester with $3,000 in the bank. A budget can keep you from spending your money too soon.
Write down your expenditures or record them electronically so you can see where your money is going. In the business world, use of spreadsheets is vital. Knowing how to maintain a budget is basic skill that will serve you well in any discipline.
Responsible use of credit cards can help you establish yourself financially. A high credit score will pay dividends after college in more convenient, less-expensive access to the capital you need to buy a car or house, or start a business.
But ask yourself if you have the discipline to use credit cards. Easy access to credit can lead to overspending, onerous payments and mounting interest charges later. Missing payments on your account will drag down your credit score, limiting your post-college opportunities.
Learning to budget, use credit and keep records is a sound investment in your own future. Those smart money habits will help you long after college.
Every day in August (and perhaps some in September, too), Campus Overload will feature a 300-word-or-less essay centered around one piece of #College101 advice for the Class of 2015. To participate, e-mail Jenna at email@example.com.