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Congratulations! You’re going to college! So what are you going to do about money?

Money Management

For years, your mission in life was to get into college. Now that you’ve cleared that hurdle, it’s time for some more grown-up goals, especially related to money.

It’s time to prove that when you graduated from high school, you also graduated from the Bank of Mom and Dad (BOMAD). Going to college and managing your own money is going to test the skills you learned by having an allowance when you were little. Still, some of you may be surprised to realize how much your parents helped you regulate your purchases or actually funded most of them even as recently as high school. It is possible that the BOMAD is no longer open for business but, even if it is, do you really want to go there?


Don’t approach the BOMAD except in an extreme emergency. Here’s what you need to do to make it on your own:

1) Earn money.

Your biggest asset now and going forward is your ability to work. Get a summer job and save for school. Plan to work during school breaks to replenish your bank account. Once you have the hang of living away from home and managing your studies, work part-time during school. Having a job forces you to structure your time rather than waste it, and money coming in reduces the need to go crawling back to the BOMAD.

2) Pay yourself first.

Start this habit now. Every month, before you pay your bills, sock some money away into a savings or investment account. Birthday money from Aunt Martha? Sock it away. Got a raise? Sock it away! You’ll never miss it and this is a habit that will help you pay as you go for vacations and fun stuff without the temptation of debt. Need help setting up an account? It is okay to ask questions at the BOMAD about this… they will be impressed and happy to help you.

3) Stick to a budget.

Budgeting is not very fun, but it is one of the best ways to avoid a visit to the BOMAD. Temptations are everywhere and some of your friends may have a different arrangement with their BOMAD. But stay strong! There are free and fun things to do in college, student discounts on everything, and school services to help find work, apply for scholarships and financial aid, manage debt and so on. Take full advantage of all of these. As they say on SNL, “Don’t buy stuff you cannot afford!”

4) Minimize debt.

You may have had to take on loans to go to college. Use this money wisely, like for classes and not spring break, and don’t take on additional debt. Also, don’t be fooled by all those credit card offers you get the first few weeks of school. You don’t need a credit card! Credit card companies love college students because they rack up lots of debt and pay lots of interest. Debt, especially credit card debt, makes unpleasant trips to the BOMAD much more likely and will follow you for a very long time.

5) Build good credit.

Start off right by paying all bills on time every time. One bad decision to skip a payment can stay on your credit report for 7 years… almost twice as long as your college career. Using your budget should make it easier to do this. When you’re a pro at managing your budget and it gets closer to graduation, then consider getting a credit card. A history of using it wisely will result in a good credit score and help you when you go to buy a car or rent an apartment on your own. Choose a card with no fee and a modest credit limit, buy groceries on it once a month, then pay it off completely each time. Before you know it, you’ll have a good credit rating and no debt. And you know what that means? No BOMAD!

So that’s it! You have four years as a college student to develop sound money management habits using these five practices. You won’t have to hit up BOMAD for money due to immaturity, inexperience, or lack of planning. The BOMAD won’t have to deal with constant requests from you. Everyone will be happy! And your start on the road to financial independence is priceless!


Cathleen D. photo

Cathleen D. Phelps

Client Experience Manager

Cathleen has two big drivers-–a challenge and a love of learning. She cannot resist a challenge or a problem to solve, and cannot rest until she’s conquered it. Every morning, Cathleen runs or works out at Crossfit for an energy boost that gets her mind awake and going, ready to face whatever the day brings. She admits there’s always something that needs figuring out, and if she needs to learn something new to do it, that’s even better!

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