Leaving Home Leads to a Reality Check

By Lara Turner

When kids get to college it is an entirely new world with abundant freedoms but, one consequence that comes with these freedoms is that most kids loose track of how much they are spending. College students yield an average spending power of approximately $182 billion a year and their credit card debt is around $2,000 a year. That is a huge amount of money that could be saved to do a lot of other more important things. College kids just have to realize that all the little purchases add up in the end and that just because swiping a credit card is fine for the moment, at the end of the month a huge bill has to be paid. Here are some helpful hints that college students, especially freshman, may find helpful. One, cut back on eating out, two be smart when buying textbooks and only buy them if you really need them, three apply for scholarships after you get to college, four do not over decorate your room, five you do not have too buy too nice of a computer, six try not to over eat on your meal plan, seven buying a whole new wardrobe before the start of the year is not necessary, and eight carpool home on breaks so you do not have to pay money for gas. These are just some ideas on how to save money, but as long as kids keep track of how much they are spending they should be fine. 

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One Reason College Students Are Going Into Debt

Posted By Lara Turner

How much college debt is too much?

Posted by Nicholas Hall

Student loans are usually classified as "good" debt. Like a mortgage or a business loan, borrowing for education can be a smart investment in your future.

Too many of today's students and their parents, though, are taking a good thing way too far. I get e-mails from readers who are $30,000, $40,000 or more in debt from student loans and who can't find work in their fields. Even if you graduate with the average level of education debt -- about $21,000, according to The Project on Student Debt -- you may be jeopardizing your finances. Many newly minted graduates find their loan payments are so big that they can't save for other goals, such as a house or retirement.

Four years of loans can last a lifetime. Putting off these goals to pay debt is an expensive choice. A 22-year-old's $3,000 Roth IRA contribution, for example, could grow to more than $95,000 by the time she's eligible for full Social Security benefits. Put off that contribution by 10 years, and her contribution will grow less than half as big, to about $44,000. Both examples assume 8% average annual returns.

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