College Connect: The psychology of money

Posted By David Wilhite

By Kristin M. Bradshaw

Following the turn of their first tassels, graduated high school seniors enter the collegiate world wide-eyed and inspired by their new-found independence. While some have the soft cushion of their parents’ savings accounts, others with fewer resources find the move stressful.

Research has found the state of one’s mind is directly correlated with the state of one’s finances.

“If you’re looking at the lowest income people: high stress, health problems,” said Matt Goren, who teaches in the financial planning program at the University of Georgia. “When you don’t know if you’re going to make your bills at the end of the month, you’re way more stressed out than the people who can.”

Between his time at the Aspire Clinic, a free financial planning institute at the university, and teaching personal finance courses, Goren has assisted a large number of students and Athens community members in establishing a healthy relationship with their finances. According to Goren, becoming a millionaire is achievable for most anyone who follows a process to get there.

“It’s all about developing positive habits and thinking about the 45-year-old version of yourself, 25 years from now,” Goren said. “It’s simple and it’s boring—spend less, save more, and make an investment account.”

The years spent studying in college are often characterized by uncertainty. More often than not today’s students’ pantries are littered with ramen noodles and coupon clippings. However, Goren recognized a pattern in that frugality.

“Believe it or not, the World War II types and Millenials tend to manage their money better than any other living generation,” said Goren, “The greatest generation grew up during the Great Depression; millenials grew up during the Great Recession. It does something to your psyche when you see people losing their jobs.”

This is especially true for University of Georgia student Sarah Casteel, an English education major from Alpharetta, Georgia. She has worked two jobs every summer for the entirety of her college career.

“I have to,” Casteel said, “The money I make is the money I have to live off of for the entire school year.”

Since December of 2013, Casteel has lived independently from her parents and is responsible for all of her finances.

“I gave up everything,” said Casteel of her decision to live independently, “I gave up my health insurance, my car, my car insurance, my cell phone, all financial stability.”

She employs budgeting habits in her day-to-day life to keep her finances in order. However, this has come with the occasional setback.

“My life is a numbers game,” Casteel said, “Every purchase I make comes with guilt, even food. When I buy gas I can’t help but think, ‘Oh my God, well there’s gas for $2.53.’ So I stop, get gas, and then there’s another station right down the road for $2.48. Guilt. I could have saved that.”

The weight of financial uncertainty is a heavy burden to bear, especially for independents like Casteel. However, according to Goren, honest conversation is the fast track to managing both money and the anxiety that comes with it.

“I think talking about this stuff is an important first step,” Goren said. “If you’re not having the conversations, talking about the hard stuff, you’re likely to struggle significantly more.”

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