Macaroni Money with Call Federal

Dude, this is going to be epic: Some advice for your college student.

As of this writing, most college students are back on campus for their second semester.  I had a colleague at work say that she was sad to see her child return to school after being home for break, but I assume that not every parent views their “empty nest” in the same way (tears of sorrow vs. tears of joy?).  I remember my undergraduate years with a fondness that only comes after realizing how good I had it, and that it will never be repeated.  Why was I in a rush to graduate and enter the real world to “make money”?  As a college student I had no major responsibilities, I was surrounded by likeminded and interesting friends, and there was a wholesome social activity every night of the week!    

I recently realized how out of touch I had become with this new generation of young people so I will save you from my attempts at lingo humor.  I gave a financial lecture at a local high school last year and the students looked at me like an alien when I used phrases like “no such thing as a free lunch” and “keeping up with the Joneses.”  I need to update my financial analogies.

That being said, I still want to offer some friendly advice for your current college students and/or prospective students who may be freshmen next year.

1. Evaluate your major choice based upon your post-graduation employment and earnings prospects.  Yes, underwater basket weaving sounds like fun, but the employment opportunities are very limited and you will have to make those student loan payments soon.  Your goal is to generate a return on your (parents?) educational investment.  You have just taken yourself out of the labor force for 4-5 years so you have an earnings deficit to close relative to your non-college peers.  I discuss college costs, and the cost-benefit decision process in a previous article here.

2. Know yourself and avoid people and situations that will detract from your success.  Yes, leasing a house off campus with five of your fraternity brothers sounds like a ton of fun, but it probably won’t help your GPA.  I made this “mistake” as a junior in college, but it taught me some valuable lessons.  I learned a lot about myself and how adversity and hardship can bring out the best in us.  My noisy house situation forced me to go to the gym and library every day, and resulted in me being in the best shape of my life (so far!) and getting Dean’s list every semester during my junior and senior year.

3. Be money smart while in college and develop good habits.  Poor financial decisions and bad money habits can impact your credit score and handicap your financial start even before you graduate.  Bad credit can impact your job prospects as well because many employers pull your credit prior to a job offer (especially the financial industry).  I had friends who would write (bad?) $3 checks for house parties, and another friend that named his credit card, Mr. Mastercard.  It was like a game of chance when ordering food or when shopping at the bookstore: “Come on Mr. Mastercard, don’t let me down now!”  Credit card companies have been chased off campus nowadays, but signing up for a credit card in order to get a free t-shirt was a real danger in the late 90’s and early 2000’s.  

4. Get a job while on campus.  My freshman year, I worked in the main campus dining hall washing dishes and cleaning tables.  I later found a great work-study position at night in the residence halls as an assistant to the night watch administrator.  I was able to read and do homework from 9 p.m. – 2 a.m. two to three times a week with minimal distraction.  This dedicated study time was invaluable. Working while in school promotes discipline and forces you to manage your time better.

5. Get a job and/or internship while at home on break.  I have been working since the age of 14 so I did not want to give up that income when I went to college.  I also had my share of tuition payments to make!  I kept my job at Aunt Sarah’s Pancake House during winter and summer break, and also interned with Time Warner/Time Life for a few summers.  The internships helped me to gain valuable experience with regard to working in a corporate office setting (norms, culture, inter-personal skills, etc.).  Internships also prove to employers upon graduation that you’ve already “cut your teeth” and aren’t totally green when they hire you.

6. Learn to budget and be conscious of your checking account balance.  Most people today manage their money via mobile devices and online banking. This is great as long as you maintain a complete understanding of when future transactions are coming in and out of your account.  As a college student, unnecessary overdraft and ATM fees can really eat up your limited income.  College is also a great training ground for living with a budget.  Don’t avoid or hide from your student loans – trust me, they will find you!  Get familiar with the deferment period, anticipated payment amount, and repayment term.  I recommend that you start “living with” this payment before graduation so that you are used to having the new expense.  This can be accomplished by putting the payment amount into a savings account each month.  This does two things; it gets you used to the payment that is coming and helps you to build a reserve to cover those payments.

7. Network early and often, and be open to new opportunities.  Most jobs come from being in the right place at the right time or knowing the right person.  This was a sad reality for me as a graduating senior while sending resume after resume into the black hole of online application sites.  My career here at the credit union started from a conversation I had with the CEO. After talking in his office for an hour about credit unions (which I knew nothing about), he offered me a job in accounting.  I thought I wanted to be an investment banker in New York, but I ended up becoming the CFO for a local financial institution.  You never know where your next opportunity will come from.  Your goal should be to create as many opportunities for yourself as you can.  Don’t permanently close a door that you may need to open in the future.

For many people, college is a time of learning and self-discovery.  That being said, my final piece of advice is to enjoy the ride.  Don’t worry; you will soon have your share of responsibilities as a working adult.  Have a great semester!