College Spending Tips

Meghan Crider, President, Educational Programs and the Finance Career and Leadership Academy program instructor at Virginia National Bank has some real-world money tips for college students heading back to school. How to organize the money you have and make it stretch. https://www.vnb.com/community/finance-career-leadership-academy

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SPEAKER_01 0:08

Welcome to my Forever Bank Personal Stories with Virginia National Bank. My name is Sherry Taylor. I am a spokesperson for Virginia National Bank. And with me today, Megan Kreider. Megan is the president of educational programs and this amazing finance, career, and leadership academy that uh we'll talk about towards the end of the podcast. But Megan, we're sending our kids back to school right now. It's a big deal. So let's talk spending while you're in college and why it's so different than just everyday spending.

SPEAKER_00 0:41

Well, um, I think it's because it it it it money in college can just feel overwhelming. I mean, you got everything so new happening to you. But you don't have to be perfect with your money to be successful. You just you need a plan. Okay. Um, some awareness and just a few practical habits that help your money last longer while you're in school. One reason why it is because you you you usually don't have money coming in on a regular basis while you're in college.

SPEAKER_01 1:07

It's like you you save up, maybe you save up your money. This is what my we we told our son. He worked for a year before he went to college. And so we said, okay. Yeah, the gap year. And he's i I said, Okay, that's fine. We can take the gap year, but you're gonna work and you're gonna save all of that money, most of it. Most of it. Most of it um for your spending while you're at school. Right. And so we talked about it, we set up a plan, and you know, we talked about monthly budget and things like that. Good. Yeah, and these are things that I feel like just with my son, and that was hard enough. Like it was still very tight. Even though we went through the plan, it was still very tight. And there were times where he had to say, Oh, you know, that's a good thing can I use the credit card or whatever it is, you know, for this or that.

SPEAKER_00 1:52

Well, he had that lump of money that he had made over his his summer vacation. Yes. And that was a lump that was at the beginning of the year. Right. Okay. Yes. And the hard thing for for for your kids in school to do is just realize what they have to do is to make that money untouchable. You know, basically I need to s spread that over, let's say that you're in school for nine months. It has to last you for nine months. Right. So you divide that money by nine and say, I can't touch anything over what one ninth of that money is per month. Not thinking that, oh, I have that in the background, I can just borrow a little from, you know, October to get me through September. No.

SPEAKER_01 2:28

Yes. And that uh that becomes a slippery slope. Right. And then you're borrowing from every month, and then by the end of the year you have no money. You have two months at the end of the year that you don't have any money for. Exactly. So and I think probably there are a lot of things you don't think about that you're gonna need. I mean, this might be your first time living on your own. Right. So what the things that you had at home that you just take for granted, you don't think about. Right. And we probably didn't think about it either, to be honest. Yeah.

SPEAKER_00 2:52

I'm saying I'm one of those people that is so military brought up and anal retentive about those things that yes, I had everything like stracked up, but most people do not.

SPEAKER_01 3:01

Correct.

SPEAKER_00 3:02

So the first thing I think before we think about where your money is gonna go, is think about is make a list of where your money's coming from first. Oh so first of all, what funds do you have? So you have to look at and plot out and think about, okay, I have the three months from school, okay, from from working the vacation, I guess, for school, okay. And then you sit there and go, if you you're getting some money, are you getting an allowance from your parents? And how is that coming to you? Right. If they say they're gonna give you a you know, a lump sum the beginning of the semester or next in the second semester, then you write that out. Here's where the funds are coming from. If you've got student aid coming, right? And usually that comes at the beginning of the semester also, and it has to last you through the entire semester. So sit down and look at where all that income is coming from first. And some people have, like I did, work study programs. So you had a part-time job with you. So plot out, write down when it's coming in and how much it is for your income. Okay? Okay. And then start looking at where it has to go out for. Um so if you're saying, well, let's not do first year, let's do second, third, and fourth year when you're living off campus, okay? Well, you know, right first and foremost, that biggest chunk that out of anybody's, even a grown adult with kids and things like that, the biggest thing that comes out is usually your rent or you know, your mortgage. So you need to plot out every month this is what has to keep a roof over my head. Okay. Then you think about, well, what are those uh needs, the necessities you need? Okay, roof over your head first, and food. Food should be groceries. Not necessarily eating out, yeah. Yeah. Right. If you know, if you've got a large enough income coming in and you can afford that, then you just write down everything that you usually you think you're gonna plot out for that. Now, mind you, if you don't, which most kids and most people don't have, you look at groceries. Okay? And then you look at your you gotta remember things like um the toiletries, okay? Shampoo, deodorant, toothpaste, a toothbrush. Um those are things that usually just show up at your house when you're home. Well, because your mom got it. Because your parents do that for you. Yes. It's always been there, it always will be. Right. Well, no, you have to consider the fact that you do that. And mind you, yes, you do have to replace your toothbrush every once in a while. Uh buy two. Yeah, you buy two. One for each semester. Yeah. Um the things, you know, just write down all the things you use on a daily basis, okay? Like your perfume if you're gonna do it. You can do without it, but if you want it, you better count it in as what you think is a necessity to budget for it. You've got your subscriptions that you've got, your online subscriptions for streaming, for gaming, for and to me, those just you write them down to find out what you're doing, because you're gonna probably have to eliminate some of those to be able to stay within your budget. Yes. That income you've got over there, you're lucky if you come out with a fact that we hope to come out with is all that money you have coming in ends up being more than what you think you're gonna have going out. And you're also gonna want to put in there an emergency fund of what happens if, you know, a backup, you know, a buffer for yourself. Let's put that in there. Not use mommy and daddy or a credit card as as a buffer. Uh that would this would be the adult thing to do.

SPEAKER_01 6:15

And I know there was one thing that we had to think about too, is usually if you do ha say have a a dining hall voucher, right? That's usually going to get you 15 meals a week, or depending on which one you signed up for or which one you get. Yeah. That's right. Right. So may say you get the 15, and then if you do the math there and you think, fifteen meals. I eat more than 15 times a week, right? I mean, that's three you still have weekends. Um, so you have to think about, right? It's three a day, three meals a day. Times seven. Yeah, times seven. Yeah. So that's that's more than fifteen, but you you think, oh, fifteen meals a week, oh, that's enough. Well, yeah. It's not gonna be enough.

SPEAKER_00 6:54

You're gonna have to. Depending on what meal plan you have. And if you're living on campus. Right. Meal plan only goes for uh uh UVA required for your freshman year. Yeah. You know, after that. And and and for your up you when you look at you know upperclassmen, it's hard to get to live on campus. Right. Okay. Right. Um so you're living off a campus, and then it becomes the idea it's easier for you just to use your little card and walk into the the dining hall and not worry about food. But when you're living off campus, then you actually have to think about buying groceries and preparing your own meals. And I don't even want to go into the health thing. Well, yeah, that's a whole other thing. Yes, you can eat a healthy diet for cheaper than eating frozen meals all the time. But we're that's not what we're here to talk about. Right. But it's a lot cheaper to go to the grocery store and buy your food there than it is to order off a food service, you know, a delivery service and fast food. Um so your need is that you need to eat and you budget it for the healthiest you possibly can at the lowest cost, which means going to the grocery stores. Anything above that is a want. And you can budget that in, but that's extra. You have to have money for it. You have to have money for that, right. And there's sometimes that you forget things that you're gonna need as part of going to school, like all those extra fees that you might forget about that the schools could charge you. Oh, like what? They're activity fees and things like that. Yeah, if you want to be in a club, right. Or you're in the city. Right, that's that. And actually, yeah, they they charge that part of the tuition type of thing. But also then just think about the uh, you know, the the books that you need. And somehow, you know, the books have gotten more expensive for online books you don't even get to keep anymore. I know, isn't that crazy? I know that you can't go back and you know, write in them or anything. Um I mean you can't. Or resell them. Or resell them, yeah. Um they don't even make them available nowadays uh for some courses, uh as we've been going on. But um one of the things I know that people tend to forget about having to have to budget for is that when you're away at college, okay, is that they often forget about travel of getting to and from home to school for Thanksgiving. Right. And the food they're gonna eat on that and the gasoline for that. They're they're not thinking about that. Or the flight. Or the flight, if you're gonna be a flight. That if that's coming out of your budget, not your parents' budget, you have to consider that too to be able to get home. There were times when I was in school where I didn't go home for Thanksgiving. Wow. Because you didn't have the money to go. Because I didn't have the money. Oh boy. And you know, and and then I got smart when I figured out that I couldn't get the train ride from New York to back down to DC. I figured out, hey, there's a way to actually um ride share. Mind you, we put posted it on a bulletin board, you know, with paper in a nineteen.

SPEAKER_01 9:35

Was that in the nineteen hundreds? Yeah, it was like it was in the nineteen hundreds.

SPEAKER_00 9:38

Okay. That's yeah, it was back in the nineteen seventies. So yeah, you know, and then you know, and you did a ride share to be able to go where we shared gas and I didn't have to have the car and then you know, worked it back. But that took a lot more effort. So yes, managing money does take effort, but no one's going to take care of it better than you. You know, yeah. That's just that's just the case here.

SPEAKER_01 9:59

So, okay, that's one way that that students, if you're in college, getting ready to go to college, that's one way you can stretch your money. What are some other ideas for stretching money?

SPEAKER_00 10:08

If you've never done a budget, you have to do a budget. Because you have to know to where your money's going to go and you have to pace yourself for it. Um the other thing too is is to actually make yourself familiar with the financial aid department at your university. I I I I'm just speaking last night to uh a young woman that wor who heads up a group in the financial aid department. Two people reporting to her, and she has 500 students they're responsible for. Whoa. Those three people to help them handle their financial aid packets, and basically there that's the person they go to if they're having trouble with like figuring out what the heck, how am I making my rent this month, you know? Yeah. Well, so they there there is an on staff at you at every university that could help you talk through some of this. The thing is, you have to listen when people tell you. When people tell you you need to budget, you really do need to budget. It it's not like you're s in second grade or seven years old anymore, where that little magic card your parent has, you know, can buy you anything because you know, you have no concept of the fact that there's money, somebody had to work for that money to get it. Yes. You are now working for that money. You uh you worked when you applied the effort for the the um the financial aid, you had to go through that effort to do it. And upon graduation, you are going to have to work to pay that money back.

SPEAKER_01 11:33

Yes, and there's a lot of money to pay back for a lot of people. Yes. I mean, uh so many people have have hundred thousand, hundred and fifty thousand dollars worth uh of debt when they leave college.

SPEAKER_00 11:45

I go into the local high schools here and to their personal finance classes and do a uh presentation on um the cost of college and how you know the return on investments on different uh degrees so they're aware of that not all degrees are worth the money that you're investing in it.

SPEAKER_01 12:02

Yes, very true.

SPEAKER_00 12:03

One of the questions I ask at the beginning of each one time I go and do a presentation is how many kids in that class can pay for college outright? Okay, how many of their par parents or themselves have saved up or have the ability to go in and say, I'm freshman year, I've got my four years paid for. Who in my lifetime doing this going on five years, six years now? One. Oh wow one student. Wow. Okay, one student and that was and and and God bless him, it was because his father passed away and had an insurance policy and had left it for his education. Wow. That that's not the way you want that to happen. Yeah. I I I I I applaud parents who are taking advantage of the education funds uh for their kids right off the front when their birth. That that that is a wonderful thing to do.

SPEAKER_01 12:51

Yes.

SPEAKER_00 12:52

But the there comes a time when uh an 18-year-old has to realize that they are an adult and it's their responsibility, it's their educations, they make need to make the wise decisions. And the government makes it very easy for them to borrow the money. It's not so easy to pay it back. Yes. And they need to think about the fact that upon graduation you are responsible from day one to pay back those uh unsubsidized uh federal student loans. Yeah.

SPEAKER_01 13:18

And and it seems college is a really um big time for students, people, young people to be just kind of thrown into adulthood. And so this is why it's so much more important, I think, to to have a plan. Yes. Yeah, because you there you're gonna be making so many decisions you've never made before. All on your own, yeah. All on your own, without you because your parents aren't always gonna be there. They're not always just gonna be a phone call away or a text away. You're gonna have to make decisions.

SPEAKER_00 13:46

Right.

SPEAKER_01 13:47

And that's a lot. And the more you can have written down and the more you can have structure, and the more you can have, you know, like with your finances, getting them in order.

SPEAKER_00 13:56

Right.

SPEAKER_01 13:56

Um, and kind of having a plan.

SPEAKER_00 13:57

When you're you want to do ideally you want to do d to to start thinking about your finances and all this and how you got budgeting and all this stuff before you commit to a college. Absolutely. That that's idea. Before you sign on the line for those loans. Yes. Okay. Yes. Um But the idea too is once you've done that and you've thought hopefully you've done it, thought through what the degree is that you want to get, and you're doing it not as an emotional, you know, thing, but a logical, with a little bit of emotion in the fact of that you gotta like what you're you want to think you're gonna do for the rest of your life. But not getting it yourself into $100,000 into debt versus something because you you know you're passionate. I and I can talk about this. I have a theater degree. My first degree is a theater degree. Now, I was lucky that I actually made a living at what I did, but of my graduating class, I was it. Yeah. You know, and I went to a school in New York that was highly competitive for theater, okay? So ideally, if you want to be an actor, you don't need a degree, right? Right. Don't need it. Okay. So why invest that money in a theater degree? If you're going to go to school, get a degree, do some research that the return on investment for is that you might actually be able to pay off your student loans when you graduate. Right. Okay. There's a wonderful website out there that can help you look at that return on investment of where your college is and what degree you have. Oh, okay.

SPEAKER_01 15:13

So they can just Google it.

SPEAKER_00 15:14

Yeah, you can just Google it. Um and I as I say I do a presentation on that type of thing for the high schools around here. Um budgeting, and that's not even for anybody in just in college. It's the fact is that's it's your your money. Okay. Nobody cares about your money more than you do. Yeah. Or should. Or should. Yeah. Or should, right? Um so you know the most adult thing you're gonna be doing that is is is to ha actually manage it logically. Because ultimately, you cannot run away from your student loan debt. Right. Okay?

SPEAKER_01 15:45

Yeah. You can't run away from debt in general.

SPEAKER_00 15:48

I mean it's and Oh, I mean, yeah, you can declare bankruptcy, but that's gonna follow you for the rest of your life. That's right.

SPEAKER_01 15:53

So even if you do that, that's still on you. That's still on you. It's gonna prevent you from doing things that you want to do and then you're gonna be able to do that.

SPEAKER_00 15:59

Yeah, you'll be you won't be able to get in a home with if you declare bankruptcy. But even when you declare bankruptcy, that does not forgive your student loans.

SPEAKER_01 16:06

Right. Yeah. So you still have those. You still have those. Yes. Um so it's really important and to kind of take that stress off of you too. I think, you know, so many people are so stressed out over finances. Yes. Because they're not they're they're not taking care of them the way they should. You know, they they don't know and and a lot of people just don't know any better. And then, you know, you start things start piling up and it gets harder. So this takes a lot of stress off of you. College is stressful enough.

SPEAKER_00 16:31

Right. It's the one thing you can really have control over. Yes. And the fact is it takes the stress off when you make that first step. I mean, you don't have to start big. I mean, you can just start like, you know, take out, you know, a sheet of paper or one of your apps, if you want to use your note app type of thing, and just figure out how much money do I have available each month. Okay? Yeah. And based on what you did at the beginning, you know, you looked at where all that income was and you spread it out over the months that you need to have paid off, okay? What are my fixed expenses, okay, that must be paid, like your rent. That's just for anybody in the world. Uh, what flexible spending categories means the most overspend most often? So if my flexible spending category is my gaming, maybe that should be the one thing you do that you next month and try to see that. I'm not going to do that. Or cut it down to the bare minimum type of thing. Or ordering if it's ordering out, say, okay, I can only order out once a week. I've obviously been doing it five times a week, that it's not good. Yes. So uh and what is one upcoming expense I need to start planning for now? Something that's coming out. Like if you want to go home at Christmas and you haven't thought about the fact that you need to book that flight, where am I going to take that money away from? I I can either generate more money by getting a part-time job, babysitting or something like that, if you can do that while you're taking these classes. Um I mean, I was very creative when I was in school. I, you know, I I worked in the costume department sewing, and then uh so that was my I you know, before my first degree, that's one of the way I made my money. Right. Um, so um, but also I found out that some of my professors, you know, had little kids and stuff like that. So then they liked me and it was like, well, if you if you need a babysitter, then that would give me extra money. So I used that money to g take the train into to to uh New York City and go see a show. You know, right. That was definitely a want, not a need. Yes. You know? So that's the same thing. Just think that type of thing through.

SPEAKER_01 18:20

Megan, what's the main takeaway that you want people to to hear?

SPEAKER_00 18:23

Well, I guess it's the fact is that managing money in college is not about saying no to everything, it's about making sure your money goes where you need it to go first and where you wanted to go second. Yeah, stretching your money, like I said, starts with awareness. Planning your spending for the year gives you breathing room and the habits students build you now you can help you make better financial future for you.

SPEAKER_01 18:44

Megan, thank you so much. This has been some really, really good information. Um, if you are are headed to school or even considering it in the next couple of years, go back and listen to this a couple of times. Yeah, that's a good idea. Budget. Tell me about the Finance, Career, and Leadership Academy that Virginia National Bank has, just real quick about how people can learn more about that.

SPEAKER_00 19:05

The Finance, Career and Leadership Academy. You can find out more information by going to our website and it's actually listed on the left-hand side of it and click on it to learn more about it. But it's for high school seniors and juniors. Um, it's an academy uh that teaches uh intensive personal finance and uh career preparedness for the financial world. We take up to ten kids every spring. Uh it goes from January to June. Uh it's in the evenings. Um as I said, it's an intensified uh course on finance, builds on what you've learned or been exposed to in high school. And uh from that class of the ten kids we take, we will take um up to four students uh in this in the fall to come into our college program, which is um they they uh we pay for their entire degree, um, they do the courses here at the bank. Um we have an arrangement set up with a college up in Maine. Um, and then you get a career with Virginia National Bank.

SPEAKER_01 20:03

I i if you make it into this and you make it to the college portion of it, yeah. You get your college paid for for that degree.

SPEAKER_00 20:10

At the same time, you're getting full benefits and a s and a salary. Oh my gosh. So we have two So you're getting paid to go to school. Yes, you're getting paid to go to school. We have two students coming in. Um they will begin in for the first four to six months, all they do under my tutelage, you know, my watch sponsorship mentorship, is they take online courses that we've arranged with this college up in in Maine to get their business degree in banking, uh, business administration and banking. And then at that point, they finish their first about almost two years of courses. Um, they end up doing a special project with our CEO, and then they do rotation rotations through our departments, and we get placed in a job. And then then if they want to, they don't have to, but if they want to, they can continue to get their full degree um while they're doing their job. They're just as long as time as long as they're maintaining and doing a good job with their job and maintaining the grade point average that we require them to maintain, they get to continue to go on for their full degree. And you pay for it. And then we pay for it.

SPEAKER_01 21:08

Title. So And they get full benefits and everything like that. So if you want to know more about that, VNB.com slash FCLA is uh where you can go on our website, vnb.com. Megan Kreider. Uh and Megan, you are the president of educational programs here at Virginia National Bank. You're in charge of the FCLA program. Thank you so much. This has been um really good information.

SPEAKER_00 21:32

You're welcome.