Coming out of high school there isn’t much to worry about. Most students have been gracefully given a free public education with opportunities to earn dual credit through a nearby community college, opportunities to earn AP credit, and probably making some degree of a salary be it an allowance or part-time job. The majority of students coming out of high school have a clear plate, before entering into college.
Unless students have been taught fiscal responsibility and money management, they won’t know what hit them when they realize what they are paying for and how much it is costing them and not their parents. College education is primarily a solo gig for students, which means loans, jobs and knowing how to manage personal finances. So what exactly is it that forces students to grow up financially? It’s those times when they realize they’re on their own. And it’s just the beginning. And this process of growing up is crucial for one’s personal and financial well being.
1. Usually the first step to opening one’s eyes to the high costs of a college education is seeing an unrealistic and high EFC which creates an all too low estimate of financial aid. Seeing these numbers alongside the cost of tuition for a prospective university is stifling. And it’s frightening, too.
2. Getting a work-study or part time job while going to school. The pressure to succeed in academics while having a job can be stressful, but once students learn to manage time effectively, having a job during college is a great idea.
3. Seeing the money come out of their bank account. This is one of the first reality checks for students who are paying for their own education. And it makes students not only work harder for that money, but work harder in their classes because money can’t be blown for a mediocre class performance. Not only does seeing this money disappear force students to value education more, but it teaches students to value the money they earn along with the hard work behind it.
4. Second semester comes around and students have to take out more money than was anticipated. Another loan means more money to pay off once graduation rolls around.
5. Next is when students start seeking advice from online forums and blogs as to what they can do to prevent going into more debt. Students at this point realize that they need to become more aware of their personal financial situation, so they seek out wisdom from the great world known as The Web. And it delivers through many avenues.
6. Fiscally buying groceries is another eye opener for college students. And another great way that college students learn how to save money! Coupons, cheaper grocers and generic brands are all red flags that students look for when buying groceries once they realize they are tight for finances.
7. Setting a budget with fixed expenses (i.e. tuition & fees, monthly housing, monthly insurance payments, books) and setting a budget with flexible payments (i.e. food and home supplies, clothing, transportation, entertainment).
8. Being constrained to do something because of finances. This could be any activity from going out on a Friday night to studying abroad in Paris for the summer. When a budget is in place there isn’t much leeway for even the smallest activities. And when studying abroad seems hopeful, students visit student financial services and realize more loans would have to be taken out. And who wants more of those?
9. Realizing that winning scholarships isn’t as easy as the winners make it seem.
10. Doing the math to figure out how much each class costs on a daily basis, and being motivated by that large number to never miss a class again.