2008 Woodie Awards
Credit cards and learning to budget
Anna Robledo
Issue date: 9/26/07 Section: Features
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Sweater at Abercrombie, $80; rent, $630; biology book, $160; a quick burger and fries, $9; paying for it all on your credit card, disastrous.
Vicki Brown, Kern Schools Federal Credit Union Branch Manager, said that many college students abuse their credit cards by using them to buy everyday items instead of using a monthly budget to prepare for those common costs.
According to author Janet Bodnar in her book "Mom, Can I have That?: Dr. Tightwad Answers Your Kids' Questions About Money," there are three stupid college tricks.
The first is treating the gang, which is when you are out to dinner with friends and you pick up the tab and collect cash from everybody else. Instead of using the cash to pay off the credit card bill you spend it.
The second is digging a hole, where you rack up a big balance and then make only the minimum payment, which makes it nearly impossible to ever get out of debt. The third is letting things slide, like not making the monthly payment on time, which can stay on the credit report for years.
Instead of using a credit card that will accrue finance charges, Brown suggests depositing money, making a budget and using a Visa Check Card. According to Brown, "When you open a checking account you are given a check card and you can use it anywhere." Brown said that it is also a great tool for learning how to budget.
According to a pamphlet that can be found at Kern Schools Federal Credit Union, "Budgeting doesn't mean having less; it means doing more with what you have." They said that the first step in creating a budget is to not have any surprises. They suggest using your share draft register, checkbook and current bills to help jog your memory on what you spend your money on. They said to "include an entertainment category - fun and luxuries. If your plan doesn't make room for fun, you'll soon abandon it."
They also suggest analyzing your expenses by gaining some perspective on the smaller purchases that you make. "Say you spend $1 each day to buy two cans of soda at work [or school], that's $5 a week, $250 a year." If you seem to be spending too much money on food, they suggest you ask yourself how much food you waste, and perhaps try planning menus and then making shopping lists.
Vicki Brown, Kern Schools Federal Credit Union Branch Manager, said that many college students abuse their credit cards by using them to buy everyday items instead of using a monthly budget to prepare for those common costs.
According to author Janet Bodnar in her book "Mom, Can I have That?: Dr. Tightwad Answers Your Kids' Questions About Money," there are three stupid college tricks.
The first is treating the gang, which is when you are out to dinner with friends and you pick up the tab and collect cash from everybody else. Instead of using the cash to pay off the credit card bill you spend it.
The second is digging a hole, where you rack up a big balance and then make only the minimum payment, which makes it nearly impossible to ever get out of debt. The third is letting things slide, like not making the monthly payment on time, which can stay on the credit report for years.
Instead of using a credit card that will accrue finance charges, Brown suggests depositing money, making a budget and using a Visa Check Card. According to Brown, "When you open a checking account you are given a check card and you can use it anywhere." Brown said that it is also a great tool for learning how to budget.
According to a pamphlet that can be found at Kern Schools Federal Credit Union, "Budgeting doesn't mean having less; it means doing more with what you have." They said that the first step in creating a budget is to not have any surprises. They suggest using your share draft register, checkbook and current bills to help jog your memory on what you spend your money on. They said to "include an entertainment category - fun and luxuries. If your plan doesn't make room for fun, you'll soon abandon it."
They also suggest analyzing your expenses by gaining some perspective on the smaller purchases that you make. "Say you spend $1 each day to buy two cans of soda at work [or school], that's $5 a week, $250 a year." If you seem to be spending too much money on food, they suggest you ask yourself how much food you waste, and perhaps try planning menus and then making shopping lists.
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