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The College Connection

Finance 101
by Carl E. Carey, Jr.

There are so many things that I wish someone had told me when I was in college. One of the major things I didn't know was how important it was to make good, sound financial decisions. I know what you're thinking. It's tough to make financial decisions when you don't have much money to make those decisions with! Actually, this is the time when the foundation to your financial future should begin.

One of the biggest mistakes that I made in college was accumulating too much debt. The credit card companies set up shop on campus and handed out free gifts to all who would come and sign up. I didn't know any better then. I figured that I would fill out the application, get the free gift and only use the credit card if an emergency came up. I thought I had all the answers. After receiving my credit card in the mail, it wasn't long before I needed to use it. Pretty soon, I had maxed it out. The simple solution was just to go get another one! Before I knew it, I had Visa, MasterCard, American Express and Discover! The same credit card companies that were giving me free gifts to sign up were now calling me demanding payment. I didn't even want to answer the phone. After I graduated, it took me three years to pay off those credit cards. I vowed that I would never make that mistake again and till this day, I haven't.

Try your best not to get in over your head with credit cards. The minimum payment they ask for each month is deceiving—and believe it or not, sometimes making that payment will be tough to do. Be wary of credit card companies. They make a ton of money from charging an unreal amount of interest. To be honest, it is best to stay away from credit cards if you can. Sure, they can help you establish your credit, but they can also destroy it.

Another mistake a lot of college students make is taking out too much money in student loans. The money is easy to borrow—but hard to pay back. It is not uncommon for students to accumulate $30,000 or more in loan debt to finance their education. In a lot of those cases, the person really doesn't need all the money they have borrowed. A lot of students just borrow the maximum amount allowable so they can have some extra spending money. The problem with that philosophy is that you really do have pay the money back—with interest. If you end up having trouble finding a good job right after college, the loans you took out will become a living nightmare. Harassing phone calls, ruined credit and big worries—all because you were trying to get through school.

Sometimes, loans are necessary. It's the amount of the loan that becomes the problem. To control the amount you borrow, look at other alternatives like scholarships, grants and a part-time job. When your college days are over, you want to be excited about your future— not burdened by your past expenses.

I have one final piece of financial advice. Realize that it's never too early to start saving money. Even if you're only able to save $50 per month—that's $600 in a year. Having a little money stashed away is something you will really appreciate if you are ever faced with tough financial times.

Take control of your financial future. Avoid credit cards, be conservative when taking out student loans and start saving today…you'll be glad you did.





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