Do I need a credit card?

This semester, I’m taking a finance class, which is proving to be really useful. I’ve never had a credit card myself, and honestly I’m a little afraid of getting one. I’ve heard too many horror stories of college kids going ridiculously into debt because they charged their whole spring break vacation on a credit card and now they can’t pay their bills. According to my finance teacher, over 80 percent of college students currently have a credit card, and roughly 1 in 4 college students is $3,000 or more in credit card debt.

Whether or not you actually need a credit card is an ongoing debate. Some people think that you need one in order to establish credit or to make big purchases such as a house or to finance a car. Other people have them just in case of emergency situations, such as your car breaking down and a tow truck is not within your current budget. There are also the folks that say that you never need to get a credit card – you can build your credit based on whether or not you pay off car, house, and college loans, etc. Whatever camp you are in, chances are that at one point or another in your life, you, your spouse, or your child (oh no) will have a credit card.

My finance teacher seems to think that there are good reasons to have a credit card, such as some of the reasons listed above. But she also drilled it into us that we should not buy meals or vacations with a credit card. Credit cards allow you to live outside of your means for a short time – until the bill comes, and you have to pay it all back and then some. Some people think that they can just spend all of the money that they want on a credit card and then file for bankruptcy and then get off scott-free without having to pay any of it back. WRONG. Any charges made within 20 days of the filing date are charges that you still have to pay off. Also, any personal loans you take out within 40 days of the filing date also have to be paid off.

Did you know that your interest rate on your credit card can be increased even if you are paying your bill on time? Yup. That happens when you pay back other lenders late. Or, for any reason that the credit card company feels like. Which is why it’s wise to only use credit cards for emergency situations. Just something to keep in mind.

 

Advertisements

Bad Monetary Advice

I’m not saying that I know everything about money. I’m really just learning by doing, and by doing my research. Here are some of the things that I have heard or read that will definitely hurt your finances more than they help them.

– If you see some hot shoes you really want, just buy them, but keep the receipt. When the shopper’s high wears off, you can decide if you really want them, and return them if you don’t.

If you don’t have the self discipline to not impulse buy in the first place, you won’t have the self discipline to go back to the store when you realize you don’t need those sexy shoes anymore. I’ve done this myself – I’m honestly just too lazy to return things. It just seems too arduous to drive to the store I got the shoes from, and then give them my address and all of my information all so that I can get the opposite of a shopper’s high. So now, I just avoid all that drama by being smart and not impulse buying in the first place.

– Get a credit card and pay the minimum every month. Because you obviously wouldn’t want to give the credit card companies more than you have to.

People seriously think this. Most people following my blog are already fairly aware of the evils of credit cards, but in case you haven’t heard – ONLY USE CREDIT CARDS FOR EMERGENCIES, because the interest on them adds up fast. And always always pay above the minimum, because the faster you pay off your credit card purchases, the less interest you pay overall. Now is definitely not the time to get swamped with credit card debt. Or ever.

– Eating out is cheaper than cooking, because with cooking you have to buy all of the ingredients, and you always end up buying more than you use in a recipe.

I think that this is a rather short-sighted assumption. Cooking is cheaper than going out to eat the majority of the time, because any ingredients you don’t use you can always save for later use. And leftovers of cooked meals are great for lunch the next day. When you go to a restaurant, you don’t just pay for the food, but for the person cooking it and the establishment itself, etc.

—–

So I’ve been thinking about my subject matter, and the fact is, finances are a lot simpler when you’re in college than when you enter the real world. I do anticipate keeping this blog going once I’ve graduated, but it can’t hurt to prepare ourselves for when that day comes. So, from now on, I’m going to incorporate occasional lessons about financial concerns that you’re likely to have after college, such as insurance, taxes, and a mortgage. I don’t know about these things on an experiential level, but I’ll do my research the best I can and hopefully bring the things that I learn to my readers in a convenient, easy-to-understand way. Until next time,

Rachel

College Loans: Crisis around the corner

Hey guys, sorry it has been a while. Anyway, for this post, I decided to focus on something a little more hard-hitting:

Recently, a slew of new statistics has come to light about the increasingly staggering college debt that is weighing on the majority of college grads. The Bureau of Labor Statistics says that college tuition is increasing at a much faster rate than average income. Available grants and scholarships can’t keep up with the demand, either. States, strapped for cash, are cutting the amount of money that they give to institutions of higher learning, and as a result, colleges are leaning on students even more to foot the bill. And as a result, the number of college grads defaulting on their loans has increased considerably, according to the U.S. Department of Education. The National Association of Consumer Bankruptcy Attorneys even hypothesizes that college debt could bring about the next economic crisis – and they aren’t the only ones.

So what can you do to make sure that you can put your college loans behind you and have the money to buy a car and a house? There isn’t an easy, presto-my-debt-is-gone solution. You have to pay your college loans back, even if you go bankrupt. And do NOT default on your college loans. Seriously.

Here are a few tips so that you can be smart about paying them back and put them behind you as quickly as possible:

> If you have federal loans, awesome. Don’t try and pay those back using private lenders because federal loans generally have more reasonable interest rates.

> The faster you pay back your loans, the better. Finance 101: If you pay back your loans in smaller increments over a longer period of time, you’re going to end up paying much more in interest overall. We’re talking thousands of dollars more.

> If you can, sign up for more scholarships now!!!

> Make sure, when asking for a grant or a loan, be careful with your calculations and only request as much as you actually need. If you can, try to cover the cost of food, transportation, and maybe even housing by getting a part time job.

> If you’re nearing the end of your college career (like me), and you aren’t sure exactly how much you will be paying back, get that information now, including what your interest rates are going to be. You may have several different interest rates.

Accounting for new expenses

I knew that this would happen. I knew that as soon as I had figured out approximately how much money I could expect to save this semester – to start paying college loans, or for an apartment, or something important like that – something unexpected would come up. I only have my own clumsiness to blame. I dropped my phone into some water, and this time, it didn’t recover. So, since I had to buy a new phone, I decided it was time to join the rest of modern society and get myself a smart phone. I paid for the phone myself ($100), and now I have to add a data plan to my monthly expenses ($30/month) plus insurance for the phone ($10/month). Sure, I consider the convenience of a smart phone to be worth it, but then they had to cut hours at one of my jobs. So now, I’m getting less work hours (and less money) than I did before. And I have even more to pay for.

Tightening your belt is never a pleasant experience.

So, what do you do when you fall into the kind of situation that I am in right now? First, re-budget. Figure out how much less money you will be making, and determine where you can most afford to make the sacrifice. Can you afford to party less? Can you afford to use your car less often and save on gas? Can you sacrifice name-brand peanut butter and orange juice?

Pick up extra work shifts. If you had one of your shifts cut, just think of it now as a shift that you can move around to other times, depending on the needs of your fellow employees. Be the generous person who people can count on to pick up the slack. Don’t ignore those emails.

Don’t owe people things. I know that since you’re running low on cash, you have the urge to turn to your friends for help in your time of need. You might say “Hey, I’ll get you later.” But promises like that are just going to dig you into a hole. If you really need your friends to help you out, offer to repay them by helping them with their homework or with their chores. Or offer to be their wing(wo)man sometime.

Lastly, always make sure that you have money saved for instances such as this. Maybe you aren’t graduating soon, but you should still put money into a savings account regularly. Because no matter who you are, inconvenience is bound to happen, and you always have to spend more than you expect.

 

The paper heart: How to not spend a fortune on Valentine’s Day

Valentine’s Day is just around the corner, guys. I do mean guys, specifically, because for the most part, the pressure is on the dudes to roll out the romantic red carpet for their ladies. I’m here for the college-aged dudes who are likely broke and therefore have constraints on how lavishly they can express their love to their girlfriend.

> If you live somewhere that actually has a nice climate (hint: not here), take her to a state park or any pretty outdoor area and hike around. Take your time and explore hidden paths off of the main walk. People-watch – there are always interesting people hiking or biking or walking their dog around big parks. Then go to a more secluded area (preferably one with an awesome view, if you can locate one) and have a picnic. Make sure it’s a nice picnic, don’t just make PB&J.

> Bake something together, like cookies or cupcakes. Make sure it’s just the two of you at home and you won’t be disturbed. Turn on music you both like – either fun music that makes you want to dance, or romantic music – and get to baking. After the cookies/cupcakes come out of the oven is the even more fun part – you get to decorate them with frosting and sprinkles! Then later, you can watch a movie together and eat your baked goodies with ice cream.

> Going out to dinner is pretty standard on Valentine’s Day, but this year, be adventurous. Go on the internet and search for a little-known place that the two of you have never been to and that people have recommended highly. Anything from the family-owned chicken-and-waffles joint to the well-hidden French bistro to the tiny Ethiopian restaurant will do, depending on what food you’re hankering for. Just as long as they have rave reviews on the internet.

> Can you sing? Yes you can. Head out to karaoke night at a bar. Don’t get drunk, that’s expensive and not romantic. Have a good time watching the other participants (there’s always some good, some bad at karaoke night, but it’s all entertaining). Be a good sport and cheer for everyone. Then get up there and sing something. It can either be a song that you LOVE (and therefore will sing with all your heart and soul, like Queen or Journey) or a song dedicated to her. It doesn’t matter if you aren’t a world-class singer, or even a good singer. What matters is that you look like you’re enjoying yourself on stage.

: )

Cheap cooking from a seasoned “expert”

I’m still new to this whole cooking-on-a-daily-basis thing, so I got someone who actually does cook daily to send me a few recipes for me to publish. (FULL DISCLOSURE: This person is my boyfriend.) Not to mention, he manages to cook cheaply, but still doesn’t skimp on flavor. I plan to cook several of these recipes next week, so our resident “expert cook” knows that if these recipes are faulty in any way, I will find out, and he will pay to the full extent of girlfriend-law.

He has also included his own annotations on how much you can expect to spend per meal on these:

Oatmeal

– ½ cup water

– ½ cup milk

– ½ cup oatmeal

– pinch of salt

– 2 tsp brown sugar

– sliced banana

1. Heat water and milk on stove on medium heat until just under boiling

2. Mix in oatmeal, salt, brown sugar and banana

3. Cook until desired consistency, stirring occasionally

I bought a 30-serving container of oatmeal for $3.50, and bananas are $0.44 a pound, which usually comes out to about $1 for a week’s worth. Everything else you’ll probably have around anyway (substitute more water for milk if you need). That’s less than $0.30 a day for breakfast!

If you get bored of bananas, mix some other fruit in, or some maple syrup.

BBQ Sausage Potato

– 1 potato

– 1-2 sausage links, sliced

– ¼ onion, chopped

– bbq sauce

– butter, cheese, sour cream to taste

1. Preheat oven to 400

2. Poke holes in potato and bake at for 1 hour 15 minutes

3. When potato has about 15 minutes left, start heating sausage and onions stovetop

4. Cook sausage, flipping occasionally until brown on both sides

5. When potato is ready, slice and mix in fixings, top with sausage and bbq sauce

Potatoes are $0.88 a pound, so depending on size they’ll run you between about $0.50 and $0.75 each. I buy sausage that a local bbq joint makes (they sell it at the grocery store) and can get enough for three potatoes for $7.00. Counting in the cost of whatever fixings you’re going to use, each meal will run you less than $4.00, and if you buy a big enough potato, it can make a big dinner.

Chicken Soup …Stuff…

– chicken meat (I prefer boneless/skinless thighs)

– 1 can cream of chicken soup

– 1/3 cup flour

– 1/3 cup milk

– 1 egg

– seasonings (I like black pepper, salt, garlic)

– ¼ cup rice

1. Preheat oven to 375

2. Heat olive oil in a pan over medium heat

3. Begin boiling water for rice (1/2 cup)

4. Mix milk and egg in a shallow bowl, and flour and seasonings on a plate

5. When oil is hot, dip chicken in milk mixture, then seasonings, then lay in oil

6. Cook each side of chicken for one minute or so, until breading is browned

7. Remove chicken and place in greased oven pan

8. Pour cream of chicken soup over top of chicken and cover pan with foil

9. Bake chicken for 45 minutes or until there is no pink when cutting through the thickest part of the meat

10. When water is boiling, stir in rice and turn heat down to a simmer, cover

11. Everything should be ready at about the same time – serve the chicken and gravy over the rice

A pack of chicken runs around $5-6, the soup costs about $1.50, so counting that and a portion of the various seasonings and rice, this recipe should cost you no more than $8.00, and makes 2-3 meals. You can always make more rice if you want to stretch it farther, just remember to use a 2:1 water to rice ratio.

To make BBQ chicken on the oven, simply replace the cream of chicken soup with BBQ sauce and add a little red pepper to your seasoning mix.

“I remember this being really good when I was little” style macaroni and cheese with a side of broccoli

– 1 box macaroni and cheese

– 2 hot dogs

– broccoli

– salt

– red pepper

1. Cut up the broccoli and put it in a pan with the seasonings and a little water, place over low heat and cover

2. Cook the macaroni and cheese following the instructions on the box; you will need milk and butter (I typically use ½ the amount of butter called for)

3. At the same time, cook the hot dogs, you can do this stove top or in a toaster oven

4. When the macaroni and cheese is ready, slice the hot dogs into bite size pieces and stir them in

5. The broccoli will be ready after about 20 minutes

I’m not too sure how much everything in this one will cost, but not more than a couple dollars. You can skip the broccoli if you want as well, I just use it to add something healthy to this, and to make it a full two meals – usually dinner and lunch the following day.

Baked Sweet Potato Snacks
– 1 sweet potato
– brown sugar
– cinnamon
– cayanne pepper

1. Preheat oven to 400
2. Cut sweet potato into thin slices and lay out on greased baking sheet
3. Sprinkle with brown sugar, cinnamon, and just a pinch of cayanne pepper
4. Bake until crispy on edges, let cool and enjoy

Sweet potatos are around $1.00 a pound, and you get a lot out of each one, so this is a good cheap snack a