Financial Lessons for College Bound Students

Today we welcome John Gower, who is knowledgable about all things finance (i.e., How to Pay for College). In this article, he’ll share with you some tips on how to manage your money before you enter college and especially while you’re in college.


As high school seniors prepare to head to college, the prospect of independence is near. However, that independence might not be as hands-off as they (or you) would like. Managing your child’s expenses while they are living at home is quite different from doing so while they are in a dorm room halfway across the country. Before the big move-in day, consider these tips for steering your soon-to-be college freshman towards a life of financial independence and success.

1. The basics: Staying in the green

If you have not done so already, help your student open a basic checking account. Many banks offer accounts targeted to students with no minimum balance or maintenance fee. The account you open does not necessarily have to be at the same bank you yourself frequent. A better gauge of which bank to pick may be the proximity to the campus your child has chosen to attend. Finding an account with the lowest fees and having easy access to an ATM for cash withdrawals ought to be the driving concerns, as most else can be managed online.

Tuition and housing costs aside, there are still a number of expenses that necessitate the use of a checking account. The occasional weekend trip, basic personal expenses, or a work-study job on campus are a few of many activities that will force your student to start some sort of budget management habits. Teaching your child how to manage his or her checking account without incurring overdraft fees is a great stepping-stone for the future.

2. Money management: No excel worksheet needed

The average student loan debt for a graduate in 2012 was around $27,000. Whether or not your child’s education costs will be covered by loans, grants, scholarships, college savings, or a combination of the above, keeping your student aware and involved in the payment schedule is a place to start responsible financial habits.

This does not entail leaving your student out in the cold to deal with complex financial aid issues, but instead giving them some additional responsibility. This can be as simple as making tuition payments themselves (on time) or being in charge of paying for housing each month. If that seems like too much to handle from the get-go, consider instead making out a small home utility bill such as cable or internet in your student’s name to get the same benefit of building responsible and timely payment habits.

3. Plastic: Put away those scissors for now

Due to new regulations passed in 2009, banks are now prohibited from passing out free water bottles, t-shirts, and other goodies on campus as recruiting efforts to get students to sign up for credit cards. So while you don’t have to worry as much about your student coming home on their first Thanksgiving back with a pocket full of plastic, there is still good reason for concern. Start building good credit habits early, as when your child reaches the age of 21 they can apply for credit cards without a co-signer.

There are a number of benefits to helping your student build credit. A high credit score will help them once they are out in the real world signing apartment leases, getting credit history checked by employers, and applying for car loans. Credit cards of course have their pitfalls. They have the potential to be widely misused if not grounded in the fact that plastic is indeed spending real money that must be repaid in full. In order to fully understand this, your student should know what the terms minimum payments, annual fees, and APRs mean at the very least.

If you have allowed your high school graduate to piggyback on your existing credit card, remember to keep a close eye on the account, as anything they do has the potential to hurt your credit history.

The tips above are a great starting point for beginning a conversation between you and your college-bound senior. Start small, and most importantly communicate and be available to guide your child as they navigate tricky financial waters in college.

John Gower is a writer for NerdWallet, a personal finance website dedicated to helping consumers find the best free checking account, high interest savings account, rewards credit card and more. 

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Atomic Wedgie and Entrepreneurship: A Fireside Chat with Porter Haney

No, this article is not about how to give a wedgie or even wedgie videos. Instead, this is an interview with Porter Haney, an entrepreneur and founder of wedgies.com, a polling platform for the real time web.

Similar to our interview with Neil Patel, we’ve asked Porter a few questions with the hope that his answers will provide good advice for those currently in high school or college but wish to eventually become an entrepreneur.

After this post, go check out wedgies.com and become a wedgie boy or a wedgie girl. Sounds weird, I know. Anyways, enjoy the interview.

1. Can you share your background with the audience and what you’re up to currently?

I’m a passionate skier, photographer and entrepreneur. I recount our outdoor adventures atFamousInternetSkiers.com and am currently building wedgies.com, a polling platform for the real time  web. We’re part of the burgeoning #vegastech startup scene and Downtown Project, an initiative to make Las Vegas the largest community focused city in the world.

2. Thinking back to your time in High School and College, what classes or training do you suggest for students aspiring to become entrepreneurs one day?

I relate entrepreneurship to the simplest forms of education.

When you’re in grade school you’re learning simple skills – how to make friends, how to socialize, how to communicate. At it’s core, entrepreneurship is about building lasting relationships through business. These skills are very human, and things you might pickup in the halls of school as well as in the classroom.

I’d encourage students to find something they’re passionate about, people they want to surround themselves with while they chase that passion, and a patience and resilience to chase that passion for a long time.

3. So, a tutor is kind of like a mentor. What mentors did you have and what affect did they have on your career of life decisions?

Entrepreneurship is a skill best taught through mentor and peer networks. You can’t learn every entrepreneurship lesson by reading a book or talking with other potential entrepreneurs. You need seasoned people, who’ve been through similar businesses and experiences. They’ll be the best guiding light for you as you try to tackle new problems.

4. Any final career advice for the budding entrepreneur in High School or College?

I believe in a few core rules and try to follow them in most aspects of what I do.  Treat others the way you want to be treated. And, two wrongs don’t make a right.  I believe that following these types of rules, while working hard, creates sustainable success that you can be proud of as an individual and a business.

To learn more about Porter, you can follow him on his Google Plus Profile.

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Preparing for Upcoming Student Loan Payments: To Defer, or Not to Defer

College students with significant student loan debt who also graduate during a down economy are faced with a big challenge. Finding and keeping a job during an economic recession is hard enough for those who have long since graduated, and this challenge becomes even more difficult for new waves of college graduates who often have little job experience under their belt. Finding a job for these graduates tends to be the most important task for them, especially in order to pay back student loans that are accumulating interest.

Consider the data; student loan debt has surpassed credit card debt in the United States. According to Pew Research data, a record one-in-five households owe student load debt. In 2001, 12% of American households had student load debt. This number increased to 15% in 2007, and by 2010, had reached a staggering 19%. Recent data from the New York Fed shows that in the first quarter of 2012, the under 30 age group has the most borrowers at 14 million, followed by 10.6 million for the 30-39 group, 5.7 million in the 40-49 category, 4.6 million in the 50-59 age group and the over 60 category with the least number of borrowers at 2.2 million for an overall total of 37.1 million.

Paying Back Student Loan

Many people with student loan debt who have yet to find a job are considering loan deferments to stymie their student loan payments for a short period of time while looking for a job or saving up enough to make their first debt payments.

Nevertheless, deferments have their pros and cons. Students pondering whether or not they should defer should conduct solid research about deferment while finding out all of the policies and terms of deferment from their respective lenders. Deferment, sometimes called forbearance, is not for everyone, so it is important for recent grads to analyze their financial situation and determine the best route for them in terms of paying back student loans.

Missing a student loan payment is never a good idea. Defaulting on a loan can cause penalties on a person’s credit score or have their loan sent to a debt management firm that can impose other, more dire penalties against the debtor. In a situation in which a recent graduate does not have savings or access to finances to begin to pay off a student loan, deferment is one method that can be used to avoid defaulting.

Deferring Student Loan

However, many student loans have the option to defer one time only, or one time within a given time frame. If this is the case, graduates must carefully choose when to defer. This is extremely difficult to do since no one can tell the future, making it often impossible for those new to the job market to know what their employment status will be in coming years. Deferring while working at a low-paying job may be a bad idea if the job doesn’t work out and the debtor finds him or herself completely unemployed the year after with no option for forbearance since it has already been used. It is therefore extremely important for all those with a student loan to assess what the lender terms and guidelines state, especially when it comes to deferment.

As graduation approaches, current students should do as much homework as they possibly can as they prepare to take on their upcoming loans. Organizing all of a lender’s information and ensuring that important terms and policies in the fine print can be found easily, especially in the event that an important question arises in the middle of a student’s payback or deferment period. Further, students should ask lenders what they monthly payments might be, how long it would take the loan to be paid off (if minimum payments are made), and at which rate the loan will accumulate interest over time.

Additionally, some people do not qualify for deferment. Lenders generally have specific criteria that debtors must meet in order to qualify for special student loan repayment programs such as deferment. Many people who find themselves outside of the criteria to receive a deferment option either wind up defaulting on their loan payments or are forced to consolidate their debts through a debt consolidation agency. It is nevertheless important to always keep an open line of communication with the lender, as many are focused on getting paid back, and are therefore more apt to work with recent graduates who might not qualify for their forbearance programs.

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Time Management for High School Students

There are a few age-old questions such as,

  1. What is the meaning of life?
  2. What happens after I die?
  3. Why do bad things happen to good people?

Then, there are other types of questions that don’t quite make the “big questions of life” category, but they are still pretty important. And, when you’re in high school, often the small questions are the big concerns.

PS: Yes, the picture of a girl with hair on her face has nothing to do with high school time management. But – don’t you think it’s interesting? Yeah, me too.

And so it is today. I asked my daughter, Kameron, to help me better understand what she does to stay on top of things as a freshman in high school. Below are her words and may they be helpful to you.

High School Time Management

I’m only finishing my freshman year, but I’ve seen enough of high school to understand that the greatest skill needed is how to efficiently manage your time. Making time fore homework and other activities is one thing, but getting the motication to do them is another. Here are some suggestions on how to develop the havit of managing your time.

  1. Get enough sleep. You nee your sleep to stay awake and be aware.
  2. Keep some sort of planner. This will help you keep track of things you need to get done and help you remember the homework for 1st period, seven periods later. This will also help you remember other activities in your life.
  3. Make the time to get things done. If you sis there in life waiting for an open slot of your time set aside for duties, you’ll never get those done. Make time for these things and stick to the times, getting as much done as you can.
  4. Put distractions away. Is it homework time? Put your phone away, keep the television off, don’t even eat until you’ve finished what is to get done during this time.

By following these simple steps you will quickly develop a habit of getting things done and managing your time. Be prepared to feel proud of yourself when everything is done and there is time left in the day to play.

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