One of the biggest myths pertaining to travel is that it has to be expensive. The key to traveling on a budget as a student is to know what to spend your money on and what you should be not spending your money on. If you master this, you will be able to see double the locations in your travels. Here are my tips for how to travel abroad as a low-budget student:
- The Hostel vs. the Hostal: For those going to the Spanish and Portuguese speaking world and do not necessarily want a low budget hostel, consider a hostal. Many non-Spanish speakers do not realize that a hostel and a hostal are not the same thing. A hostal in Spanish refers to a family owned bed and breakfast that is safe and economically. Additionally, these will give you more interaction with the locals. For example, in Madrid, one can get a Hostal for 25 Euros per night with a private room and bath that is one block from the Plaza Mayor. This is a hidden way to have the low-budget travel experience without having to stay in a room with six bunk beds.
- Consider the Budget Airlines: If you are going to Europe or Southeast Asia, do not be afraid to go on the budget airlines. The key to be careful is with your luggage. Ideally, only bring a backpack and then you will not have to pay to check your luggage. Also, always print a physical copy of your boarding pass in order to avoid the fee by the airline. If you use these sometimes you can get a $1 ticket from Marseille to London or a $200 flight from Kuala Lumpur to Paris. Yes, these deals do exist and with a little creativity and intelligence, you will surely find them.
- Hop-On-Hop Off Bus: These busses are in most cities that range from Europe to African cities. Where they are beneficial to a young traveler on a budget is that they eliminate transportation costs during the day that can save a great deal of money. For example, in Berlin or Cape Town, the sites are very spread out. What is best is to buy the unlimited one day or two-day pass for a set price and use the bus to get to the main sights. Usually, the bus will be positioned to hit the major points of the city and will allow you to get the lay of the land before going off on your own.
- Look For the Menu of the Day: In many European countries they have lunch specials that include an appetizer, entrée, dessert, and a soda or glass of wine. Usually, you can find these specials for 10 EUR. This allows you to eat better, try the local food, and even wine taste in the process. Thus, avoid the fast food and get out there and eat good food for an affordable price.
What is important to remember as a student is that there is a cheap way to travel that is very different from traveling with your family. If you use this to your advantage, then you will absolutely be able to see a great deal of the world at a young age and add a great deal of depth to your life experiences.
Gambling is one of the worst thing you could do for your personal finances as a whole. Nonetheless of you are a student who is struggling financially, or a parent that has to bear the heavy costs of college enrollment. In fact, it is scientifically proven that the “problem gambling” group (people who gamble excessively to a point it has a tremendous financial and mental costs) mainly consists of poor individuals, so the fact you have little money in your possession doesn’t make you any less prone to become an addict.
The above is my “don’t gamble, kids!” disclaimer. I am by no means encouraging anyone to wager their money through gambling (ESPECIALLY if its against the law where they live).
After we have established the fact that gambling can be the root of all evils, we have to withstand the fact gambling is a highly popular recreational activity, and especially for college students who are able to set foot inside a casino for the first time in their life. Although they can develop issues as a result of uncontrolled gambling, it’s no less of a risk than cigarette or drug consumption which incredibly trendy at this age.
Below are 7 tips that will help you control your gambling spending, decrease associated fees, and improve your chances of actually winning something back.
1. Use a set budget
Easier said than done, I know, but you need to have a stringent budget for gambling purposes, else even a one wild night can cost you dearly. The budget should be a number that you would make you feel comfortable to lose in one evening, if you occasionally gamble (once every few weeks or more seldom than that). If your frequency is higher than that, you should decide on a weekly or a monthly budget, but that’s far more difficult to track.
The best tip I have for you is to use cash when you go to a brick-and-mortar casino, without a debit or a credit card. This way, you won’t be exceeding your limits even if you really, really, want to.
2. Spend time playing in demo mode
If it’s boredom that drives you into gambling, and you need endlessly click to slot’s re-bet button, why won’t you play online on demo mode without risking any money? Although it turns things from gambling to gaming, some people can get to similar levels of enjoyment from this activity without putting any money at risk.
3. Online casinos offers lower stakes
Playing online casino games for real money can be quite destructive because you cannot set limits in the same way you can when going to a land-based casino. It’s also a non-social activity, unlike going out to a casino with your mates, which has higher risks of becoming addictive (or so I believe, found no evidence to that). On the other hand, online casinos offer a lot more variety. Variety of games, variety of promotions, variety of competitions, and also variety of stakes. While the average US casino had a $1-5 minimum per hand in blackjack, online casino enable lowballers to wager as little as $2c per hand.
4. Avoid credit and payment fees on deposit
If you are going to a brick and mortar casino, do not use credit card to make payments for your chips as it will incur additional costs in comparison to cash/debit. If you are going to gamble abroad, do not exchange your money in the casino, as the exchange rates will be drastically worse to a standard exchange bureau. If you are playing online, check the casino’s specific fees for usage of different payment methods, and consider using eWallets that sometimes have unique promotions of if you use them to deposit (eWallets you can use for gambling: Paypal, Neteller, iDebit, Siru and a bunchload more).
5. Utilize bonuses and loyalty club memberships
Online and landbased casinos will go above and beyond to preserve you as a customer. This is exactly why casino membership cards are so great – they accumulate bonus points that you can use in the bar, restaurant or on the felt! The same applies to online casinos. The more you play, the more of your bonus you redeem. The more you deposit, the more VIP points you accumulate. This is free money that you should use, just be sure to read the fine print and understand online casino bonuses can also be a hassle because they limit your withdrawal if you have won any money (until you have fully redeemed the bonus).
6. Focus on low-house-advantage games
If you are indifferent towards the gaming experience in a casino and just enjoy the thrill of gambling on money, why won’t you try games that you have better chances of winning at? Of course that in the long run, you will end up losing money if you play casino games*, but if you play a game like blackjack or baccarat, you are likely to consume your funds at a much more sufficient pace than with slots.
* If you specialize in games like Texas Hold’em poker you might end up even winning! This is not a casino game but rather a skill game with 10-20% lifetime winners (who made more money than spent). Same thing applies to sports-betting – if you are an expert punter using a sophisticated strategy, you might win in the long term.
7. Don’t play to win
If you want to have a night evening out (or in your dorms) playing casino games, do it for the sake of entertainment without telling yourself you can win, because you can’t. It’s not a question of luck, but rather simple statistics. With every single die roll, statistics balance out. If you are playing blackjack that has an advantage of about 0.5% against optimal strategy (assuming you do use it), that means that roughly 0.5% of the total turnover will be won by the casino. So if you bet $10 a million times, you should be about $50,000. That all there is to it, maths. You can win on a single night, or a week, or a month or even a year, but you won’t be winning in the long term.
Hope this was helpful to you young gamblers. Just note that in the USA online gambling is not only prohibited but also quite impossible. Online casinos that accept Americans aren’t the ones you want to be wagering your money in. For concluding words, I will refrain from using the banal “good luck” wish, and just advise you to gamble responsibility.
When children start university, their parents might have bought them a bar fridge, a laptop, and probably some new clothes as well. Many of these freshmen come to university armed with their very first credit card too, and although there are several risks involved with giving a young adult the responsibility of handling their own credit card, there are some advantages too. So, what are the pros and cons of student credit cards?
There are numerous benefits to taking out a credit card as a student, such as:
- Convenience in case of emergencies
- It’s a safer way to pay for things instead of carrying around cash
- More secure online shopping
- Helps to develop money-management skills
- Helps to start building a good credit history for later in life, when loans will be needed for things like cars and homes
One plus for parents, is that if they’ve co-signed on the card, they should get a statement at the end of every month too, so they will be able to monitor their child’s spending habits during the month. This will allow them an opportunity to see if their money is being spent irresponsibly, and to help offer guidance through their children’s first few years of financial independence.
Of course, with all forms of lending there is a downside as well. One of the biggest downsides of students having their own card is that the majority of young people graduate with a large student loan debt. This already heavy burden is increased significantly when there is also money owing on a credit card.
These sizable debts can also prevent the student from learning to save while they’re still at school, which can have an impact on their financial situation for years to come. Bills that aren’t paid on time can cause a lot of damage to a student’s credit score, and the same applies too, to parents who have co-signed for the card.
Some credit cards have high annual fees and interest rates, so it’s important to compare online credit cards to make sure you get a good deal. Taking the time to find a good offer could save you a significant amount of money down the line.
How Parents Can Help
Parents give their children credit cards when they start university, mainly for the convenience that the card provides. However, students need to be taught how to use their cards responsibly, to avoid overspending and building up unwanted debt. There are several things parents can do to help their children improve their money management skills.
Set down the rules and regulations and stick to them. By letting them know what the card should be used for you can establish the ground rules. If the rules are broken, the card can easily be taken away.
Limit the card’s usage to only school expenses such as books and so forth, rather than entertainment, and let your child know too, that you expect them to use it to pay monthly bills regularly.
Talk to your child about using the card wisely to avoid high interest rates by paying off the balance in full each month. Make them aware of identity theft and the things to be aware of when using the card online and in stores.
Students must understand how important it is to only use the card to charge for amounts that they can afford to pay, and that the key to responsible credit management is to keep their charges to at least 30% lower than their credit limit.
Students must learn that using their credit card wisely while they’re still in school will help build strong credit record. This will open many doors for them in the future, such as when they need to borrow money to buy their first house or car, making their financial future much more straightforward.
College education is not cheap; the cost seems to increase each year and the level of debt as recorded by student loan statistics confirm this. The $1 trillion involved is truly staggering. That of course excludes details of the money lent to students by their parents and other revenue raised to allow students to complete their education as a prelude to career. The chances of a successful career are perceived to increase for graduates but they mostly face repaying their debts as their pay checks begin to come in.
It is essential that a student and his or her parents do some research to obtain the money required unless it has already been safely saved anticipating the future needs. That can be difficult and the recession certainly destroyed many family’s savings.
Alternative Loans Specific to Education
The Federal Stafford Loan is competitive. Those who qualify get subsidized; the interest is paid by the Government for the time the student is still at college. Unsubsidized loans are available to all and interest deferred. The loan rate is capped at 8.25% but is variable. The amount that can be borrowed varies from student to student but is never more than $31,000 in total. Parent PLUS Loans and Perkins Loans are two other avenues of finance while private loans generally require a co-signatory. The latter are particularly aimed at needy students and their numbers have also increased since the recession struck a few years ago.
Other Revenue Sources
Parents can re-mortgage their homes as another alternative though the problems that the real estate market experienced during the recession has meant that the level of equity that many families owned was reduced and is just recovering. There is sometimes a cash element to an insurance policy or the chance of withdrawing a sum from the 401K Retirement Fund though the latter has an impact on retirement provisions and that can be a dangerous move.
That should be a last resort. Everyone needs to make proper provision for retirement and keep making contributions. That is a discipline that should lead to a comfortable retirement and that is less likely to happen if people draw money back out for other use.
Pay Off Expensive Debt
If you have a child in his or her mid-teens who is almost certain to continue on to college before starting to work then you should be making the suitable preparations to ensure their time can be funded. If recent years have been difficult because of the recession then it may be a challenge. What is certain is that if you are to help in any significant way then you need to look at your financial position and make some appropriate decisions. Certainly you need to get rid of any expensive debt you may currently funding. A common example is a credit card balance that incurs a high rate of interest each month. You can pay such amounts off with a personal loan at a much lower rate of interest if you have a regular income and appear capable of making the repayment instalments throughout the agreed term of the loan.
A Good Budget
It highlights the absolute need for everyone to have a budget and the discipline to follow it. It must show you are ‘balancing the books’ to start with mindful that if there are imminent education costs to add there may be the necessity to make economies elsewhere. The personal loan is one part of that. Certainly other household expenditure may be reduced by seeking more competitive utility suppliers, insurance premiums and telephone network costs.
The budding student can perhaps contribute as well? There are part-time jobs available now that the economy is improving. Those parents who have instilled the value of money into their children at an early age may well find that as teenagers they are more than willing to do a little work and they may have saved money themselves in addition.
There is certainly great merit in continuing education and with a little financial prudence it should be affordable. The benefits should come in the future with the prospects of a higher paid job as a result of graduating before going into the jobs market.
A few weeks ago I posted a review of Dave Ramsey’s College Planning Service. You all had mixed reviews of the product, and many people have come down hard on Dave for the product.
So, because I am not Dave, and because I do not have a cushion of millions to fall back on if a product/idea goes bust, I wanted to float an idea by you all before pursuing it any further.
Considering a FAFSA Prep Service
A coworker of mine was talking to me recently about how the lines at our local community college’s financial aid office are out the door each semester. Their office is woefully understaffed and the people who truly need help filling out a FAFSA, or answering their financial aid questions, are swamped.
Do you think these same people would pay to have help completing their FAFSA? Rather than wait in a long line in a financial aid office, would they rather go sit in a cushy chair across from a personalized advisor, and pay to have help filling out the FAFSA?
Consider this, FAFSA.com, the non-government entity run by Student Financial Aid Services, Inc. completes tens of thousands of FAFSA applications each year and they charge $79 for each application. People still pay this fee even though the FAFSA can be completed for free at www.fafsa.ed.gov.
Why do people pay this? To be fair, I know that many folks stumble across FAFSA.com and think it is the official government site, even though it clearly states it is not. SO a portion of these customers are there because of a lack of knowledge.
The rest however, have made it very clear that they are willing to pay for this professional service, and to have personalized assistance in completing their FAFSA.
In talking with a number of these folks, they view it as no different than paying someone else to complete their taxes each year. They know they could do it themselves for free, but they are too busy/confused/lazy to do it themselves.
Does it Defeat the Entire Purpose of Financial Aid?
Does a service of this kind defeat the entire purpose of financial aid? Most often, the people submitting a FAFSA application are the ones who need to qualify for need-based aid. They don’t have $79 lying around to throw away on professional FAFSA assistance.
Would it be highway robbery to provide this service at a cost to college students and their parents?
These are the questions that I am wrestling with. There are many other physical limitations to a service of this kind, but before I move any further in the planning phase of this business, I need to iron out the ethical dilemmas.
I am looking forward to hearing your thoughts!
Part requirement for my Master’s thesis, part lifelong dream, part income generation tool, and part social promotion strategy; my first non-fiction book is currently under development. As part of my Master’s course work, I have known that this day would come for a few years now. Getting to this point however, has been a struggle, and it is hard to believe this is actually happening.
Regardless of all of that, the first pages have been written and my book is under way!
I don’t have a title chosen yet, although the working title is “The Smart Way to Pay for College, Post Great Recession”. Please let me know if you have any brilliant ideas for a title.
As you can likely deduce from the working title, the book is a non-fiction guide to helping students, parents, and other family members make smart decisions with college financing. I introduce some unconventional means of raising money to pay for college, and hope to provide a great resource for anyone struggling with the rising costs of college.
I hope that this book can be a handbook to paying for college in 2013 and beyond. The college finance landscape has changed dramatically in the last 5 years, and old tactics won’t work any more. We need to re-tool our thinking if we want to have any hope of being able to afford college when our children decide to go.
As much as I would like, this book’s goal is not to battle the high cost of college tuition. That is a separate beast and one that I can’t tackle alone. My goal however, is to help you manage those rising costs and find ways to negate the rise in college tuition.
Where You Come In
The entire purpose of my book is to help you (students, parents, grandparents, or others) understand and better manage the college finance system.
This is my full-time profession so I feel like I have my finger on the pulse of the hot button issues, but I crave your help in letting me know what questions you have!
What are the burning questions you have about paying for college?
What makes you the most angry about the college finance process?
If you could change one thing (besides getting free tuition…) what would it be?
What are your views on working while going to school?
Do you plan to take out student loans?
I also plan to post outlines, chapters, and excerpts from my ongoing book project here on Money for College Project. My goal is to hold myself accountable to you through my blog, and I hope you will help by calling me out on my progress, and checking in to see how things are coming.
Oh, and if you would be up for an interview let me know because I need to conduct a number of them!
By now you have likely heard that last Friday, Congress failed to pass an extension which would keep student loan interest rates low. Because of this failure, yesterday, Stafford Subsidized student loans doubled in interest rate from 3.4% to 6.8%!
Yes, these are the loans that are made available to students who come from low to middle income families and also qualify for the Federal Pell Grant. Yes, these are need based loans that just received a doubling of their interest rates.
Both isles of Congress seem fairly set on passing legislation that will reduce these interest rates back to their former levels, but for now, the infighting has prevented any actual measures being passed. Until Congress takes action and changes this interest rate back, any new Stafford loan disbursements made after July 1, 2013 will be under the new interest rate increase. The good news is that if Congress does pass this measure, it would be retroactive in time for the upcoming Fall 2013 semester. So please let your Congressman know how much you would like the interest rates to stay at 3.4%.
What Should You Do?
Unfortunately, if you are in a situation where you need to take out student loans, there is really nothing that you can do. Stafford subsidized and unsubsidized loans are the most competitive interest rate student loans available, and their repayment options are by far the most flexible of any loan type you will find. If you need a student loan, this is still your best choice for a loan.
You can however, try to guard yourself from having to take out student loans at all. You should always max out any “free” financial aid before you consider student loans as an option. Many financial aid award packages automatically bundle student loans in with your financial aid award, but you do not have to be so quick to borrow.
You can maximize your scholarships searching by checking out the free listings at your local library, your high school guidance counselor, your department at college, or your professors. These resources are often excellent resources for scholarships, that not many other folks think to explore.
You could also consider becoming an entrepreneur and starting your own business to pay your way through college. You could buy and sell used textbooks, you could start a furniture moving company moving stuff into and out of dorm rooms, you could start a computer repair service on campus, you could start a mobile coffee cart business, or you could freelance write online for some extra cash.
All of these methods will earn you money which you can then use to pay your tuition outright. In my mind, there is not much more satisfying than working hard and paying cash for something you are passionate about. Paying your own way through college also makes you appreciate what you are paying for and will likely help you be more invested in your education. You will also pick up some very valuable business skills, and develop an entrepreneurial mindset that will benefit you throughout your entire life.