5 Things Not To Spend Money on in College

This is a guest post from Josh, who is a college student, startup founder, and weekend warrior. Check out his blog, Entrepreneur Stories.

“Live like no one else now, so that later you can live like no one else.” – Dave Ramsey.  Follow that advice and when it comes time for your 20 year school reunion, you’ll be the one all your friends are jealous of.

At a young age your money is worth a lot more than when you’re old because of how long it can work for you; invest it wisely and it will grow rapidly, squander it on frivolous things and you’ll end up barely scraping by your whole life.

Spending money on stupid things only leads to trouble…here are five things you should never spend money on while in college if you want a financially lucrative life.

 

1. Cars

Spending Money CarBreak, and they burn money (have you seen the gas prices?), and insurance is astronomical for young people.

Let me tell you a short story. There was a high school student who started a lucrative company. He then bought a Mercedes, and a BMW, and then a Jaguar – by 19 this guy had owned a whole fleet of luxury cars (and spent a boatload of money doing it). In college that business was no longer a viable option and this guy walked away from it.

Sad part is there was very little savings leftover despite the fat paycheck he’d been receiving for years. That guy was me, and I can tell you straightaway, having a fancy car is not as “cool” or fun as you’d think, it’s mostly just a waste of money. If you want to live a comfortable life, don’t throw money at cars while your still a teenager.

 

2. Fancy Clothes

most-expensive-suitBut what about job interviews?

Have you seen Mark Zuckerberg lately? He looks like a jogger with bad taste. despite what the salesman at Macy’s is feeding you, silk and leather are not needed to land a job. That’s doesn’t mean you should show up dressing like Mark in a hoodie and jeans, but a clean $90 outfit from Khol’s is all you need – don’t go out and drop a grand on a fancy suit.

Don’t believe me?

I once attended an interview that was suits only (Toyota keeping things classy). Upon arriving in a pair of slacks and a jacket that didn’t quite match I was an intimidated by the other candidates who were wearing the finest suits money can buy. However, as soon as my interview started, the clothing ceased to matter and I had a great conversation with the interviewers.

I got the job. My “suit” cost $50, I’ll wager some of my competitors clothing put them back over $1000. Despite what you may think or advertising may tell you, fancy clothes are not necessary for getting jobs and should be avoided until you can truly afford them.

 

3. Watches: They are a Great Conversation Piece but a Terrible Investment

expensive watchPeople love their watches and will die by their favorite brand. However, having a great watch will not gain you any practical points.

Here are two examples:

  1. A casual meeting with myself, my co-founder, and two clients. We sat down to lunch and began conversing. The subject of watches came up and we chatted for a few minutes about our favorites, the heritage, and the Pebble (that thing is so cool).
  2. I was deeply involved in the hiring process at a former place of employment (I’m not allowed to say where). I’m not lying when I tell you that one young man was actually rejected because his watch looked much to pretentious. To be honest, it wasn’t just the watch, but the watch was the kicker and actually prevented that poor guy from getting a job.

A watch can be a timeless piece (pun intended), but it won’t do you much good, especially when you could be spending your money on much better things like tuition.

 

4. Eating Out

five guys burgersIs an easy, quick way to spend a ton of cash.

The biggest issue with eating out is that you won’t even realize how much money you’re spending on it until it’s to late. Ten dollars here and there adds up fast, and unless this money is budgeted it can ruin you.

When I was running my first business it was normal to have meetings at restaurants and visit food establishments three or more times a day. The bills would skyrocket up to hundreds a month. If I’d caught myself and mitigated that cost, I could have used that money to fund an entire year’s tuition!

 

5. Electronics

awesome stereoHave new models way too often.

The truth is you don’t need the latest ipad, ipod, iphone, and ihome. Electronics depreciate by 50% in their first two years, and buying new versions all the time is literally throwing your money away. Laptops and phones are built to last, so use them for their intended purpose!

It’s much to easy and “normal” for college students to blow money on frivolities. This leads to a small savings account and years of living paycheck to paycheck; but you don’t need to take that path. The solution is simple, don’t buy useless stuff and expect it to pay off. “Live like no one else in college, and at your reunion you’ll be living much more comfortably than your classmates.”

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Comments

  1. says

    I had a roommate in college who went off the rails and tricked out our room with all sorts of expensive gadgets, TVs, stereos, speakers, all the best that 1994 had to offer. It was way expensive and he admitted that he was still paying for it months after graduation.

    • says

      Ouch, that is a brutal story. The worst part is I bet that he doesn’t own any of that stuff anymore (just 15 years later), and if he does, he never uses it anyway!

  2. says

    Well my one consolation is that I’m not big on fashion or watches, otherwise I’d have all 5 of these things checked off in my post college years. The worst was what I blew on my car, but all of the eating out would’ve definitely added up to a massive figure. It took a while to get on from that lifestyle. Now I’m much more serious about my finances and that kind of stuff is all such a low priority. If only I was willing to sell off my car at a loss and downgrade. I can’t quite move on from that mistake.

    • says

      It sounds like you’ve at least learned and figured it out. You may not sell the car right now, but in a few years you will probably move on from that as well!

    • says

      I can resonate with this one as well. In my college years I’ve owned three cars each of which I’ve blown way to much money on. Time to move onto a toyota gas saver and leave that in the past!

    • says

      Agreed, there is a tradeoff between time spent studying and time spent cooking, but there needs to be a set budget on food expenditures or else they will skyrocket!

  3. Alexis says

    I couldn’t agree more with the eating out and clothes issue. I avoid eating out unless I’m really starving or have a lot of work to do. In regards to clothes, I actually buy most of my clothes at thrift stores. Last summer I bought a gently used Anne Klein black pinstripe skirt suit with a silk lining for $4 and a brand new white skirt suit for $2 (needed a bit of tailoring, it was a bit big for me) from the Salvation Army. I’ve also bought some nice business tops and pants from other thrift stores in the area, and believe it or not, but I get more compliments on my fashion sense now since I’ve started buying there then before. Not to mention, my wallet is a lot happier too! Even if some people are “grossed” out by thrift stores, if you go to a local one or even a clothing exchange where people buy/sell their gently used clothes, you’d be amazed by the amount of new clothes that are in excellent condition, great brands, and wonderful prices.

    • says

      I’m a huge fan of thrift stores! I like to go to a few in the “higher end” neighborhoods in my area, and you find great stuff, and some is even new like you mentioned. Even if it is not new, if it is good quality, just get it dry cleaned and tailored and you will save hundreds!

    • says

      Great call – but maybe the rule should be “Don’t Spend Money on Top Shelf Booze when anything will do in college?” IDK…

  4. says

    It’s funny, but I never spent money on these things and up to now (8 yrs after i graduated) I still don’t. I never owned a car, I might buy fancy clothes at cheap prices (Ross, Marshalls, etc), the last watch I bought came from Payless and I’ve received watches as gifts in recent years, eating out is a luxury that I can’t enjoy just yet and I’m not into electronics…. Sigh.

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