The Office of Student Financial Aid hosted a budget seminar on Oct. 30, giving students tips to better manage their money.
Alicia Keaton, associate director of OSFA, said students and parents have been saying they are not prepared for college finances.
“The university is very concerned,” Keaton said.
Flora Boles, departmental specialist for the Michigan Guarantee Agency of the State Department of Treasury, said in a single day, college students may purchase coffee, lunch and a snack.
“The average person spends money three times a day,” Boles said.
Boles said some students visit fast food restaurants or pop machines daily. She said these students do not realize how much money they’re spending.
Senior Fadumo Abdi, a laboratory science major, said she is not very good with her money.
“I drink a pop-a-day, at the end of the year that’s going to be more than $365,” Abdi said.
There are three shopping styles: frugal, moderate and elaborate. Boles said students should use frugal shopping to spend less money for products.
A frugal shopper would have a prepaid phone, a moderate shopper would be on a family plan and an elaborate shopper would have their own phone.
To prevent surprise problems, Boles said students should “pay themselves first”, keeping at least 5 percent of refund or paychecks is a savings account for unexpected costs. The remainder of checks should be kept in a checking account, primarily to pay bills.
Al Hermsen, director of OSFA, said budgeting is not about the numbers.
“If you can’t budget $100, you can’t budget $1000,” Hermsen said.
Using real-life scenarios, students were given make-believe spreadsheets to budget different financial situations. Calculations were based on residency, student status and refund checks issued by OSFA.
Generally, students living on campus pay for housing, electricity and Internet together; off-campus students pay expenses separately.
Some students were left with nothing, after spending money on bills and unexpected costs.
In additional to bills, college students 18 or older, on average have two credit cards, Boles said.
Students were concerned about themselves.
“Everybody wanted a personal experience and they didn’t provide that,” Abdi said. “The only way to keep a balanced budget is to use a sheet like they gave us and follow it.”
Students are blowing off refund checks as soon as they get them.
Boles said to divide refund checks in four, the number of months in a semester. OSFA already does the first division between fall and winter semesters to help students budget themselves.
Hermsen said some people want all their money at once.
Keaton said students will have to struggle during their college life and the seminar provided students with a blueprint of what expenses to cut.
“You may leave here broke, but you will leave here wiser,” Keaton said.
After completing the seminar, senior Cole Smith won a $1000 scholarship in a raffle drawing.
OSFA is hoping to launch CashCourse, a budgeting tools program on their Web site in late November. Students can plug in their real expenses to uniquely figure out a budget.
To further educate students about finances, OSFA will hold similar seminars in November and January.
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