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Avoiding student debt problems
Категория: «Finances » Credit and Debt>» »
Viewed: [170] | Comments: [0] | 2-02-2010, 01:00
By Gordon Powers, Sympatico / MSN Finance
New college students have a lot to learn about life on their own. Unfortunately, the majority of university newbies have had minimal experience dealing with money, which is why it's often a major source of stress for them. It’s hard to suddenly live on a set budget if you have never done so before.
As a result, many kids have problems managing their cash wisely and can end up spending much more money than they have and then borrowing unnecessarily – often without parents’ knowledge.
Teach your student how to maintain a budget. If they’re getting a chequing account for the first time, show them how to balance their chequebook and record their transactions to avoid bouncing cheques. While you might still do this by hand they’ll likely be more comfortable using Quicken or colourful cash management sites like Mint.
Being away from home for the first time, students often don’t realize how small purchases can add up. Because of this, too many end up strapped, particularly when it comes to credit cards which have become so easy to get that you can sign up for one between classes, thanks to schools allowing credit card companies to peddle their services on campus.
Used wisely, credit cards can be beneficial, especially in emergencies like unexpected car repairs. But, not having had one before, many students don’t realize the added costs – i.e. 18 to 19 per cent interest charges – if the bills aren’t paid immediately. Nor the up-front fees they may face.
Here’s a cautionary tale from a McMaster student who, after several years of school, seems to have finally figured things out. And another from a Simon Fraser student who wonders if universities are doing enough to protect their charges.
New college students have a lot to learn about life on their own. Unfortunately, the majority of university newbies have had minimal experience dealing with money, which is why it's often a major source of stress for them. It’s hard to suddenly live on a set budget if you have never done so before.
As a result, many kids have problems managing their cash wisely and can end up spending much more money than they have and then borrowing unnecessarily – often without parents’ knowledge.
Teach your student how to maintain a budget. If they’re getting a chequing account for the first time, show them how to balance their chequebook and record their transactions to avoid bouncing cheques. While you might still do this by hand they’ll likely be more comfortable using Quicken or colourful cash management sites like Mint.
Being away from home for the first time, students often don’t realize how small purchases can add up. Because of this, too many end up strapped, particularly when it comes to credit cards which have become so easy to get that you can sign up for one between classes, thanks to schools allowing credit card companies to peddle their services on campus.
Used wisely, credit cards can be beneficial, especially in emergencies like unexpected car repairs. But, not having had one before, many students don’t realize the added costs – i.e. 18 to 19 per cent interest charges – if the bills aren’t paid immediately. Nor the up-front fees they may face.
Here’s a cautionary tale from a McMaster student who, after several years of school, seems to have finally figured things out. And another from a Simon Fraser student who wonders if universities are doing enough to protect their charges.