By Ashley Scott

When Luke Morgan came to The University of Georgia to start his freshman year of college, he understood only as much about personal finance as he needed to get by.

“It either comes from being raised in a family that teaches you, or doing it and learning, and the latter is probably the more effective way of doing anything,” he said.

By learning as he went along, Morgan acquired the skills he needed to be near self-sufficient by his graduation in December 2018. He began with help from his parents, but gradually transitioned into paying for his expenses on his own.

Brenda Cude, a professor in the department of financial planning, housing and consumer economics at The University of Georgia, says tackling finances is a process students should begin as early as possible. Cude offered a few tips to help students better understand their finances.

Retrain your brain

When students learn to appreciate their money, they become more thoughtful spenders. This can be difficult when money comes from somewhere else, such as parents or loans, she said. The first step is to treat all money as if it’s your own.

“We put money in different categories in our mind and we treat it differently, it’s what we call mental accounting.” She said.

Cude also recommended putting a small percentage of incoming money into a savings account to build the habit of saving.

A Job to Offset Costs

One way to better understand money is to get a job. Cude said having a part-time job while in college is a helpful way to learn about taxes, budgeting and other financial aspects that become the clearest when we learn by doing. Morgan agreed.

“If your money is at stake, you learn. And I think there is definitely a difference behaviorally between when it’s your money and someone else’s,” he said.

Build Credit

While most assume ‘building credit’ means getting a credit card, Cude stressed that credit can be built in different ways depending on one’s confidence level.

Students can become authorized users on their parents’ credit cards, or take out low-stakes credit-building loans. This loan is the student’s responsibility, and should only be for the purpose of building credit, Cude said.

If you do choose to take out a credit card, it’s best to take one out while still in school. Cude explained that some credit card companies are much more likely to issue credit to students because they believe their parents will back them up. Once you graduate, in the company’s eyes, you lose this distinction.

Curtailing Parents’ Support

The most important thing to remember is that making the financial break from parents is a process, and finding a job doesn’t necessarily mean you won’t need help in some areas.

“You really do have to be able to afford the life you choose to live, so it’s finding out in advance, not just what your salary will be, but what your take home pay will be after taxes and your benefits come out,” said Cude

She advised understanding how much income you’ll be earning and what that means as far as your living situation. Morgan has taken this notion to heart.

“I think that people are reluctant to realize that it’s much easier to sacrifice early,” he said.

Morgan recently accepted a research position in Washington, D.C., rather than a higher paying job with a company in Wisconsin. He feels it will be easier to make worthy sacrifices now for the career he wants later. Morgan said when he’s older and more established a lower standard of living would be less attractive.

“Long-term, with my goals in mind, it will pay off,” he said.

Ashley Scott is a journalism student at the University of Georgia