How to not break the piggy bank

By Vinny Vella
Collegian Reporter
September 11, 2008

“You need to spend money to make money.” Normally that phrase is associated with business, specifically taking a financial risk in hope of reaping the proverbial benefits that it may yield. What’s the biggest financial risk in your life right now? Any idea? The answer is surprisingly simple: college.

Well, maybe “risk” is too harsh a term, but let’s face facts: College is the biggest financial expense in your life right now. Most people tend to focus only on tuition, but in reality, it’s how you spend your money on a day-to-day basis that truly affects your financial status during these four years. According to Jan Ambrose, the head of the Finance Department at La Salle, the biggest cause of poor budgeting among college students is simply negligence.

“People tend to hit the ATM multiple times during the week and don’t realize where their money is going,” Ambrose said.

One of the best ways to avoid making financial faux-pas is to plan out a budget for your spending. It’s a simple process, one that even the most math-illiterate can handle with minimal difficulty. First, categorize the things you normally spend money on each month, such as food, entertainment and clothing. If you need some help, Answers.com provides a handy “Budget Worksheet” that you can customize to fit your financial planning needs.

This area varies greatly from person to person; some may have to consider rent, car payments and gas prices. Others may be free of these financial burdens.

“It’s vital to track what you spend,” Ambrose said. “Save every receipt and log how much you’re spending in a week.”

Once you have determined what you need to buy, you must project how much money is required. If you’re not sure, use specific items, like the price of going to the movies for the entertainment category or how much a pair of jeans costs for clothing. Now that you’ve got your magic number, you need the other crucial ingredient: money.

What source you’re taking your money from is the first thing you need to determine. Options may include your ever-loving parents, scholarships, grants, student savings and on-campus work. Credit cards are a nominal idea for the financially-responsible, but many students are likely to fall victim to the power of charging and quickly spiral into debt. However, if you do decide to use a credit card, Forbes.com advises that you set a low limit on the card and to talk to your bank to make sure you understand completely how your specific plan works. Debit cards are another, more practical option and some banks, such as Wachovia, offer free checking accounts, with no monthly service fee or minimum balance requirement, as well as other perks for college students.

So you’ve got what you want to buy and the money you need to acquire these items with. What’s next? Go back to first grade: subtract. If your difference is positive, congratulations, you’re an expert budgeter. If it’s not, then you need to do some adjusting. Consider eliminating some things you don’t need or cutting back on the quantity of things you do.

Look for low-budget or even free alternatives for the things you enjoy doing. La Salle has many options to help you in your quest, including free entertainment via Late Night La Salle every Friday and Saturday night. Upcoming free events include Capture the Flag Friday, Sept. 12 at 10 p.m., with sign-ups beginning at 9:30 p.m. on the Union patio, and Build Your Own Sundae at Backstage from 10 p.m. to 11 p.m Sept. 13. Still strapped for cash? Take a page out of your grandmother’s book and start clipping coupons out of newspapers and magazines. This may seem stupid or childish, but every little bit can help. Web sites such as ShoppingThrifty.com provide dozens of ways that smart shoppers can get more bang for their buck.

There you have it: Some simple tips for reducing your collegiate money problems. The easiest way to stay out of debt is to be organized, so be sure to keep track of how you spend your money. They say money talks, but don’t let yours get too chatty.

vellav1@lasalle.edu