Student Loans and the Student Life: Don’t Mix Them Up!

University is an exciting time for students, be they fresh out of high school or mature students returning to the classroom, and it brings about many exciting changes, surprises, and lifestyle adjustments. The most obvious change for most is a simple change of color: their bank balance transforms from a rather dull black to a deep and luxurious red. Ahh yes, debt, something that every student will eventually have.

Looking into your bank balance and seeing an available “XX,XXX” may make it seem as if you’re rich, but if that money has come from student loans you should always have the “prick” in the back of your head: that money, plus applicable interest, needs to be paid back eventually. While it is quite tempting to start living the high life you should always keep in mind that your student loans are there to make your immediate life (ie- university) affordable, plausible, and a little bit easier.

So, with all of that in mind, here are a few ways to enjoy university without blowing all of your student loan money:

1. Set a strict monthly budget for yourself – Many people find success with two distinct accounts: one which contains the bulk of their student loan, and another that they use to draw from on a day to day basis. Sit down and determine how much it costs you to live every month (be sure to include a bit for entertainment/ordering in/whatever), and then transfer that amount from your student loan account to your daily account.

This amount should include everything that your student loan was designed to cover (assuming you took out a student loan for more than just your tuition). Once that amount is in your regular bank account, see your student loan account as funds that are not available.

2. Avoid impulse buys – I’m quite guilty of this one (much to my girlfriends chagrin), so learn from my mistakes! Impulse shopping for big ticket items is a huge mistake if you use your student loan money to do it. A few nights ago I walked into a Best Buy and walked out with a 46” Samsung HDTV (totaling $1,300)- the only reason that I’m not kicking myself today is because I had the good sense to use my savings account to buy it instead of my student loan.

3. Only buy what you need – If you moved into a dorm or an apartment for university the chances are pretty good that you’ll also be moving out once you’re done. What’s the point of buying that massive TV or home theater setup if you’re just going to have to sell it (or find a way to ship it) once you’re done? Save the fancy stuff for once you’ve graduated and stick to the basics.

4. Spend time with your friends – It’s great to have a nice apartment or a really funky bedroom, but at the end of the day you’ll find that spending time with new friends and colleagues is much for entertaining (and cost effective) than any computer, TV, or pet cat.

Did you find this article helpful? If so, send a few bucks my way (I’m still trying to pay off that darned TV). Heh, just joking, but on a serious level: don’t make the same stupid mistake that I did.