Western Oregon Journal

With fall term well underway, some college students are already feeling the financial crunch. For most first-time college students, and even for the veterans, managing finances responsibly is a difficult task.

Most students feel they have a sufficient amount of money saved (i.e. student loans, financial aid, savings and contributions from Mom and Dad) to make it through the year, but after four nights of ordering pizza, making car payments, splurging on a pair of jeans, paying for gas, joining friends at the movies and buying textbooks, it's apparent that money goes fast.

For most college students, this is an all-too-common scenario, and, unfortunately, many turn to the world of credit cards. That's where the statistics turn scary. According to a 2000 Nellie Mae report, 95 percent of Nellie Mae graduate-student loan applicants had at least one credit card with an average balance of $4,776. Most students enter into the credit world with little or no knowledge of how credit cards work or how to resist the "instant gratification" world they represent.

OSU Federal, Your Community Credit Union and Polk County Regional Manager Peggy Mehl and Director of Community Education Claudine Oriani offered these tips to students when dealing with credit cards, budgeting finances, defining financial goals and managing checking and savings accounts.

1. Ask yourself if it is a need or want. Sit down and write out a personal inventory on things that are needs and wants, needs being things that are necessary to live and wants being everything else that we might like to have but don't need to survive. Separating needs from wants helps us control our spending.

2. Follow the three-day rule. If there is something you really want, ask yourself if you can wait three days, and if you can, you will more than likely forget about it within three days and not end up buying it.

3. Pay yourself first. Each month have a specific dollar amount transferred from your checking account to your savings account. If the money is not in your checking account you will be less likely to spend it.

4. Avoid the urge to get a credit card by "Opting Out." Opting Out is a request made by phone or via the Internet that will free you from receiving credit offers in the mail. For more information on "Opting Out," visit the Federal Trade Commission website (www.ftc.gov).

5. Read the fine print. A zero-percent introductory rate does not mean forever. The key to making a smart choice when choosing a credit card is to check out the Schumer Box. The Schumer Box is a disclosure chart that, by law, must be included in every credit card solicitation. This chart will help you take into consideration annual fees, annual percentage rates (APR), grace periods, how credit companies calculate your balance with interest rates, bonus programs and fees (i.e. late payments, over-the-limit charges, cash-advance charges and transaction fees).

6. Think long term. Bad choices with credit spending now will still haunt you seven to 10 years down the road. A bad credit report can affect whether potential employers hire you, how high your car insurance payments will be and your future ability to apply for loans.

If you do find yourself in over your head, there are various options to get you back under control. These options include refining your wants and needs list, meeting with a financial adviser, calculating hidden costs and being proactive in letting creditors know if you are having trouble making payments. More often than not, creditors will be willing to work with you if you are having difficulty meeting your payment deadlines or amounts.

If investing is in your future, talk to a financial adviser who can help you diversify your portfolio. If you're going to invest, make sure you are going to be in it for the long run. Oriani notes that the tip to investing is "not about timing; it is about the time you spend in the market."

For more information about managing your finances, talk to a financial adviser at your banking institution or visit the OSU Federal Community Credit Union website (www.osufederal.com).

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