College Dos: Every College Student Should

Many finance options are limited to certain groups of students: athletic scholarships, academic scholarships, financial need grants, etc.  However, there every college student has a few smart moves that they can take advantage of to help them once they make it beyond the gates of academia.  Heck, some of these options even help WHILE your still in college.

TROLL FOR TEXTBOOKS.  My personal favorite way to save is to minimize the textbook hurt.  Sometimes literally.  Depending on your field of study, a majority of textbooks are huge hard cover behemoths that will place the hurt on your back as well as your wallet.  Check out aggregators like www.campusbooks.com to find competitive prices for your books.  They will nearly ALWAYS be cheaper than buying at your campus store.  For example Biology 7th Edition by Neil A. Campbell et al retails MSRP for $158.67.  Half.com by EBay offers used versions for $23.65 after shipping.  New text books can be had from Biblio.com for $59.10 after shipping.

INTERNATIONAL TEXT BOOKS.  International text books sell for much less than the United States.  The Supreme Court has ruled that the reimportation of these books does NOT violate copyright law (New York Times article “Students Find $100 Textbooks Cost $50, Purchased Overseas” by Tamar Lewin dtd 21 OCT 2003).  The same text book above retails new at Amazon.com for $124.34 but Amazon.co.uk sells the International Edition for £44.99 (90.78 USD at 1 GBP=2.01739 USD). 

Places that specialize in the importation and sale of International edition sell for considerably less.  TextbooksRUs.com sells the International edition for $70.53.  TextbooksRUs.com guarantees the book has the same pagination as the United States version or your money back.  Furthermore if you can read another language (especially one with compacted print like Chinese or Korean) you can find books in that language for even cheaper.  The pagination probably won’t match, however.

SHARE THOSE BOOKS.  Statistics show one in five students are not buying all the required text books.  I am guilty of this myself actually.  Sometimes you don’t need the book at all, and most of the time, you can get buy sharing books with your friends!

MINIMIZE THOSE FEES.  A whole new campus also probably means a new set of convenient banks.  Those convenient banks, however, are only worth your time if you can get access to your money without fees and minimum balances.  (You should not be paying these to begin with!)  If you cannot find a bank like this in your area check out online only banks like ING Direct (www.ingdirect.com) which has no fees or balance requirements and offers free withdrawals at more than 30,000 ATMs.

PICK PLASTIC IN ADVANCE.  If you’ve been on a college campus lately, you know that the only thing you see more of than iPods is credit card applications.  Students get bombarded with offer after offer for this and that credit card and it’s easy to leave college with not only a degree, but 15 credit cards and $20,000 in credit card debt!  Picking your plastic in advance will help you in so many ways!

First, apply for a credit card under your own name and not your parents.  It used to be that you could start building your credit as an authorized user of someone else’s card.  NO LONGER!  You need your own card under your own name to build your credit score.

Second, shop around for cards that give you things.  As a student you can probably only get cards with $500 or $1000 credit limits, but you can get these cards with other goodies.  Check out Citi’s mtvU credit card (www.citi.com) which rewards timely payments (up to 25 points month) and good grades (up to 2000 points per semester).  You get five points for every dollar charged at fast food, restaurants, bookstores, music stores, video stores, and movies and one point for every dollar spent elsewhere.  These points can be redeemed at the ThankYou Network (www.thankyounetwork.com) for gift cards to 50+ popular stores, cash, student loan rebates, statement credit, travel, etc.  You can also get more points by shopping through the ThankYou Network at places like Target, The Gap or 1-800-Flowers.  You can also get 25 more points a month by having a Checking, Savings and debit card (that you don’t even have to use by the way) with Citi Bank.  Note: Gift Cards and Student Loan Rebates give you the most back ($1 for every 100 points).

Third, remember how I said your credit limit is low?  What happens if you need to spend more than that in a month?  This is when you take advantage of your parent’s credit and carry an authorized user card on their account.  This way you can purchase that airfare home to visit and best of all hopefully do it such that you and your parents get benefits and/or free cash (parents consider getting a mileage card from Citi or Capital One to take advantage of your child’s – and your own – travel expenses.).

GET SOME SORT OF JOB.  I know that there are many things you would rather be doing than working, but getting a job will give you a HUGE head start.  I recommend a 10 to 20 hour job as a student assistant on campus as an easy way to do this.  First, not much is usually expected of you.  Sure it might be boring, but on the other hand you might have someone PAYING you to study when there’s not much to do.

Second, you have additional income to spend and save.  Try striking a deal with your parents to help you save some money.  For example, for every dollar you put into an IRA, they’ll put in a dollar or fifty cents or whatever.  Not only are you getting free money with this deal, you’re planning for your future which could (and probably will) take YEARS off your working life and allow you to RETIRE YOUNG!  The dollar you put into your ROTH IRA in college will probably turn into $15.34 by the time you retire and maybe even more*

Third, when you go into the job force a requirement job requirement might say Bachelor’s plus two years job experience.  Guess what?  YOU HAVE FOUR!  Sure it was at a nothing job.  Sure, you had very little responsibility.  But it’s still experience, and that counts.  Four years of job experience might also be the difference between starting at $35,000 a year and $40,000 a year.  That itself means you can contribute to your IRA with money you essentially would not have had.

READ MY BLOG.  I’m only halfway kidding here.  In all seriousness every college student should read websites or magazines that can tell you tons of ways to save money.  Just be sure to use your head to find out whether or not the technique or offer is illicit or not.

*Assumes you are 19 and put $2000 into a Roth IRA for four years while in college and then put in $4000 a year until you retire at age 62.  You will have put in $168,000.  Assuming 10% annual percent yield on your money your account balance at age 62 will be $2.5 million.