Saturday, September 26, 2009

Finding Your Way Around College Finance

by Quang Nguyen

Many students go through their college years thinking they will repay their debts after graduation. They think that there is nothing they can do right now. However, budgeting is the most important thing college students should do right away when they get into college. The first step you should do is keeping your receipts from shopping at either the bookstore or the local market. After keeping them for a month, you can put the information down on a spreadsheet and see your expenses for yourself. From your expense information, you can create a short term and long term goal for yourself in term of financing. Short term goals would be paying rent, meals, and books. Medium term goals would be paying for the vacation you will take during spring break, or how to be financial confident when you study abroad in Europe next year. Finally, long term goal would be paying off your college loans and maybe investing in the stock market or a mutual funds that will give you a good starting budget for your expenses after college.

When you get a job after college, there are some quick steps that you should do in order to ease your college loans payment. First off, you should set up a direct deposit so that your wage go straight into your account. This way, you don't have a receive your money late. A couple of days does matter since you might be getting a new higher interest on your college loans. Then you should enroll in a benefits from work right away. Some say that benefits might worth more than wage since you have to pay income taxes with your wage but not benefits. You also might want to open a saving account that generate interests. In addition, as soon as you start working, you should think about your retirement plan right away because the sooner you start, the more money you will get at the end.

The Wall Street Journal reports that college students borrows more than ever. The U.S. Department of Education claims that student loan disbursement grew as much as 25 percent from last year to as high as $75.1 billion. It is reported that two-thirds of college students have debts in average $23,186 each. This is a huge amount of money that they have to pay back. Furthermore, students who go to grad schools incur a debt as much as hundreds thousands of dollar. In this economy it is a good question if they will be able to pay back their debts and still keeping up with other expenses one must have like rent and food. This is why students need to look at their financial situation more seriously and start budgeting as early as possible.

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