Paper or Plastic? What to consider about paying for the little things.
Let’s start at the beginning. You’re entering school, and find out that maybe financial aid doesn’t fully cover all your expenses, like books, supplies, maybe a meal or two a week that goes under the radar. You think to yourself… “well ok, maybe I’ll get a credit card — I mean I have to start building my credit history up anyway, right?”
This is an extremely common scenario among new and even existing students. According to the Washington Post, in 2010, it is estimated that students will spend anywhere between $700 to $1,110 annually on textbooks. This does not factor in living costs (room and board, or rent and utilities if in an apartment), things like your cell phone plan, and other incidentals that hindsight never sees ahead of time.
Therefore, having a plan for paying for these types of things is absolutely essential and rewarding. Today, there are a lot of different options.. and I’ll go over some of them with you to help figure out which of them, or combination of a few works best.
Controversial, but very useful. In the current world and economy, a good credit history is an invaluable tool for everything from getting a great apartment to potentially a job (yes, some actually do credit checks), among other things. A favorable credit score is a very clear indicator of your ability to plan and be responsible for your finances, and that translates very clearly into the workplace and beyond.
So what’s with the stigma attached to our little plastic wallet buddies? Well, for starters… if you charge things you can’t afford to pay off in a reasonable amount of time, you’ll run up a large bill. One way of putting an artificial ceiling on your spending and preventing this is to set an intentionally low credit limit. If you don’t make a lot of money on a monthly basis… set it around $300, and that way you’ll never owe more in minimum payments than you can afford to pay.
2. Scholarships
Scholarships are definitely a favorite among students, basically because they’re free money. There are tons of opportunities on the Internet to apply and be eligible for scholarships. One such example is a service like ScholarshipPoints. They have drawings every month up to $10,000 and the only thing you need to do is register and participate in their earnings activities. Some examples of these can be anything from reading a blog post like this, to following someone on Twitter, or taking a student survey online. Very simple, pretty easy, and really rewarding.
Another option to finance student life is a private (or alternative) loan. Students can borrow as little as $500 up to the full cost of attendance, but are subject to interest based on the lender and prime interest rate. The benefit of this type of borrowing is that it eliminates stress in the short term so that you can concentrate on school work, etc. and have a full six months after graduation before you need to worry about paying it back. Many students (including myself) tend to choose this route just because it is easy and you don’t have to worry about putting a dime down on what is owed until after you are done with school. You can find more information about this type of lending at PrivateStudentLoans.
The perfect answer to this question would probably be to use all three methods. Each have their own unique strengths, though obviously scholarships are the preferred way to go if you can win enough of them to cover your costs. Also, federal work study and on-campus jobs can also be good ways to earn pocket money if you have time to devote to working outside of classes. The bottom line is just to make sure you have a plan, and structuring your finances will be much easier once you have an idea where your money is coming from.
ScholarshipPoints Code: PAPERPLASTIC
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very informational
great!!
I want to believe scholarships will pay my way thru college, but it was nice learning about alternatives.
very interesting
This is really helpful info.
Credit cards are not a good way to go today. Hope for the scholarships and look for low interest school loans.
I was thinking that, but wasn’t sure if i should be. I’m glad that confirms what I was thinking.
It’s a very good information. I believe that credit card is good only if you have it with a bank account. I prefer number two, which is scholarship.
Cash is alway the better route to go. When I was in college it never seemed to fail that the student lounge was always set up with tables with T-shirts, water bottles, key chains, caps etc. and these people were from financial institutes that were targeting young students and getting them to sign up for credit cards. If you told them that you had no job they would use your tuition aid figure as income and it never failed that you would get the credit card. Being in college and young and armed with a credit card generally with a high interest rate is bad because when you are not working and your parents don't send you money as often as you would like having this little plastic wonder is wonderful, until later you find out that you have to actually pay for the things you bought with this little plastic wonder.
WOW SO MANY THINGS I DIDNT KNOW
Great info
I think that it's so much safer for students to use cash rather than a card. It's not that we are all irresponsible, but we need things, and sometimes quickly, and We don't always think about exactly how much we are leaving in the bank when we throw down plastic. Cash seems much more real when you're handing it over, which makes frivilous spending less likely, and your always having to withdraw the money first, so you keep updated on your bank balance. Plus I just hate thinking that people may assume that I'm using "daddy's plastic" because I work very hard for my own money.
recycle, reuse, reduce!!!
Information is power. Thank you this opens up new doors for me.
great info
i love it all
helpful info
very helpful
learned alot
I appriciate all the information that is in here it will help me with my college my life in the future.
Very true and useful information
very helpful information
That is very good to know.
SURE
That what i been thinking about scholarships and aid loans.