How many times have you heard a colleague say, “I’m definitely not in this field for the money”? While it’s true that being a new professional in Student Affairs may not be the most lucrative career choice, you can definitely make your paycheck last longer by paying attention to your monthly budget! For this blog, I enlisted the help of 215 colleagues across the country to give one piece of advice to new professionals about managing their finances. (You can access the full results of the poll by following this link.) As with all advice columns, your situation may not match up with the advice given. Take what resonates with you, and leave the rest.
Creating a Budget
The first, and perhaps most important, thing you can do towards better financial security is to create a personal budget. How much do you normally spend per month? Be real with yourself. An easy way to obtain this information is to look at your last debit and/or credit card statement. Adding up categories such as food, gas, clothes, etc. will help you see where you are spending the most money. From there you can decide what is essential to get by every month, as well as what can be reduced or modified.
Follow this link to view the budget excel I use every month.
Student Loans
Many new professionals don’t realize that working at a college or university qualifies as a public service job, and therefore qualify to participate in the Public Service Loan Forgiveness Program (PSLFP). Through this program, qualifying individuals would make 120 of their lowest possible monthly payments. This is roughly 10 years of payments. After this period of time, the remaining balance will be forgiven. So let’s say I have $50,000 in student loans, and my payments are $250 through the income contingent payment plan. I would end up paying $30,000, with $20,000 forgiven.
Here are some tips if you feel like this may be an option for you:
- Make sure to fill out a verification form found on the PSLFP website. This form will need to be submitted to the HR department at your institution. You have to fill out a new one every time you change institutions.
- Save a copy of each of your monthly pay stubs.
- You can defer payments and still remain eligible for the program. (It will just take longer for you to qualify for forgiveness.)
- Only government loans qualify
- Use this website to contact someone regarding PSLFP or find answers to Frequently Asked Questions
Credit Cards
Many peers will tell you to avoid credit cards, but, this is one area in which I would have to disagree, particularly if you accept a “live-on” position. Often, new professionals are in a position where they are starting to build credit. One way to do this is to appropriately manage a credit card. Other ways to build credit include car payments, rent/mortgage payments, etc. If you choose to open a line of credit, make sure that you that you are able to pay the credit card off every month. I would also advise that you get a credit card with a rewards system, such as cash back or flight credits. For example, I use an Amazon.com Rewards card through Visa. For every dollar I spent, I receive one point, or more depending on certain purchases, which equates to a penny per point. At the end of the month, I can use my points to pay towards my credit balance, or redeem them on Amazon.com. If I spend $1,000 per month, I would receive $120 per year on rewards! Remember, the trick is to pay off most of the card each month so that you are not paying interest.
On the other hand, if you have found yourself already in debt via credit cards, it is highly important that you get these cards paid off as soon as possible. Carrying large balances on your credit cards can hurt your credit, and you end up paying unnecessarily large amounts of interest. If you’re in this situation, consider calling your credit company to negotiate a lower interest rate. You can also obtain a free copy of your credit report once per year.
Resources and Tips
Below, I have bullet pointed some resources and tips that may be useful in finding your own way of managing your finances:
- Consult a Financial Counselor. Many institutions offer free consultations with a financial counselor. They are particularly helpful in obtaining advice about retirement, savings, and investments.
- Are a techie? Use an app such as ‘Mint’ to help you budget.
- Reach out to your Human Resources department. Often, HR will have special employee programs meant to educate about topics such as personal budgeting and retirement
- Work with your students to put on a program about personal finance. I learned a great deal of information when one of the RA’s I supervised collaborated with the business department to put on a personal finance workshop.
- Your employee ID will often grant you the same student discounts at local businesses such as movie theaters, or just hang on to your current student ID! Institutions also tend to have a list of local venues that offer student discounts.
- Keep a jar to put spare change, and don’t touch it! Use it to contribute to your retirement savings or help pay down any debt you owe. You’d be surprised how much change you accumulate in a year!
- Because we all love listacles: http://www.lifehack.org/articles/money/50-quick-easy-ways-save-money.html
Jason Lynch is a first year doctoral student at Old Dominion University focusing on higher education policy and first generation student access and support. He is an alumnus of the NCSU program, graduating in 2011 and has worked in Residence Life, Fraternity & Sorority Life, and Multicultural Student Affairs. You can contact him by email at rjl5883@gmail.com.