Student Loan Dodgers

Unfortunately, credit card debt is a reality for most American families. According to the Credit Counseling Service, the average family in 2005 had more than $9,000 in credit card debt, an amount that more than doubled from 1995.

If you’re like most college students, you begin accumulating debt while in school and carry that forward after graduation. It’s of little comfort to say that the best way to avoid debt is not to get into it in the first place, but that’s a little bit of salt that’s worth remembering.

If you have credit card debt, the worst thing you can do is add to it. If you can, commit to putting away your credit cards for one, two or three months. Don’t use them at all, and during that time make a concerted effort to increase your payments. At the end of your “test period” see how much you’ve reduced your debt.

If you can’t go that long without using your credit cards, you’ve got a problem. Either you aren’t making enough to make ends meet, or your spending priorities are out of line with your budget. Take a look at each charge on your credit card statements. Realistically, did you need each item you purchased? An emergency car repair will look a lot different than a new handbag or weight set.

Don’t use your credit card for cash advances. You’ll quickly find out that you don’t need these high-interest loans. Not only do they rack up interest charges from the moment you get the cash, they also prevent your payments from reducing your principal until the cash advance debts are repaid.

Look at the interest rate you’re paying on your balance. Shop around and see if you can find a lower interest rate. Beware of “introductory rate” offers. They can go bad on you quickly if you make a late payment or accumulate additional charges during the grace period.

Ultimately, the only thing that will get you out of debt is responsible management of your money. Generally, if you avoid using your credit cards for purchases you couldn’t make with your cash-on-hand, you can avoid the high-interest revolving debt trap that many individuals and families find themselves in. On the other hand, if you can’t go a month without a “must-have” credit card purchase, you’re putting your financial future at risk. That’s something to think about when you go shopping.

When you’re in college, there are many opportunities to both exhaust your financial resources and accumulate debt. This is not only counter-productive while you’re in college, but it can also negatively affect your lifestyle well after you’ve graduated. As much as possible, avoid those negative habits that absorb your money, or worse, cause you to accumulate debt.

Drinking is one of those habits. Drinking is a very expensive habit to get into and college students tend to spend a lot on alcohol. For some people, getting out of the habit of drinking proves to be an insurmountable challenge and follows them throughout their lives. Limit your drinking. When you go into a situation where alcohol is available, set a spending limit before you go in. When you reach the limit, stop. If the alcohol is free, set a drink limit and stick to it. You’ll feel better, look better and you won’t find yourself in regrettable situations.

Gambling is another great way to establish a bad habit and lose a lot of money at the same time. The proliferation of casinos and the ease with which people can travel to cities that have legalized gambling means that college students have unprecedented access to gaming outlets. If you’re going to gamble, never bring more money than you can afford to lose. Once the money is gone, go home. Trying to recoup your losses will likely lead to even greater financial difficulties. If you want to learn about how the casino games work, take a statistics class. You’ll find out that your chances of winning are exceptionally small. If you understand just how likely you are to lose your money, you may find it much easier to stay out of the casinos.

High stakes poker, especially Texas Hold ‘Em, has recently gathered a lot of attention from college students who are looking for a quick win. Poker is a game of skill and you don’t acquire card-playing skills immediately. If you want to pursue a poker championship, learn how to play the game with good friends first. Order a pizza, use peanuts, M&M’s, or pennies as the ante, and have a good time while you learn. Just don’t spend a lot of money doing it.

If you’re looking to develop a skill that will serve you well throughout your lifetime, take up golf. Golf is still very important in business, and many universities have their own golf courses where you can learn to play on the cheap. After four years on the University links, you’ll be able to hold your own with the boss when it really counts.