So, back when I first posted my personal finance story (i.e. my getting out of debt story) I got bombarded with emails, questions, comments, and messages. I was BLOWN away and seriously humbled with the response. I’ve slowly, but surely gone through and answered many, if not all of them, but many of them I have saved for blog posts because I think they’re issues or questions MANY of you have (or if not you, maybe someone you know).
Thus, the READER QUESTION portion of this money series was born. And this is the first installment.
Look, I’m BY NO MEANS an expert on this stuff, but I’ve at least learned enough by now through making a TON of mistakes, that I can hopefully offer some sound advice. I’m a regular person who got out of debt and in financial control on her own. No handouts. No hand holding. Just wits. And some will power. So, here goes.
This first question comes from “C”:
I will be starting my sophomore year of college this fall, and I need a bit help with budgeting, finances, and all that sort. Though, my parents have spent hours talking to me about it, it’s also great to hear from someone else.
Needless to say, I am a shopaholic and in college that can be bad with all other expenses added. I would like to save money, but let’s be realistic there will be little savings. However, I don’t want to spend loads of amounts and rack up debt due to my horrible spending. But I also, figured it’s college and it’s the only time to do all these things…I don’t know how to balance the whole “what is OKAY for money to be spent on” and “what is not.”
What are some good tips to keep my spending limited and any bits of advice you wished people would’ve told you in college? Anything would be great!
Oh man, C, I know this is a tough one. You are like me and MANY of my friends in college. And I will say, that you are not alone – and I know it. Women AND men alike tend to get into financial trouble in college because, truth is, many college students live in the “want” category rather than the “need” category.
For many college women, it’s clothing, purses, and accessories. For men, it’s technology or video games. Regardless, more often than not, their money is spent on wants and not needs.
I know it’s a tough balance. I’ll be real with you!
Speaking woman to woman (who also happens to LOVE fashion) it can be SO hard not to sign up for that credit card in the student union and then hop on over to the mall and max it out at JCrew or Anthropologie. Cause a credit card is like FREE MONEY! Get it now! Pay it later! Right?
Wrong. So very wrong.
It’s hard ESPECIALLY when you see other college girls walking around campus with the latest and greatest bags, shoes, and clothes. It’s called TEMPTATION, and so often, we girls give in.
We cave. We buy it because we want it.
And then we end up $36,000 in debt. Well, that was me. But it’s true. And I know I’m not alone.
And the sad truth is, that kind of spending behavior is just not sustainable. For anyone.
Well, unless you’re actually rich. Then maybe it is. But I’m not talking to the family of Mark Zuckerberg right now.
Let me address a couple of your points specifically:
1. “But I also, figured it’s college and it’s the only time to do all these things…I don’t know how to balance the whole “what is OKAY for money to be spent on” and “what is not.”“
The truth is, it’s all about your budget. It’s okay to spend money on things you CAN AFFORD. At the end of the day, that’s the answer. If you look at your monthly income, then your monthly EXPENSES (see budget post for examples), and then you see that you have another $100 or $200 to spend on WANTS, then go for it.
What you DO NOT want to do is spend money you don’t have. And that’s the hardest part.
And sure, it is college and it’s the time to do fun things, but I promise you, it is NOT the time to rack up debt. I spent the better part of four years post-college paying for the financial mistakes I made IN college. I look at the amount I spent paying off my debt and if I had not gotten INTO debt in the first place, I could have been really enjoying the last four years and actually saving money.
It is my belief that the best is yet to come in my life, and I want to have money to spend on the things I want down the road. I also want the freedom to bless others financially and be a generous giver, while also getting that JCrew sweater I’ve been eyeing.
I want the rest of my life to be the time to do the fun things.
It’s all about balance.
So, set a budget. STICK TO IT NOW. Because trust me, it will pay dividends for you later.
2. “Needless to say, I am a shopaholic and in college that can be bad with all other expenses added.”
You’re right, C. Being a shopaholic is no bueno. I won’t sugar coat it for you. Shopping can be an addiction and a costly addiction at that. Just like other addictions, being a shopaholic can have a negative impact not ONLY on you, but on others as well. On your parents (if they have to help with your debt), on relationships (my money issues hurt a few of my friendships which I had to later rebuild), and on a boyfriend or future spouse.
It’s not a BAD thing to like shopping, clothes, or “stuff” – but when it gets you in financial trouble or it starts hurting your relationships, that’s when change needs to happen. And quick.
I love clothes. I love fashion. I love what they can do for self-esteem and my mood and for how I carry myself. BUT, I will NEVER, ever, ever, ever, ever, let my love for those things negatively impact my life, my finances, or my relationships.
My advice for you now? Get your spending in control, limit yourself on when and how or why you shop, and TRUST ME, it WILL pay off later. I promise.
How do you do this, you ask?
I love the phrase that Dave Ramsey uses: “You have to live like no one else, so you can live like no one else.”
Sure, your friends now might be going out and racking up debt as they buy the latest and greatest things, but they will be paying for it later. Literally. And trust me, it will NOT end well for them. I can guarantee it.
So, you might be the odd one out. You know, saving your money, budgeting your money, and limiting what you can spend at the mall. BUT, in 3, 5, 8, 10 years when you’re out of college and in the workplace and making money – you’ll be the one going shopping and spending within your means because you WON’T be paying off debt. Meanwhile, your friends will be the ones eating rice and beans, beans and rice paying off their mistakes they made in college.
Thus, you will be then living like no one else.
SO, live like no one else now, so you can live like no one else later.
I know it’s hard. Trust me. Find an accountability partner. Tell someone you know and trust about your plan. Get them to check in with you on your spending or help you with your budget. And allow yourself to not feel guilty when you do allot money in your budget for shopping.
BUT REMEMBER, clothing, accessory, and “shopping” money is NOT a necessity. It’s only money that can be budgeted after all your other expenses are taken care of.
I hope this helps.
Okay readers: what questions do YOU have? Do you identify with C? Do you know anyone else who does?
Thanks for reading!