The rent is due. The credit card bills are piling up. The car payment is late.
It's a stressful situation when San Diego State students have to find a way to pay their bills each month and not get caught up in debt.
Recognizing this problem, Delta Sigma Phi, SDSU's coed professional business fraternity, co-hosted a speaker series with the San Diego Chapter of the Financial Planning Association titled "Money in Your Future" on Monday at Casa Real in Aztec Center.
All speakers said saving money is the key to avoiding debt.
The average personal savings rate in America is negative, according to the U.S. Department of Commerce's Bureau of Economic Analysis. This is because people don't know they can save money, said Patti Wooten Swanson, director of San Diego Saves, a local social marketing campaign that encourages building wealth and not debt.
Swanson, who is also a financial educator for the University of California's Cooperative Extension, said to successfully save money, people should first set a savings goal, such as money for textbooks next semester, and contribute to that goal.
"You need to tell yourself when you are going to start saving," she said. "Small amounts over time make a big difference."
Swanson said she recommends starting a savings account and contributing about $10 each month because college students' budgets are not very flexible.
In order to get out of debt, she said people should stop borrowing and "spend less than you make, pay yourself first and make it easy to save."
These financial habits require basic money management skills, said Jeanne Renner, a financial consultant and founder of Making Ends Meet Family Financial Counseling.
Renner said these habits can start once a person has an income source, checking and savings accounts, a spending plan, good credit and goals.
"You need to cut out unnecessary spending (by) putting credit cards and ATMs away and out of reach," Renner said. "Change habits and become more aware. Don't buy lunches on a regular basis. Postpone purchases. Is it a want or a need?"
Many times, impulsive spending habits can get students in trouble.
Ken O'Key, founder and executive director of the Financial Literacy Foundation, said simply, "If you can't afford it, don't buy it!"
He explained how credit cards, also known as convenience cards, can come with negative consequences on your credit because people are essentially borrowing money.
"Not paying on time or running up on high interest rates can ruin your life," he said to students. "You only have one chance to get it right."
He advised students not to own more than two credit cards during college and graduate school because the misuse of credit cards lowers credit scores and, consequently, causes difficulty securing apartment leases, earning financial aid awards and maintaining lower auto insurance premiums.
Once students acquire the basic management skills, they can focus on managing their investments, he said.
"You want your money to be working for you, rather than you working for your money," said Scott Monroe, vice president of Sales for TD Ameritrade Institutional, a national active trading and investment firm.
Monroe said graduating students have to learn how to save and educate themselves on investments by opening a 401(k) account, a common type of retirement plan.
Another major investment is a home because of its benefits, which include tax write-offs, equity and privacy, he said
Be the first to comment on this article!