Students are living on their own, some having no assistance from parents, and that can prove to be difficult in the money department. But saving and spending doesn’t have to be such a catch-22.
Rilee Lockhart | ART DIRECTOR
Rita Mansour, senior managing director of Mansour Wealth Management, knows all about helping people with their finances. She helps her clients invest their money, take a look at how to use debt responsibly and, overall, helps people attain their life goals. She sees firsthand how people can be irresponsible with their money.
“Most people start with this disposition of never being able to attain enough,” Mansour said. “So they figure the little they have isn’t going to make a difference and end up spending it all.”
Mansour knows it can be tricky for her adult clients, let alone college students who are living on their own for the first time.
“College kids are very transactional, so they don’t typically have an understanding of the duration of time that it takes to save money,” Mansour said.
Going to college can prove to be a difficult life transition. Students are gaining freedom but sometimes don’t understand how to use those freedoms and become overzealous. According to Mansour, the most important aspect of a paycheck is the money saved from it, not the money used for spending.
Mansour’s rule of thumb is having six months of emergency money set aside. If someone makes $1,000 a month from working, the savings money should add up to $6,000. Anything above someone’s monthly spending should be put into an account that’s different than a day-to-day checking account.
The idea of spending more than saving can be seen as a generational issue. Some college students aren’t always looking at the big picture but instead seek immediate gratification. With a lot of the online banking apps out there today, it’s extremely easy to have immediate access to money,l and can prove to be harmful when it comes to spending.
“The baby boomers had to work hard and save a lot, and they wanted their kids to have more than they did,” Mansour said. “So they’ve allowed them a sense of ease, not on purpose to make their kids lazy or anything, but they wanted to make sure that this generation didn’t have to struggle the way they did.”
Though there are good aspects to baby boomers providing their children with ease, there are also bad aspects because the parents continued to maintain control over the money and simply dole it out instead of teaching their kids how to manage their finances themselves.
Tori Critchley, a senior studying art education, struggled with acclimating herself to the trials of spending and saving in college and found that it hit the hardest with her sorority, Delta Zeta, and food.
“I have been really fortunate to have my parents pay for my sorority while I have been in college, but it is a big investment,” Critchley said. “I blew my money on sorority t-shirts freshman year because I was so excited to be in DZ. Now I’ve realized that it’s kind of pointless because I sold about half of the stuff I had.”
“The earlier that you start to focus on finances, the more you can benefit. Time is on your side.”-Rita Mansour, senior managing director of Mansour Wealth Management
Critchley quickly discovered she’d have to be money cautious and created a system to help herself in terms of saving money.
“I ask myself, ‘Do I really need that, or do I just want that?’” Critchley said. “It’s something simple, but it has worked a lot because my job at school barely pays anything, so I have to budget my spending money and decide what’s worth using my money for.”
Mansour also has three strategies that she preaches to help clients be smart with their money. She thinks reading about personal finance, investing and establishing a positive credit score are three of the most helpful tips anyone can have when it comes to saving money.
“I think it’s important that kids invest early,” Mansour said. “The earlier that you start to focus on finances, the more you can benefit. Time is on your side.”
After going through three years of college and learning the ups and downs of saving and spending, if Critchley could give anyone advice, it would be to just look at the big picture, and always be mindful.
“I think taking a step back and letting college stink in a little bit is really important,” Critchley said. “It’s super exciting and you will want to buy and experience everything, but once you get comfortable with where you are, you are going to realize that you didn’t really need to buy those things.”