How I Graduated Debt Free

Did you know the average college student will graduate with about 30K in debt and will spend the next 10 years paying it off? Crazy, right?

 I’ll be breaking the status quo this upcoming May. Currently, I’m a fifth-year senior at the University of Wisconsin-Eau Claire and pumped for the next chapter of my life but more excited to graduate debt free. I’m on track to graduate with more than $20,000 in savings with over 80% of it being in some sort of investment account.

 I don’t share to brag about my finances, but to show it’s possible to make smart financial decisions while in high school and college to set yourself up to either graduate debt-free or minimize your student loans. I’ve been around a lot of college students during the last five years and a lot of students use going to college the reason they cannot make smart financial choices. Sorry to inform you that college is an investment for your future, but it could be a pretty poor investment in today's society if you rack up tons of unnecessary debt along the way. My hope is that someone will read this and get inspired to take control of their finances and look for ways to improve their finances.

 My first smart financial move was at the bright young age of 13. While I was in 8th grade, I lost my Grandpa due to an unexpected farm accident. There were many lessons to learn from this. One being that life is short and make sure to cherish the time you spend with loved ones. The other being make smart financial decisions in your life and start by saving. Little did any of my family know, my grandpa made some smart financial moves and left an inheritance for all his children and grandchildren. I am extremely grateful he did because he showed that regardless of your economic status you can always save money for the future.

 After having a conversation with my parents and knowing my future plans were college, we set the inheritance aside until I got to college. Looking back, it could’ve been easy to get the newest gadgets or purchase a new car when I turned 16 or 18, especially when I saw my cousins spend the money immediately on new trucks and my classmates were driving newer cars than me. I could’ve fallen in the trap of keeping up with the Joneses. Fast forward to today and I’m thankful to have practiced delayed gratification even though I didn’t truly understand the concept at 13 because it has set me up well financially for after graduation.

 So, how did I navigate through five years of college and still come out in the positive at the end? Well, I hope I can answer that question through the following life decisions I made throughout college.

Know Where Your Money is Going

Create a budget. Budgeting was a foreign concept to me when I entered college. If you were like me, you probably only got one class period on budgeting in high school. Fortunately, my resident assistant had someone speak to us about budgeting freshman year. This is where my interest budgeting and finances started. Granted I'm human and made some mistakes in my budget along the way. Overall, my budget helped me keep and build my savings while going to school. A few recommendations when it comes to budgeting:

• Start by tracking your income and current spending habits 
• Create specific buckets for where you want your money to go and allocate a percent of your income to it
• Find a mentor or financial planner who has created the results you aspire to have

Take Advantage of Tax Credits and Scholarships

Know what you qualify for. A perk of being an accountant is you get to learn about different tax credits you qualify for! But you now know them too. One tax credit you can take as a student is the American Opportunity Tax Credit which allows for a max refund credit of $2,500 for attending college. Please advise a tax professional if you have any questions on the American Tax Credit or any other credits you may qualify for. Another way to cut tuition during college is applying for scholarships. The largest scholarship I received was $2,500, which paid for half of my tuition for one semester. There are plenty of scholarships for you to apply to cut your tuition costs. Don’t be afraid to apply either, most scholarships actually never get rewarded because people don’t apply. Plus, any amount will help with the cost of school nowadays.

Find A Source Of Income While Attending College

Use your free time wisely. Starting my sophomore year of college, I started working part-time during college. I made a decision to give up some nights out with friends to save and make smart financial moves for my future. I typically made an extra $5,000- $7,000 between both semesters by working part-time on campus. This covered my variable expenses, like groceries, utilities, and gas. During my summer jobs/internships, I focused more on saving for tuition and rent. There are plenty of opportunities for work on campus that will be flexible with your class schedule or there are various other ways to make a side income through companies like Lyft, Uber, and DoorDash to name a few. Plus, we are in an age of technology where you could easily start a side hustle. If you build a side hustle properly it could actually detach your time from your income. In a traditional job you get paid for the time you put in while in a side hustle you can build a system where you can get paid more than the time you spent investing. So you could be attending classes or spending time with family and still have a flow of income.

Don’t Spend Money Just To Fit In

 Learn to live below your means. One of the hardest things for college students and recent grads to do is live below their means. Society makes it tempting to eat out and buy the newest car, apartment, and gadget that comes out. Seems like that’s all that is promoted on TV and social media. I went a little counterculture and I drove a hand-me-down car, lived with roommates to cut the cost of rent, and didn’t own the newest technology or clothes throughout college. I actually still wear most of the same clothes from freshman year, maybe time for a wardrobe update haha. I’m not saying it’s bad to spend money on things but be smart about what you're spending your money on. Is it a need or a want? Before I make a purchase I asked myself, “Do I need this? Or would this be nice to have?” I really wanted to figure out why I was making a purchase. In college, I never wanted to buy something I didn’t actually need, just to fit in. 

When You Track Your Spending, You’d Be Surprised Where It Goes

Track your spending habits. The first time I tracked my spending during college was an eye-opener. I spent a lot on eating out and going out with friends during my first two years. Spending 10 to 20 dollars twice a week every week may seem small but trust me it adds up pretty quickly over the course of 4 to 5 years. If you do the math it’s $8,320 dollars on going/eating out if you attend college for 4 years and spend $20 twice a week. Now imagine if you cut your spending in half in that one area, you’d save about $4,000. One of the changes that helped me reduce my spending was meal prepping. This limited my temptations to eat out and freed up some income to put into savings or tuition. Instead of going out every Friday and Saturday night and spending money, I made it a goal to spend money only on one night. In college, there are plenty of free opportunities or reduced cost activities you can attend. I recommend tracking your spending habits and see where you can start saving as well. If you use credit cards for everything, print off your last 3-6 months of statements and see where your money is truly going. Be honest with yourself and give yourself grace when looking at spending habits.

 By making smart financial moves during high school and college it has given me the freedom to start pursuing some of my other ambitions and provide a launchpad to pursue financial abundance in my 20s.

 Thanks for reading and please feel free to reach out if you have any questions regarding the things talked about above.