In today’s economy, students’ control over their finances needs to be on-point to avoid major issues after graduation.
A lot of students just focus on going to class and making grades and fail to recognize the snow-ball of debt building in their wake from student loans, car payments and credit cards.
Keeping their thumb on their financial pulse needs to be every bit the priority that grades and attendance are.
According to an article by The Washington Post, written by Ylan Q. Mui,
“College graduates are the fastest-growing group of consumers who have filed for bankruptcy protection in the past five years,” Mui said. “The percentage of debtors with a bachelor’s degree rose from 11.2 percent in 2006 to 13.6 percent in 2010.”
Not only are college-grads the fastest growing group that are filing bankruptcy, but default rates on student loans are also a major problem.
According to an article found online at www.ed.gov/news/press-releases/first-official-three-year-student-loan-default-rates-published,
“For-profit institutions had the highest average three-year default rates at 22.7 percent,” ed.gov states. “with public institutions following at 11 percent and private non-profit institutions at 7.5 percent.”
That is an average of around 375,000 students that default per year on their student loans.
One of the best ways to begin tracking your debt and finances now to prepare for a comprehensive plan after graduation is to come up with a budget so you know what your money is doing.
However you make your money, when you receive it, sit down and list out everything that you will be spending money on for the coming weeks until through the next time you get paid.
Set a monetary value for food cost, gas expenses, entertainment, utilities and rent and stick to those amounts like your life depends on it.
Once you graduate and you have a larger income, list out your debts smallest to largest, maintain minimum payments and throw everything you can at the smallest debt and work your way up until they are all paid off.
Missouri Western now also offers a program called SALT that has been established with the sole intent of helping students to manage their finances.
Another good resource for students can be found at http://www.daveramsey.com/tools/college-guide/. The guide found here does have a cost of $139.99, however, there are a ton of other resources and information that is invaluable that can be found on this site.
As students, we need to get a handle on our finances and debt now, or risk going under in the after college.