Watch America's student-loan debt grow $2,726 every second
One way to keep track of your finances and where your money is going is to use free tools like FinAid’s Student Budget Calculator or the one offered by Mint.com.
Saving money in general is not easy, but trying to save while worried about future debt from student loans has some Ball State students feeling stressed out this summer.
Liz Szewczyk, an incoming freshman, is already concerned with money and decision-making before even arriving at Ball State.
“The idea of student debt stresses me out because it makes me feel like I'm on a deadline,” Szewczyk said. “I'm on a deadline to decide what I want to study for my career, find a well-paying job and pay off a loan as soon as possible, ... when in reality I have no idea what I want to do.”
Szewczyk said the thought of needing to decide on what she wants to do with the rest of her life before her loan rates increase is extremely stressful for her.
One way she is combating that stress is saving over summer leading up to her first year of school.
“Right now, I work at a Cold Stone [Creamery] by my house in order to start saving money for school," she said. "I originally thought having a job would be a drag, but it's helped me develop in a lot of ways.”
While working part-time or full-time is the common way for anyone to earn money, Szewczyk said saving can be difficult to do.
“Saving is really hard, especially when you have friends like mine that want to go out every night to eat or go to the movies,” Szewczyk said. “In order to make things easy, I just put a third of my check into my savings and the rest into checking. Centier Bank has the option to round up your checking and put the excess into savings. It seems little, but it adds up if you leave it alone.”
While saving may not be the easiest nor the most fun thing to do this summer, it’s worth it when looking at the statistics.
In 2016, American college students were burdened by student loan debt more than ever with students owing nearly $1.3 trillion in student loan debt, spread out among about 43 million borrowers, according to Student Loan Hero.
The average 2016 graduate has around $37,172 in student loan debt, which is up 6 percent from last year's graduates.
Based on what Szewcyk is feeling and the debt she's anticipating, she said students should already be thinking about their futures in terms of money.
“If you don't think about your finances, who will? It's important for students to start taking a larger responsibility on their financial futures,” Szewczyk said. "It not only teaches you the value of the dollar, but it really puts [your] purchases into perspective.”
Brady Fisher, a junior Chinese and computer science major, is thinking about his financial future, but he doesn’t let the topic stress him out too much.
“Most of my stresses involve my personal life and not finances,” Fisher said. “I shouldn’t have too much student loans to pay back — somewhere between $10,000 and $12,000.”
Fisher is working at a factory job full-time this summer — between 40 to 45 hours per week — to make some extra money.
Although he said he doesn’t put very much of his paycheck into his savings account, Fisher said the most important thing to think about when it comes to money is monitoring your purchases.
“If you want to buy something that isn’t an essential and it won't create a lasting memory or make someone else happy, you should probably save your money instead,” Fisher said.
Srinivasan Sundaram, a Ball State professor of finance, said students have to learn a couple things when it comes to saving over the summer.
“Saving should be a habit. One should not live beyond their means. 'Live now, pay later' will get people into trouble,” Sundaram said. “This summer, students who are working have to learn to put away at least 10 cents off every dollar earned. They must learn to borrow less. No one is entitled to any luxury if you have to borrow to get an education.”
Sundaram said the key to financial success is to be aware of where money is going after it's earned and to cut out bad habits.
“As an example, fast food may be convenient, but Starbucks coffee every day is about $600 per year," Sundaram said.
Students have to think about what it will be like when they are 50, 60, 70 years of age, Sundaram said.
Thinking about the bigger picture, even over the summer, is essential, Fisher said.
“A lot of college students lack experience and foresight in terms of seeing the bigger picture and planning for the future,” Fisher said. “A mature understanding of finance in tandem with the planning ahead is essential to achieve the goals you have in life.”
Stretch your dollar further this summer with the following money-saving tips courtesy of fastweb.com:
1. Buy or rent used textbooks and sell last semester’s books back.
2. Don’t make impulse purchases.
3. Never go grocery shopping when you’re hungry.
4. Limit the number of times you eat out monthly.
5. Cut out vices — smoking and binge drinking are terrible for you and expensive.
6. Always pay bills on time to avoid late fees.
7. If you have a credit card, pay it off as quickly as possible. (It’s good to establish credit, but a bad credit score follows you everywhere.)
8. Walk, use public transportation or ride a bike instead of having a car.
9. Live with others so you can split rent and utilities.
10. Cut out expensive cable packages you don’t need.
11. Consider more basic phone packages and plans or plans that include unlimited texting with free incoming calls.
12. When planning meals, make dinner with friends and split the cost of groceries.
13. Sell what you no longer use or need.
14. Skip expensive summer trips — look into alternatives, like volunteering, instead.
15. Open a savings account that earns interest. Credit unions have fewer fees and are great for students.
16. Don’t buy music. Use the free services like Spotify and Pandora offer.
17. Avoid buying name brand items. Purchase generic items whenever possible. They are exactly the same item at a highly reduced price.
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