A discouraging trend is the balooning credit card debt of college undergraduates. According to a Sallie Mae study, students now hold on average more than $3000 in credit card debt, and much of it is not due to late night pizza bills, beer runs to the store, or airfare to Daytona Beach – it’s for bread-and-butter costs in school – books, supplies, and tuition.
This obvious problem demonstrates the need for substantial educational planning beginning long before the decision of where to attend school is made, in part because the most financially-saavy strategy for achieving a degree if one does not have scholarships that cover the vast majority of educational expenses involves attending a public community college and transferring to a low-tuition, public institution.
But what if you’re already in school and need to make some hard decisions about money? First, live and die by a budget. Setting one up is easy. Living by it is a little harder, but absolutely doable. Second, contact your financial aid office. With their help and guidance, dedicate several days to exhausting all of the options for getting more funds toward your college years that do not involve taking on more debt. Third, cut up the credit card, yet leave the account open. Switch to cash, checks, and if really necessary, check cards with lender logos. Fourth, look into ways to trim recurring costs from your budget – items in your discretionary and non-discretionary areas that your must pay every month. Follow this advice and you’ll be leaps and bounds ahead of the “cool” kids in school with no income, 25 credit cards, the 25 correspondingly uncool credit card T-shirts, and a mountain of debt they’re unprepared to tackle upon graduation.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
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