Money Issues at US Universities
Tuition fees all over the world are expensive. Especially if you think from the Pakistani perspective. Studying abroad is expensive and should be viewed as an investment. Universities in the US are extremely expensive, especially if you take into account the current exchange rate. This makes it very difficult for students in the US to manage funds, Given the current inflation, that is lifting up the prices of essentials all over the world. All these factors affect international students more than domestic students.
For many students, university is their first money management experience. However, many students are not that well prepared to manage their own finances. One of the major reasons that students leave or drop out of university is because of finances. This is usually often due to poor personal finance management.
Parents recognize the need for their offspring to have basic personal finance knowledge, but many don’t know how to instil good money management in their children. Parents need to acknowledge that learning good personal finance habits doesn’t have to be a problem or complicated.
If young people practice basic money management techniques, then university students can feel confident about their ability to manage their finances.
Common Financial Problems for College Students
- Not Knowing Where Their Money is Being Spent
Want to know a secret to financial success? Know your meand and live within your means. Even the rich try to live within their means. THey think through their decisions, look at Elon Musk pulling out of the twitter deal. Overspending is a problem everyone faces at one time or another – especially college freshman. A lot of these students run out of their savings or reserves very quickly. This puts a strain on the income coming in from part time jobs.
The first thing every university student should do to gain control over their financial lives is create a budget or spending plan. Having a budget will allow students to make a clear cut identification of where their money is going and where they can save their money through intelligent spending. It is recommended that students try different budgeting softwares. There are plenty of Apps which can be installed on your phone. These Apps can help you budget and keep track of your finances as well. Make sure the plan is personalised.
Basically, when creating a budget plan, you tally your income to your expenses. Making your income and expenses match. The ideal is to have more income than your expenses. This means your financial life is balanced and you are living within your means. If this is not the case then you are in trouble, this means you are spending more than you are earning and need to adjust your spending decisions.
- Not Having a Planned Budget for Their Money
Students usually have no plan on how they are going to use their money. If this is the case, then you would benefit from setting financial goals or key financial markers. We all want to get certain things out of life, and we have to plan for how we will pay for those things. For example, a common financial goal for students is to pay for their own tuition. Students need to write down this goal, as opposed to just thinking about what they want to do with their money in the future. Writing goals down is a good way to keep yourself accountable and also create a plan. If you plan better than of course you will be more successful. Writing down a goal makes it more effective and you are more apt to remember and reach it.
Another goal might be to have an emergency fund to use for unexpected expenses, such as trips or vacations or car repairs. An unexpected expenditure can set you back months. You could really end up in tricky situations when you are abroad. That is the reason why you need to be responsible with your money and really plan your way through the jungle of financial decisions. To save money, students should sideline money to a savings account first. They should try to put aside 5-10% of their monthly net income for savings.
- Not Determining Wants vs. Needs
Sounds simple and basic, but many students have trouble determining their priorities. A lot of students plan but lack the self control to not spend extra on shopping or food. A lot of the time these impulsive decisions can add up and create major financial problems in the long run. It is best to be stringent with your planning and determine what your expenditure will be and on what things. Following is a good example of choosing between wants and needs: You probably understand food is a need and coffee from a barista is a want. However, there are almost always cheaper alternatives for your “wants.” For example going to a convenience store for a cup of coffee or getting pre-made instant coffee from street vendors. Or better brew your own coffee at home.
- Peer Pressure
Peer pressure is a very powerful phenomenon in universities. It is difficult for people to say no to their friends. Students need to understand that it is okay to say “no”. FOMO or fear of missing out is something we all face at some time of our lives. It is the moment we let the impulsive part of our brain take complete control of our decisions. We simplify everything to the point where we do not think beyond the event in question. If your friends want to go out to eat, watch a movie, or go on a road trip, but they know they do not have enough money in their entertainment budget, they should know they don’t need to give into peer pressure. This is where financial goals are important – students need to concentrate on what they really want out of life in order to help them avoid overspending. Plus, if they make good financial choices, they could help their friends make better financial choices.