College and graduate school can be detrimental to your finances. It is easy for students to forget about finances in college. Back when I was in school people who took student loans well past six figure sums would say they will pay it back when they start their careers. They believe their college degree’s and income will offset the student loans they were accruing. Now many of these individuals wish they had planned accordingly with borrowing student loans. They are easily paying 1-2 thousand dollars a month for student loan repayment. In some cases this will barely touch the principal of the loan and result in delay of life experiences. From my personal experience and studies on student loans, it is critical to learn how managing finances in college will benefit your future.
Managing Finances in College
During my undergrad years I had several scholarships that helped cover tuition costs. My parents also helped for living costs during this time. I do plan to repay them back in the next several years for their help. Once I hit graduate school tuition costs more than doubled and my parents could not help me anymore. Thus, at this point I was forced to take on student loan debt. I worked throughout undergrad and pharmacy school to help reduce student loan debt. However, I still ended up with $85,000 in loans when I graduated pharmacy school.
About $20,000 of the student loan debt was never spent and sat in my bank account for emergency situations. Total borrowed for student loans would have been $65,000 if I had paid back the $20,000 immediately. This student loan debt has delayed my life in a sense of security, purchasing a home, getting married, having kids, and retirement. If I could go back in time and redo things I would tell myself:
- Spend modestly and only on necessities. Avoid expensive fancy restaurants. You can still find quality food for a fair cost.
- Live at home with parents if possible. Spending money on rent is a waste of money unless you value your independence more than cost of rent. Suck it up and live at home!
- Live where you can use public transportation to get around. Owning a car is a huge expense.
- If you need to rent, find roommates or a place that is reasonable. You do not need to live in a brand new upscale condo or apartment.
- Avoid buying books for school. Most of the time you do not need these to complete coursework or exams. Most of the time the exams are based off of class notes and handouts. If you really need the book, go to the library to read or copy the material. Another cost effective idea would be to borrow the book from a classmate or study with them. Always sell your book after the class is complete. You will most likely never open the book again.
- Avoid loaning money to friends or family. If you loan it to a family member, do not expect it to come back or this will create problems. Think of it as a gift.
- Find a part time job. This will hopefully cover your basic living costs such as food, clothes, cellphone, and utility bills.
- Find hobbies that will generate extra income. (YouTube, Blogging, Photography, Videography, ect…)
- Create a spreadsheet of all your expenses and income for each month. This will help you organize your finances and see exactly where you can save or cut back on.
- Only take enough student loans to pay for your tuition and living costs. Do not take on extra just because you can (interest accrued on these loans I took out for the entire 4 years in Pharmacy School).
- Start a individual retirement account (IRA) or put extra money into investments as early as possible. The earlier you start investing the better you will be prepared for retirement. It allows more years for your investment to grow and compound.
I hope the recommendations above will help guide, motivate, and inspire you to achieve your goals. Follow my blog for more tips and advice on how to become a pharmacist. What are your experiences? Please comment below and share your thoughts.