Thursday, January 27, 2011, AM | Leave Comment
Financial literacy centers in colleges have begun to offer tips for saving and spending in 2011 and beyond. Some institutions have made it into a new year resolution. It perfectly makes sense to have some kind of literacy about students’ personal finances. Some schools and colleges have always offered a course on this topic but only to the extent of how to balance a check book.
A variety of national surveys tell us the number one goal should be for people to save more, spend less and decrease debt in 2011. Some students are in deep debt at the time they graduate.
“New Year’s Resolution is basically to save more and make sure the budget works,” said students who want to save more. Many students pay for things on a daily basis they don’t really need.
“It requires folks to take a hard look at their personal budget,” said John Pelletier, the director of the Center for Financial Literacy at Champlain College. Pelletier says there are several steps to spending less– number one, keep track of discretionary purchases; wasted money you could save.
Many college campuses are served by Starbucks where a cup of coffee can set you back more than $5. For most people, drinking on cup is not enough. Once you are hooked on Starbucks, it will last for many years unless folks especially students conscientiously decide against drinking $5 a cup of coffee. These and other expenses add up on top of tuition fees, books, and dorm expenses.
“The coffee they have at the coffee shop or Starbucks or how many times they’re having lunch a week, if they actually keep track of their spending for a few months and look at where they are spending it, I think most folks would see there are places where they can save some money,” Pelletier said.
Basic Tips Colleges Can Give…
Colleges can provide many tips of how to save and spend. They have professors who teach courses in finance, accounting and national economy in general. Because of the lousy national economy, it may be the best year for schools and colleges to start giving students tips of how to go about their personal finances.
The student must create a budget and follow it through all the years that they would spend in college.
There are generally two kinds of expenses: Necessary and Discretionary. The student should have a clear perception of the two.
Once you know what expenses are discretionary, cut down at least 20% of it. You would soon find out that the 20% or more was a waste of money and that saving it was not that hard.
Some students can easily save $20 a day by cutting on discretionary expenses and you could be saving $600 a month. Add it to a savings account, or better yet, a 401(k)
Get In the Habit of Saving for Retirement
Experts say investing in your 401(k) if your employer contributes a match is one of the smartest things you can do to save for the long term. Let’s say your employer matches 2-to-1. That pretty much guarantees a 50 percent return. And yet, experts say most people don’t try to maximize to the greatest extend they can that match.
In a Nutshell
“Most people, if they actually did the exercise, will be surprised on how much is being spent on things that don’t fall into the necessaries,” Pelletier said.