College students learn a great deal in their scholarly endeavors, but many fail to learn the basics of budgeting. Though cracking the books and developing job specific skills will certainly help students in their future lives and careers, if budgeting skills are lacking, post-grad life is bound to be filled with a lot of financial hardships, regardless of a lucrative career or advanced degree. The payday loan path may be waiting for them.
The college years are expensive; the cost of books, social events, and rent add up, sending some students to the payday loan lender. Although college grads are statistically less likely to obtain payday loans, while pursuing a degree the risk of irresponsible payday loan usage is an ever-present reality.
Considering that many students are living alone for the first time, uninhibited by parental supervision and exposed to more expenses, the likelihood of overextending resources becomes a real danger. Because many people in this demographic have not established credit and payday loans do not require credit checks, these advances become a viable and convenient solution when financial troubles arise. However, many students are not aware of the costs of these services and may abuse them when not fully informed. Many may not even understand the terms of these loans, getting over their heads in debt and potentially harming their credit. Few things are more daunting than finishing college only to have one's credit destroyed. If a student fails to pay off a payday loan in full and on time, he/she will be reported to the credit agencies, damaging his/her credit score before he/she even has the chance to establish credit. Clearly, these loans should only be utilized by students if they can be used and repaid responsibly.
A better financial solution that will persist beyond the college years is learning to manage one's money by developing a practical budget. However, many students simply aren't prepared for the realities of living on their own and don't know where to begin when financially planning. The following budget tips will help college students start their adult lives on the right track.
This is the foundation of forming a budget. The financially savvy know that bills and necessities, like groceries, come first. Once you know how much you will need each month, you can start to see how much you have left over for what you want each month.
Did you spend two-hundred dollars last month on pizza? Are the late night coffee breaks breaking your bank? Write down all of your spending for a month and track your habits. If a specific habit is soaking up all your excess cash, you may want to consider cutting back or seeking cheaper alternatives.
Do not let a ten dollar pizza turn into a 45 dollar burden. Check your bank account regularly and keep track of all your spending to avoid overdraft fees and overspending.
Prepare for these expenses by starting a savings account. Even if you only save 5 dollars a month, the extra cash can come in handy when seasonal expenses pop up.
Staying off the payday loan path should be a focus for new graduates. On top of student loans and other debt that may be incurred during college, taking out more loans just to get by will only cause a cycle of unending debt.
