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Financial Planning for College

    financial planning for college

    Going to college can be an exciting new experience that seems to be a rite of passage if you wish to achieve success in life. However, like the saying goes, “The brighter the picture, the darker the negative.”

    There are countless adults mired in student loan debt and struggling to make payments. Their credit score is in the bad range and life with a college degree is nowhere as rosy as they expected it to be.

    Before even thinking of going to college, there are a few very important points to consider…

    • Why are you going to college?

    There is a wide variety of college degrees to choose from, but the harsh truth is that many are absolutely useless in the real world. Degrees in art history, anthropology, computer science, etc. have very low demand in the marketplace.

    Here’s the problem – whether you choose a major that will get you a well-paying job or a major that no company really wants – your college costs are going to be astronomical.

    Trends have shown that college costs only get higher with time. If you’re taking out a student loan to pay for college, you’ll want to get a job that pays you enough so that you can pay off your debt in the quickest possible time.

    So it’s imperative that you pick a major that will yield rewards when you get out into the job market.

    • What costs will you have to bear?

    Generally, you’ll need to pay for meals, fees, tuition, books, supplies and housing (if you’re staying on campus).

    One of the best ways to reduce your costs will be to attend a local college and stay home instead of living on campus or paying rent to stay somewhere close to college.

    Never buy new textbooks. Always look for used ones that are far cheaper.

    There may also be added costs such as computer access, bus service, health insurance, lab supplies and so on. As you can see, college is definitely an expensive undertaking – which reiterates the earlier point of you making your degree work for you later on.

    • Avoid going into deep debt

    If you’re fortunate and your parents have saved up enough to pay for your college, you’ll not need to take a student loan. Though when you’re working, you’ll want to pay them back the money because they’ll need to save for their retirement too.

    Treat your parent’s savings like an interest-free student loan. Paying them back will not only help them but also instil financial responsibility in you.

    Another way to avoid sinking deep into student debt will be to take on a part-time job while in college. Time is your best ally here.

    Many students make a huge mistake of being full-time students and don’t make an income. So when they come out of college, there’s a mountain of student loan debt awaiting them.

    However, if you work part-time for 3 years and save consistently, you’ll have a sizeable amount to make a dent in your student loan debt (if you take a loan).

    The far-sighted college student understands that debt is a heavy burden to bear. College parties, entertainment, designer goods, etc. may seem fun in the moment, but when the ‘college honeymoon’ period is over and you come out – that’s when the bills will start piling up. Waiting for politicians to enact rules to wipe out student loan debt is an exercise in futility. You’re all you’ve got. So make sure you choose a college major that gets you a well-paying job… and do whatever you can while in college to help pay off your loan later, as quickly as possible.