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Managing Your Money

What to Do 

As a new student at the university one of the many challenges you'll face is managing your finances. The money-management strategies listed below have proven to be successful for other students.

How to Do It 

• Create a budget. 

• Pay your bills on time. 

• Balance your checkbook or online account weekly.

• Trim extra expenses out of your monthly budget.

• Find low or no cost activities to do with friends.

• Be wary of credit card debt.

•  Learn about the different types of financial aid.

Create a Budget

Creating a budget is one of the most important things you can do to manage your finances as a college student. It's very tempting to spend your money as it comes in. But remember, your money has to last the entire term and not all university expenses will be due at the same time. Creating a budget will help you figure out how and when to spend your money and when to save it.

First, write down all your necessary monthly expenses. These are the priority items, such as rent, utilities, cell phone, car payment, car insurance, food, gas, and any other predictable or scheduled expenses. Then make a list of the other things that you must spend money on regularly but that don’t follow a regular schedule; buying textbooks, TRIMET passes, or trips during summer and winter breaks. Lastly, write down all your "wants," such as entertainment  expenses or luxury items. These might include mid-day coffee breaks (OK, these almost count as a necessity when you're in school), magazine subscriptions, money for dates or evenings out with friends, etc.

Next, write down all the money that you have coming in each month. This includes your financial aid reimbursement, what you get paid from your job, and any extra cash you might get from supportive parents or relatives. It's also a good idea to budget some money for savings. If something unexpected happens, like your car breaking down, you will want to have some extra cash to draw from to cover this kind of emergency. One good rule here is to have enough money in a savings account to be able to support yourself for two months. Subtract your expenses from what you get paid. What's left over is what you can spend on “recreation” like going to the movies and hanging out with friends.

Pay Your Bills on Time

The reality is that bills can't wait. If you don’t pay your utility or cell phone bills, the lights will get shut off and your phone won't work. Additionally, most companies charge late fees or interest on back payments. Paying your bills on time will also help you establish and maintain good credit. You want to keep a good credit score because that's what's used to determine if you're a “good risk” when you apply for a car loan, home loan, or want to make other large purchases on credit. Your score will be tracked by credit agencies and checked by potential lenders if you apply for a loan. This may not be something that you're thinking about as you begin college, but it will be really important for you in the future. The decisions you make about finances now could have a lasting impact later in college and beyond.

A good way to remember to pay your bills on time is to put the due dates for each of your bills on your calendar along with your due dates for school.

If you pay your bills online, your payments will be taken out automatically from your checking account. If you decide to use online payment, then be sure to track which bills are being paid each month and when. The most important thing to remember about online bill paying is that you need to have enough money in your account to cover the payments that are automatically being paid. If you have created a budget and are sticking to it, this can be a pretty stress-free process.

Balance Your Checkbook or Online Account Weekly

Keep all you receipts in one place. Find a quiet time once a week to balance your checkbook or your online account. Sit down with your checkbook and write down every purchase you make and subtract that amount from the balance in your checking account. If you are writing checks to pay your bills, make sure to subtract that amount from your checking account even if the money has not yet been taken out of your account according to the online bank records. One of the most common mistakes that students make is spending money based on how much money their appears to be in their accounts. Only after you balance your account will you know exactly how much money you have; it can sometimes take the bank several days to cash a check.  

Many students find this technique of weekly account balancing very helpful for managing their finances. Tracking, by hand, what money is coming in and what is going out, helps them with their spending decisions for the rest of the week. Another big advantage of this method is that you start to get a better picture of what kinds of things you're spending money on. It can be a real eye-opener when you stack up all the receipts for coffee and add up the total.

Trim Extra Expenses Out of Your Monthly Budget

College is not the best time to schedule an expensive spring break trip, buy subscriptions to magazines (you probably won't have time to read them anyway), or sign up for a brand new Netflix account. Take a look at your budget, and honestly ask yourself if you can afford these luxuries. If so, pick one and then go through one monthly cycle to see how it goes.

Find Low or No Cost Activities to Do with Friends

If you've been hitting the books hard and need a break, there are plenty of things to do in Portland that don’t require spending money. There are a lot of activities to do on the cheap that can keep you occupied while on your study break. For example, Portland has a terrific assortment of public parks. Many students love taking a hike in Forest Park in NW Portland because it feels like you are out in the deep woods while you’re still in the middle of town. You can take public transit from the PSU campus to Forrest Park and get away for a couple of hours. Another option is to take your Frisbee and a couple friends to the community recreation field next to the Stott Center. Not only can you do these activities for free, but you can get exercise while you're having fun!

If  outdoor activities aren't exactly your speed, check out some of the local movie theaters. You can see movies for about half of the regular price at places like Laurelhurst Theater or at any McMenamins with a theater. Even better, the PSU film society offers free movies for students at the 5th Avenue Cinema right here on campus at 5th and Hall Street (map link:http://www.pdx.edu/map.html). One thing to remember is that you don’t have to spend a lot of money in order to have fun.

Be Wary of Credit Card Debt

Credit card companies prey on new students, who tend to be less experienced at managing finances. As a college student you'll receive lots of offers for credit cards. Like other successful students before your time, decide to forgo credit cards all together or limit yourself to one and use it only for emergencies (such as unexpected medical costs or car repair).

Successful students have offered a couple of suggestions to help you avoid over-using your credit card. One tip is to keep your one credit card at the back of your wallet so that it will not be the first thing you see. Another tip is to put a piece of duct tape over the front of the card so that you have to think about what you are about to do before you use it. Unless you've included a card payment in your budget, the money you spend with a credit card is money you don't really have (you're essentially borrowing it from the credit card companies and will pay a stiff interest fee for that service). 

Another important thing to remember about credit cards is that they often have very high interests rates, sometimes as high as 20–25%. Credit cards that are offered to students often have ridiculously high interest rates. These interest rates are attached to every purchase, so you not only pay for your shoes with the credit card, but also the interest rate on top of the credit card purchase. For example, let's say you have a balance of zero dollars on your credit card. You decide to go shopping and purchase a pair of shoes for $50.00 with a credit card that has a point of sale interest charge of 19% as well as a monthly interest charge of 19%. The total you actually pay at the point of purchase is $59.50. When your bill arrives, if you do not pay it off completely, you will be charged 19% interest on that $59.50, bringing your total to $70.80. Additionally, if you don't pay your bill, you'll be charged a late fee, often $20.00 or more. With late fees and 19% interest on $70.80, the following month your bill will grow to $104.25. You get the point. Credit card debt adds up and the interest charged on the capital (the amount you actually charge) can quickly overwhelm a student's limited budget.

Learn About ALL the Different Types of Financial Aid 

To learn about financial aid, schedule an appointment with a financial aid advisor. Before you go, do some research on your own. Find out the difference between loans, grants, and scholarships. Make sure you know how you get each of these types of aid and which ones you are eligible for. Visit PSU's financial aid website to get the contact information and the advising schedule.

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