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How to Manage Stress About Money While You're in College

Ashley Eliassaint, a senior at New York University
Source: Ashley Eliassaint

College students are always thinking about money.

As the cost of education continues to increase significantly, many students report feelings of uncertainty, isolation and anxiety when it comes to the pressures of managing their personal finances at school. Along with tuition costs consistently rising, the costs of necessities such as food and gas have gone through the roof due to nationwide inflation.

What's more, financial stress can have life-altering consequences: 42% of college dropouts cited financial stressors as the main reason for leaving school, according to a study by the University Professional and Continuing Education Association.

Maeve Marsh, a senior at the College of William and Mary, said that money is a "taboo" topic. It is increasingly difficult for students to open up and seek support to manage their financial situations.

"I think people aren't super open about money… it brings in a sense of awkwardness for some reason. Especially when you go to a school where tuition is really expensive, I would say most students have never had to worry about money before college. So I think the 'taboo-ness' when talking about money causes a lot of challenges," Marsh said.

Maeve Marsh, a senior at the College of William and Mary
Source: Alfred Herczeg
Maeve Marsh, a senior at the College of William and Mary

Olivia Bily, a senior at Villanova University, said that money can also add to competitive pressures in college.

"Going to a school with students from more affluent education programs brings a competitive element which can add a lot of stress," Bily explained.

The anxiety caused by the competitive atmosphere can come to fruition when students are dealing with job prospects. Not knowing what the job market is going to look like, as well as the pressure of finding high-paying entry-level roles, adds another layer of stress that can create feelings of hopelessness.

Another big challenge for students? Debt.

"The biggest challenge is definitely debt," said Ashley Eliassaint, a senior at New York University. "This has been a problem even before the pandemic, Covid just turned the problem into a whole new beast."

During the pandemic, internships and job offers were revoked for a lot of college students and many experienced the hardship of their parents getting sick or losing their jobs. For many, this increased their stress — and their debt.

In addition to student loan debt, some students also wind up racking up credit-card or other debt, which can grow rapidly.

One of the biggest causes of stress and anxiety is uncertainty. And this is especially true when it comes to money. So, it's important to take control of your finances early on. That will eliminate a lot of the uncertainty – and the stress. Here are a few tips from the experts to help you get started:

1. Consider your career path

Taking control means starting early to plan out your education and career path. If you're still figuring out where you want to study, think about why you want to go to school.

Ask yourself: What professional field do I want to go into? How much debt can I realistically take on? What do I want my future financial situation to look like? Thinking about these questions can help you make a clearer decision on what you want your future to look like. Sure, plenty of students take the "I'll get to school then figure it out" approach, but what we're talking about is alleviating anxiety and stress. So having a plan now will help you avoid getting in too deep financially and then regretting it down the road. Or, if you decide to embark on a high-debt path, at least you know what you're getting into — that's certainty — and that will help ease your stress.

More from College Voices:
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When you're choosing a college, it's easy to get caught up in wanting to go to a prestigious school. There are many amazing schools in the U.S., but unless you have a significant scholarship or financial aid, you are likely to wind up with a huge student loan bill.

"There's this college experience 'FOMO' thing going on where many people feel like they have to apply to these huge top schools. Community college is kind of looked down on," said Eliassaint.

If it makes sense for your financial situation, there is no shame in going with a less expensive option such as community college. And, a lot of students say that going to a big school isn't always worth the glamour. So, don't get caught up in the hype — make a decision that's right for you. The college you attend doesn't define you — or your opportunities.

2. Do your research and educate yourself

Another way to reduce financial stress is to do your own research.

Understand what your options are when it comes to financial aid, scholarships, and student loans — all the potential sources of income you will have.

Research the average salary for the career you are pursuing. Will it be enough to pay off the student loans you will have to start repaying after graduation? Do you know what the average rent is in the city you're moving to? These are all important numbers to know.

Carolyn McClanahan, a physician and certified financial planner, explained the importance of taking the time to do your research to prepare yourself for life after graduation.

"When you apply for jobs, ask about benefits and whether the company will help you repay your student loans," McClanahan suggested. "As a student, make sure you're doing everything you can to understand all the benefits that you may qualify for in your state."

There are many free resources online to educate yourself and become familiar with good financial habits. A great place to start are the websites of banks and financial institutions which all offer online resources. Also, there are resources on YouTube, TikTok, and other platforms from influencers who share their experiences and advice.

"Literally, YouTube! It's free and everyone has access to it. You can easily search 'college loan,' and you'll find a whole bunch of videos on people who have advice on how to pay off loans," Eliassaint said.

Just remember to always make sure you are using reliable sources when getting financial advice online and don't just take one person's opinion for it. Always doublecheck to make sure you're not getting bad advice.

And research doesn't have to just mean searching online! You can also ask people — in real life — who are living where you want to move or are working in the field you want to pursue for information on salaries, rent, living situations and more.

3. Start a budget right now

When you're in college you are planning for your future life, so you need to have a budget and know your numbers ASAP.

Everyone has different spending habits. Take the time to record your monthly spending and familiarize yourself with your needs and wants. What are your basic expenses — rent, phone, internet, food, gas, etc.? How much are you spending on extras such as going out to eat or buying new clothes?

Go through your bank statements and try to separate your needs vs. your wants. It is important to discipline yourself, while also being able to forgive yourself. Hold yourself accountable, but understand that it's not easy to budget in school with so many expenses.

"You have to think about the future all the time when budgeting. The better you know yourself, the easier budgeting will be," Bily said.

Buffie Purselle, author of "Crawl Before You Ball," emphasizes the importance of being conservative with spending and budgeting in college ("crawl") to set you up for success after you graduate ("ball").

"Put forth a plan to achieve what you want," Purselle said.

Everyone has a different approach to budgeting, but this is how many students go about doing so: First, figure out how much you need to spend on necessities such as food and gas. Then, create an emergency fund. Set aside some money every month that you won't touch unless absolutely necessary. Purselle warned against falling into the trap of overconsumption. Try as best you can to restrict your budget for unnecessary things.

Despite all the temptations to spend, there are lots of easy ways to save money in college. Bily bought her school supplies, household items and hygiene products in bulk to last her through all four years of college.

You can also buy things used — remember, seniors are graduating and they're not taking all of their stuff with them! So, the more you can buy from them when it comes to things such as textbooks and dorm furnishings, the more you will save. Facebook marketplace, local groups and Craigslist are also great for picking up used items at a discount. For example, you might find a local family getting rid of their old couch that is perfectly good just because they want (and can afford) a new one. Let that old one — and the savings that come with it — be yours! Plus, try to find ways to socialize at school such as having friends over or going to university-sponsored events that won't bust your budget.

4. Communicate

Money can be overwhelming. So don't try to handle it alone if you are having major anxiety about your financial situation. Reach out to a family member, friend or guidance counselor and talk about what's going on — and potential solutions.

"It's important to learn to have hard conversations and be open with the people you trust," said McClanahan, "There are 8 billion people in the world, you only need a few good people in your life to support you."

5. Get active

Staying active is another great way to reduce stress.

This could mean participating in a sport or school club, running, going for a hike with friends or volunteering in the community.

Marsh works three part-time jobs while balancing her academic and social lives. She believes that having a job is the best way to reduce uncertainty and anxiety when it comes to money.

"People feel like there aren't a lot of growth opportunities with college jobs," Marsh said. "Take it as an opportunity rather than a stressor — everything became easier when I started looking at work as a growth and learning opportunity, focus on the benefits."

Getting active and involved on campus reduces stress. Find an outlet to be yourself and do things that you're passionate about. However, use your time wisely: If you don't really love something, there is no reason to devote your time to it. And, if the amount of time you are committing is adding stress, don't be afraid to cut back on some of your activities. Getting a good night's sleep is a key part of managing stress. If your body is under duress because you aren't sleeping enough, that will just add fuel to your anxiety.

6. Network

A big challenge that students face while in college is the uncertain job prospects. Where will the money come from? How much will there be when I graduate? Will I be able to pay back my student loans? Will it be enough?

That's why it's important to network and develop real connections before your time in college is over. That means joining clubs or organizations related to your major, and connecting with students, professors, and recent grads who are in your field.

This will not only help you build a network that could lead to your first (or second or third) job, but it will also give you an opportunity to ask people about the industry you are trying to get into. It can help you learn about what the common salaries are, good places to live on that salary and what the job entails.

Remember: Uncertainty is one of the biggest sources of stress. The more you learn, the better.

7. Clear your head

Instead of running online or going out to buy something as a pick-me-up, practice mindfulness.

Try meditating or just doing something to clear your head. There are a lot of guided meditations for all sorts of things (including stress) that you can download from podcasts or elsewhere online. Even if that's not your thing, it's important to slow your brain down and clear your head.

"Take a beat, go somewhere quiet, be with yourself, and acknowledge what's going on and think of ways to resolve it," Purselle said, "Forgive yourself and be in a space of gratitude for what you do have."

This will not only redirect your behavior — and your wallet — but it will help you manage your reaction the next time financial anxieties hit, she explained.

Social media might also be contributing to your financial anxiety. People perpetuate "millionaire lifestyles" on social media that are completely false, Purselle explained. Don't buy into what others are doing or saying around you.

"You should never be upset about someone who doesn't pay your bills," said Purselle.

Block out what society or social media makes you feel like you should have and figure out what you want.

College Voices″ is a guide written by college students to help young people learn about important money issues such as student loans, budgeting and getting their first apartment. Miguel Badia is a senior at Villanova University majoring in marketing and business analytics and minoring in communication. He is an intern for the NBC News Group consumer insights team, helping to conduct market research and figure out ways to reach target audiences.The guide is edited by Cindy Perman.

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