The College Budget: Tips to a Healthy Wallet

High school seniors (I, too, came down with the self-diagnosed ‘senioritis’) and you college freshmen who think you’ve got a grip on the whole college experience after several months of your new found freedom, keep reading.  This is the Young Economics guide to making sure you don’t break the bank (or mommy and daddy’s) buying booze for the lovely sorority ladies down the hall from your dorm room.

I go to The George Washington University, a city school, so its no secret that the temptations for me to spend money everyday on shopping at the local Nike store, eating at delicious restaurants, and traveling by cab  are all too real.  When I first arrived on campus, I gave in to these temptations.  I had a new found freedom, a fat wallet due to my summer job, and an irresistible impulse to walk just a few short blocks to one of America’s most luxurious shopping centers, Georgetown.  I controlled myself, a little bit, but if I knew what I know now, my urges would have definitely been tamed.  Trust me, I know how you college students in New York City feel, although I’m sure your wallet might be hurting a bit more than mine considering how expensive the costs of living are in the Concrete Jungle.  Like me, I bet you could’ve used some tips to help combat the lust of the city.

1. At the beginning of the year, suffer through it, ACCOUNT for all of your SPENDING BIG and SMALL.  After a couple of months, you’ll be able to know exactly how much you spend per month.  Also, depending on this and your level of discretionary income, you’ll be able to craft a budget and refine it as necessary.

2. If you feel as though you want/need more money, GET A JOB!  Other than making that one and only call home to mom and dad, this is honestly the fastest and most reliable way to acquire the cream.  I feel like people dread the process of actually finding a job, but in actuality colleges are creating much easier ways to help you find one.  Check your college’s career website, they most likely have a job postings tab.  If you received a Federal Work Study grant, all the less stressful and time consuming.  If both of these options are a no-go, ask around.  I’m sure the local coffee shops, restaurants or retail stores are hiring…they usually do at the beginning of the school year.

3. SIDE HUSTLING is a thing!  Find a way to make your childhood hobby into a money-maker.  I’ve seen people take their love of graphic design to designing posters for certain events and organizations around campus, I’ve heard of students offering to take other students’ trash out after late Friday and Saturday nights (you’ll know what I’m talking about), and I personally cut hair.  This was easily one of the best decisions I’ve made my first year here.  I charge $5 a cut (I’m not a professional, why charge like one?), I’m 50+ haircuts into the venture and it funded my Christmas purchases.

4. GET A CREDIT CARD.  This tip may seem unrealistic for folks, but its really not and it can help your prosperity ten-fold in the future.  Plenty of credit card companies offer special deals to new prospective students (if you received financial aid, you’re probably receiving mail from these companies now) and since you don’t have a credit score, it is quite easy to apply for one.  You may pay the bill each month or your lovely parents may take care of it, but discretion is a must.  You do not want to get carried away with your spending right off the bat.  Having a credit card and paying the bills ON TIME establishes a good credit score, so when you graduate and its time to buy a car or maybe even a house, your bank will be able to see you have a long standing history of paying off your debt in a timely fashion.

5. SAVE.  Maybe you don’t go out to eat tonight or maybe you choose to go shopping when your parents come to visit in the spring, decisions like these could be the difference between having $500 in your bank account or $1000.  Which would you rather have?

I understand, college is a time where you have all the freedom in the world and no responsibilities, but if you become disciplined with your finances now, you’ll be rewarded in the long-run.

Maxwell

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Quick Digestibles: Rival and Excludable Goods

Welcome back to another installment of Young Economics.  Today, I break down the differences between rivalrous and excludable goods with perhaps the savior of online education, Khan Academy.

Rivalry occurs in an economy when one person’s consumption of one unit of a good or service means no one else is able to consume it. Contrastingly, nonrival suggests that one person’s consumption of a good does not interfere with another’s consumption.

Excludability is defined as the inability to a consume a good so long as it is not paid for.  Therefore, a nonexcludable good constitutes as something that is consumed whether the good is paid for, as it is impossible to be prevented.

There are many scenarios in which a good may be any combination of both rival and excludable, rival and non excludable, non rival and non excludable, etc.  For example, private goods, such as my Oreos, which I refuse to share with anyone, are both rival and excludable.  My consumption of America’s favorite cookie directly inhibits my roommate or brother from coming along and trying to consume my delectable cookies.  Moreover, there is no legal way for me to eat Oreos unless I pay for them…I wonder how much money I spend a year on this Kryptonite.  Other private goods include, clothing (attention sneakerheads), haircuts, and even the laundry at college.

Then there are public goods, or non rival and non excludable goods, enter Khan Academy.  In a lot of cases, public goods are supplied by the government, like national defense and public schooling, but in this situation a public good, such as education, is being supplied by the super teacher, Salman Khan.  Khan Academy is a non-profit educational website that was created to provide “a free, world-class education for anyone, anywhere.”  My use of Khan Academy on their website or on YouTube, while I’m cramming for finals has no baring on the eighth grader in Texas trying to learn pre-Algebra.  You see, Khan Academy is so innovative and revolutionary because it has completely altered the perception of public education.  We all know that the public educational system in the United States needs reform, but with this website everyone of all ages can receive a free, world-class education without even leaving their home.  I guess that’s why Google and the Gates Foundation have each donated over $1 million dollars to the organization.  Avail yourself to the website , don’t you have some studying to do?

Maxwell