“Live like a student now so you won’t have to later.”
That’s a mantra that Morgan McMillan, assistant director of financial literacy at Indiana University, can get behind.
The point: You are supposed to be sort of poor at this time in your life, since you don’t have a full-time job or a college degree (yet). You’re not supposed to have a nice car, expensive clothes or a credit card. You’re supposed to scrounge change with your friends for pizza, eat Ramen noodles and schlep yourself to class on foot or take the bus.
It’s easy to see other students on campus driving nice cars or enjoying dinners out and assume that’s “normal” college life, McMillan says. But it can be dangerous to succumb to financial peer pressure when you have tuition to pay and, perhaps, student loans to payback six months after graduation.
“One of the biggest challenges is to live your own financial lifestyle instead of that of others,” McMillan says.
It’s one of the many lessons the financial literacy office tries to convey through IU’s MoneySmarts program to assist students to make informed financial management decisions and decrease overall student debt. The goal is to provide students with the personal finance knowledge they need for lifelong financial wellness, McMillan says.
Students can request one-on-one meetings to help them learn money-management skills, or they can attend group workshops. But while the program targets IU students, anyone can access MoneySmarts’ free podcasts and advice blogs at moneysmarts.iu.edu for advice on budgeting, credit cards, debt repayment and tips for saving money.
Positive peer pressure
IU grad and Ohio native Megan Jutte worked for MoneySmarts as a peer mentor. Students were referred to her to get help if they had, for example, applied for emergency financial aid. Sometimes students’ financial problems were beyond their control—a parent lost a job
or was very ill, for example—but sometimes the problem was a lack of budgeting.
Jutte could relate. “As a student paying out-of-state tuition, I did not always have the money to do everything other students could do,” she says.
Students were not required to share their financial information, but Jutte says it was—and is—often helpful to go through expenses and look at ways to save money. Some of her observations:
“Going out during the week is a big one,” Jutte says. She suggests setting a weekly dollar limit for coffee, restaurant meals and drinks.
“Say, ‘I have this much to spend and once it is gone, it’s gone.’”
Instead of bowing to peer pressure, create peer support to save money.
“We would say, ‘Let’s stay in tonight.’ Just having someone else acknowledge they were going through that situation makes everyone realize they are not alone in working through financial issues.”
Jutte worked as a peer mentor for a stipend but also worked shifts in a campus food court, where she could also have a free meal. “I worked every summer, too,” she says.