In college, establishing good spending habits is critical. For a student, making good financial decisions now and learning how to manage their money can save them from decades of loan repayment.
According to Kenneth Kim, a professor in the finance department, there is nothing wrong with students taking out loans to put themselves through college so that they don't have to work at a part-time job, which can potentially take away from the undergraduate experience.
"Loans have a negative stigma associated with them," he said. "There is nothing wrong with borrowing what you need. Successful corporations had to borrow first before they made money."
Kim emphasized that college loans can be beneficial over credit cards because the interest is much lower.
The number one mistake students make is eating out too much, according to Kim. Small meals here and there can add up to large amounts of money in a one-month period.
Instead of making an idealistic budget that is never adhered to, Kim suggests that students make a habit of spending as little as possible so that unnecessary expenses do not become second nature.
Marcilene Lazarus, a freshman chemistry major, has already taken on this money managing lifestyle. She worked at a grocery store before college and uses her savings wisely.
"I just get what I need and don't spend anything else," she said.
Kee Chung, the M &T chair in banking and finance, recommends that students save as much as they can before college and during the summer months when school is not in session. The extra money can come in useful during the semester months.
When it comes to sitting down and looking at one's expenses, David Maye, a loan officer at United Bank of Switzerland financial services suggests starting simple.
"The first step is to figure out your monthly income, whether this is from a part time job, savings or student loans," Maye said. "Second, figure out how much your monthly expenses are, insuring that rent, utilities, food, transportation and entertainment are on there."
Ideally, one's income should exceed expenses. If not, it's time to cut down on extras.
"It's best to trim your expenses to the point that you have a budget surplus," Maye said.
Katie Scarbinsky, a freshman pharmacy major, keeps her budget in line with the help of money from scholarships and tuition money from her parents, leaving her loan free upon graduation.
"I check my bank account constantly," she said.
Alyssa Wisniewski, a sophomore biotechnology major who works at Wegmans part-time, also keeps a strict budget; she puts 100 dollars from every paycheck into her savings accouns and uses the rest to pay for expenses.
James Stahr, a sophomore civil engineering major, recommends purchasing a meal plan that fits student's needs. "Don't waste the meals, you've already paid for them," he said.
When planning a budget, the right bank is also key - find one near campus that offers checking and savings accounts geared towards students. Make sure there is an ATM on campus, using an ATM that is not in your bank's network could cost you about 2 dollars per transaction. Also be sure to check out the bank's overdraft charges and transaction limits.
If you chose to open a credit card account, be cautious and spend only what you can afford to pay off every month. Be aware of zero percent introductory rates that last only a few short months.
Kristen Mruk, a sophomore international business major, commutes to school and has managed to get by without taking out a loan, although it is necessary for her to budget gas into her weekly expenses.
"It's pretty easy," she said, "if you pay attention to where your money is going and are smart about it."
Photo: Courtesy of Laron Fomby
