Tips for College Students to avoid Credit Card Debt
September 3, 2007, 2:48 pm
How college students can avoid breaking the bank with entertainment spending.
A lot of students pile up a lot of debt just to have a good time. The vast majority of the time we meet students who have high credit card debt, their statements reflect a habit of putting meals, drinks and event tickets on their charge card.
So naturally, we advise students to curb their spending habits by cutting down on their entertainment expenses. That doesn't mean that you should never go out for a good time. Sitting around the house watching TV every night will drive anyone insane. However, when you go out, you should do so wisely, and keep your budget restrictions in mind.
Follow these simple rules and you'll be able to have a good time on a fairly regular basis, without killing yourself financially:
Don't use your credit cards. One of the primary strategies we suggest at Springboard is to never use credit cards to purchase consumable products. In other words, if you have to use a credit card, make sure you have something other than debt to show for it. When you charge a consumable – such as a restaurant or bar tab, event tickets, gasoline, or dry cleaning – you have nothing to show for it while you're paying it off. At least if you limit your credit card use to products you get to keep, you don't get quite so discouraged when making the payments, and you're much less likely to let those payments lapse.
Never compromise your basic financial needs for entertainment. In other words, if you have to choose between going out with friends and making a loan payment by its due date, stay home. Having a good time is a need, but it's much less important than your basic financial needs, such as rent, electricity, telephone service, and meeting loan payments.
Avoid alcoholic beverages. There are plenty of reasons to enjoy a soft drink instead of alcohol. It's healthier, you don't end up with a hangover, and you can drive home safely. Additionally, alcohol is really expensive, especially mixed drinks. Most establishments will let you refill a soda as many times as you like. Volunteering to be the designated driver won't just make you popular with your partying friends, it'll help you stay on budget (and if you are serving as designated driver, make the drinkers in the car pitch in to fill your gas tank!).
Don't be afraid to use coupons. Many establishments distribute coupons or offer specials just to get you to try them out. Take advantage of these specials. Invest in one of the many coupon books schools sell as a fundraiser. You can easily save 50 percent on dining out.
Limit your movie-watching to matinees. At many theaters, the cost of a matinee ticket is half the cost of the evening ticket, if not less. Afternoon showtimes are also less crowded, except for kids movies, and parking is easier to find. Also, spend as little as possible at the concession stand. Often, the cost of a tub of popcorn, a candy bar, and a soda is as much as the ticket itself.
Invite friends over for a barbecue. One of the biggest reasons people like to go out, especially to restaurants, is so they can spend time with their friends. Well, you can have just as good a time at your house, and if you ask everyone to bring a side dish, the cost is minimal. Also, you don't spend a dime on tips, or transportation.
Complete our household budget worksheet. The worksheet will help us recommend a solution to reduce your credit debt.
