Relief for First-Year College Financial Headaches

College freshmen often find managing their own finances a daunting task — there's tuition, toiletries and a host of other amenities many young people have to deal with by themselves for the very first time. She talks about whether first-year students should get a job or a credit card to juggle costs.

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ALEX CHADWICK, host:

College is expensive and getting more so. It now costs on average almost $30,000 a year to attend a private college. For many freshmen, this is going to be the first time they really have to face major money issues because there's also spending cash and all sorts of things. Here to help with some basic financial lessons, personal finance columnist Michelle Singletary, a regular DAY TO DAY contributor.

Michelle, here is a big question for kids starting in school: Should a freshman get a job?

MICHELLE SINGLETARY: Personally, I think not. I think that first semester they should be focused on how long it's going to take them to do their studies. Certainly, going to college is very expensive, but all the studies show that the more hours they work, their studying suffers. And that's a lot of money to spend for them to get Cs and Ds. So I think that first semester, if they can afford not to, they should not work.

CHADWICK: Tuition is a big cost, but so is room and board. Is there any study that says it would be cheaper or not cheaper to choose to live off campus?

SINGLETARY: Lots of times they think living off campus is less expensive, but not necessarily so, say if you're in L.A. or New York. So they need to look at the cost of living. It also depends on how many roommates they get. Obviously, the more roommates they have, the less they have to spend. But a lot of times they want to jump out there and get off campus, and they don't realize you've got to pay first month's rent, last month's rent, security deposit. And you know what? They don't realize all the things that they have to buy, like toilet paper and salt and pepper and paper towels.

My niece is studying abroad in Africa, and she called me. She said Aunt Michelle, I never understood how much I mooched off of people.

(Soundbite of laughter)

SINGLETARY: And she's complaining that she doesn't have enough money for, like, basic things that she just took for granted.

CHADWICK: Well, here's how she can solve that problem. She'll have lots of credit-card offers in the mail for freshmen. Don't they get all these kinds of things? Is that something that a young person going to college should look at seriously?

SINGLETARY: No, absolutely not. I don't think any college student should have a credit card. Students entering college are often offered an average of eight credit cards during their first week of school. That is just criminal, in my opinion.

No. This is the first time that many of them are away from home. They haven't really had the experience of budgeting with cash really out on their own without Mommy and Daddy as a backstop. I tell college students: If you feel like you need to build a credit history, wait until your last semester of school, apply for a card. Use it, spend like $20 a month, pay it off on time. That's all you need to do. In six months to eight months, you will begin to have a good credit.

CHADWICK: Here's a statistic from the Consumer Federation of America. Twenty percent of undergraduates who carry credit cards have debt levels of $10,000 or more.

SINGLETARY: That's right, that's right. And this is on top of student-loan debt. Too many college students are graduating with a lot of debt, and they begin that path down that road as a freshman when they are bombarded with those credit-card offers. So stay away from them. You've got enough studying and other things to do at this point.

CHADWICK: Michelle Singletary writes the syndicated column The Color of Money. She's a regular guest on DAY TO DAY for discussions of personal finance. Michelle, thank you.

SINGLETARY: You're so welcome.

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