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Students make adjustment from home life to college

May 3, 2007

A major adjustment many college students must make is the transition from a home life with parents and family, to a life of uncertainty and being on their own.

There are many new experiences open to the college student. Two of them are income and credit.

Students at any level must decide how to effectively budget their money and determine if a loan and/or credit card is the proper solution.

There are many reasons students may consider or need credit, according to the CHASE Credit Survival handbook. Students may receive credit to pay for tuition or other college related materials. They may also use it for car purchases or payments as well as having it to fall back on in case of emergencies.

Improper budgeting and excess use of credit can land students in a lot of debt, and could, in turn, result in a bad credit rating, meaning it will be harder to get approved for credit in the future.

The Credit Survival handbook gives some steps that should be taken in order to obtain a minimal and reasonable debt to earn a solid credit history.

Some of the things it suggests are to make payments on time, be aware of limits and create a realistic budget and stick to it.

“Students need budgets or else they can become overwhelmed and find themselves in financial trouble,” Director of Financial Assistance Sandra Oftedahl said.

Oftedahl said due to being newly-exposed to credit cards, combined with a lack of parental supervision for the first time, college students are more
susceptible to going over budget and falling into debt.

Another question students may have is when is it best to use credit?

“If you eat it, wear it, or drink it, don’t borrow for it,” Oftedahl said.

The best way to find out if a change to the current money situation is imminent is to record all forms of income that are received, then subtract the expenses from what is earned.

Edamerica, a student loan corporation, recommends students write out a simple budget to show where they are at with all their expenses. It suggests recording all monthly earnings and monthly expenses such as bills to be paid, as well as personal expenses like clothes and entertainment.

This budget plan states that students should try to save at least 10 percent of their monthly earnings.

“When creating a budget, estimate income low and debt high,” Oftedahl said.

Some expenses students may plan to budget for are food, clothing, gas and housing.  Expenses vary from student to student and may differ from
those living on campus to those living off campus.

Students on campus have their budget pre-determined, where commuters have bills that vary from month to month. Betsy Van Dyke, a senior who lives off-campus, said at first, she had a hard time budgeting and quickly learned that it is a necessity.

“I started writing down my monthly expenses. I took old receipts and took guesses of how much a month I would spend on food, gas, rent and extra activities. Once I had these estimates, I took the total amount of financial aid and divided it by how many months it had to last. That’s how I budget.”

Other ways to help students budget their money are to not eat out so much and to cook their own food. Students can cut down on spending by walking instead of driving or staying in and watching a movie instead of a night out on the town.

There are many answers to the question of proper budgeting and how to use credit.

Students can find more information on creating a budgeting plan and credit information at the Financial Assistance Office.

Students living in on-campus housing may have an easier time budgeting money because they pre-pay for room and board as it is worked into their tuition. This means if students living in the dorms work, as well as attend classes, that money is theirs to dispose of as they see fit.

“Student fee rates will increase for the 2007-08 school year,“ Director of Residential Life, Terry Willson said.

Those students planning on living in a double room will pay $2,974, $3,960 for a single and $3,960 for a suite.

Students must also purchase a meal plan if they are residing in the dorms. Dining services offers seven different meal plans that fit with every student’s individual needs.

The Take 5 meal plan will cost $1,880, the Any 10 meal plan costs $1,940, the Flex 10 Meal Plan costs $2,184, the Any 14 meal plan costs $1,950, the Flex 14 meal plan $2,290, the Flex 19 meal plan costs $1,990 and Flex 19 meal plan costs $2,390.

“I have lived in the dorms for three years, and I hope to move into South Fork Suites next year,” said junior Mike Leon, who resides in May Hall. “ … it is far cheaper than living off-campus.”

Senior Barbara Bright lives in the Campus View apartments on Cascade Avenue.

“I have lived in Campus View housing since I transferred here and, though it is a bit more than living in the dorms, it is worth it … I need my space.”

Living off campus means students have much more to consider when it comes to expenses and budgeting.

Senior Jennifer Krause said it is tough from month to month to figure out how much she is earning and spending. For her, it seems more goes out than comes in, but she admits student loans have been a big help.

UW-River Falls students, upon approval, are allowed to take up to $12,000 a year in student loan money.

Those who are on their own may not know what to do with that much money, and it runs out before the end of the semester.

“I receive financial aid at the beginning of every semester,” Van Dyke said. “The first semester I spent all of it and had nothing when I was only half way through. I knew that I would have no choice but to learn how to budget.”