Advice for a College Student

[GopherJoe]

Hello all. Thank you for taking the time to read over my situation, and offer any advice that you may have.

I am currently a 19 year old sophomore at a large public university. I am studying actuarial science and economics if this is relevant. Below is my current financial information:
Roth IRA: ~$5,000
Checking: $9,200
Student Loan Debt: $12,500 (covers first 4 semesters) at an average of 4% interest rate.
Rent/Parking/Utilities: $925/mo

I have no other monthly expenses, but I must pay for food/gas/clothing and anything else that I may need. I just started tracking my expenses, but my estimates right now are:
Gas: $70/mo
Food: $250/mo
Entertainment/Dates: $75/mo
Household needs/other shopping: $100/mo
Total Expenses: $1420/mo

I am about to start an internship making $28/hr which I will work about 12 hours a week. This is flexible, and could work 6 more hours a week if I would like, but I am also taking 17 credit hours, so I'm not sure how much time I will have. This will provide ~$1,100/mo in income.

Part of the reason my checking is so high is because my financial aid was just dispersed, so ~$4,700 is money that was just awarded. I plan to use this to cover the $925 in rent for the next 5 months which school is in session.

I would like some advice from you guys regarding if you think I should be doing anything differently.

1. How much of an emergency fund should I keep? I know the default is 3-6 months expenses, but this is typically said about people which jobs that they depend on to sustain themselves.

2. How aggressively should I be paying on my student loans right now? I am not required to make any payments until graduation, but most of the loans are unsubsidized, so interest is accruing. I just recently paid off $330 in interest that had accrued over the past 16 months, but would like to know if this is of more importance right now, or if contributing to my IRA/Savings would be more optimal.

3. Is there anything about my financial situation that is alarming, or anything I should change?

4. What would you do differently if you had started your journey earlier? I want to start as early as possible towards a path to financial independence, so any advice is greatly appreciated.

I have been lurking for a few weeks, and this is my first post so if anything is wrong or if I need to give more information, please let me know.

Thank you!

[SwordGuy]

First of all, congrats on actually having savings!  Bravo!

Second, you didn't account for all your expenses, there's a lot missing.  Our ability to give advice in that area will be limited until you fill in those blanks.

Here's some general advice for graduating on time and on budget:

Get your school's catalog that details exactly what courses you have to take in order to graduate with your intended degree and major(s)/minor(s).   Make a list of them.  Pay real attention and REALLY read what it says. 

Now, you may be thinking to yourself, "But I have an advisor at the school and they take care of this.  I don't need to waste my time on this boring, detail-oriented task."

Advisors get it wrong.   All the damn time.   YOU need to know you're taking the right courses to graduate on time.

Get a copy of your transcript and cross off all the courses off the list that you have already taken.

Find some past year's catalogs and find out how often the courses you still have to take are offered.  Once you get to the upper level courses in some of the smaller majors, you may find that they are only taught once a year.  You don't want to be planning classes for your last semester only to find out a course you need won't be taught for another year.

If you have a choice between taking a rarely taught class or one that's taught all the time, take the rarely taught class as soon as you can (assuming you expect you have the background to pass it and you're not overloading the semester with too many hard classes at one time).    My last two semesters at school were largely freshman level overview classes.

Second, go the extra mile with your work and your classes.   Even if it's just a sucky temporary job for college and even if you don't care about the subject.   You are building skills and habits that may last a lifetime.   Build good habits.

Third, think about the quality of the people you hang out with.   No, I don't mean do they have wealthy parents or the right "breeding".    Are they kind?  Are they considerate?   Do they encourage you to learn and grow as a person?  Or do they encourage you waste your life accomplishing nothing?  Do they build others up or tear others down?  Can you really trust them?

The things you learn and the kind of people you hang out with today are the kind of person you'll be more like in 5 years.  Choose wisely.

[cluelesswithcash]

First of all, congrats on actually having savings!  Bravo!

Second, you didn't account for all your expenses, there's a lot missing.  Our ability to give advice in that area will be limited until you fill in those blanks.

Here's some general advice for graduating on time and on budget:

Get your school's catalog that details exactly what courses you have to take in order to graduate with your intended degree and major(s)/minor(s).   Make a list of them.  Pay real attention and REALLY read what it says. 

Now, you may be thinking to yourself, "But I have an advisor at the school and they take care of this.  I don't need to waste my time on this boring, detail-oriented task."

Advisors get it wrong.   All the damn time.   YOU need to know you're taking the right courses to graduate on time.

Get a copy of your transcript and cross off all the courses off the list that you have already taken.

Find some past year's catalogs and find out how often the courses you still have to take are offered.  Once you get to the upper level courses in some of the smaller majors, you may find that they are only taught once a year.  You don't want to be planning classes for your last semester only to find out a course you need won't be taught for another year.

If you have a choice between taking a rarely taught class or one that's taught all the time, take the rarely taught class as soon as you can (assuming you expect you have the background to pass it and you're not overloading the semester with too many hard classes at one time).    My last two semesters at school were largely freshman level overview classes.

Second, go the extra mile with your work and your classes.   Even if it's just a sucky temporary job for college and even if you don't care about the subject.   You are building skills and habits that may last a lifetime.   Build good habits.

Third, think about the quality of the people you hang out with.   No, I don't mean do they have wealthy parents or the right "breeding".    Are they kind?  Are they considerate?   Do they encourage you to learn and grow as a person?  Or do they encourage you waste your life accomplishing nothing?  Do they build others up or tear others down?  Can you really trust them?

The things you learn and the kind of people you hang out with today are the kind of person you'll be more like in 5 years.  Choose wisely.

All great advice while in college.

Pay off your student loans while you're going to school if you can.  Or as much as possible, even if it's just the interest.  Do this before you put anything into savings - you can worry about that after you're debt free and get your career going. Your internship is paying you really well, I would have killed to make $28 an hour in an INTERNSHIP!  So my advice, work as many hours at this place as you can.  You will kick yourself in the @$$ once you graduate and realize you owe a ton of money and may/may not have a job right out of school.  I was unemployed several months after graduating and it was a slap in the face, I naively thought I'd easily find a job because I had a college degree and I was living in a major city.  I had $60K in loan debt, no health insurance, etc.  I was waiting to go to graduate school and had the worst time finding a job.   Once I went to graduate school I had a very decent job in the mid 2000's (I was making around $15-$16 an hour) and worked as much as I could, paid off my graduate school classes while working, and started paying off my other high interest loans, etc.  I was living with someone so my expenses weren't super high.  Maybe get a roommate if you don't have one??

Good luck to you - you'll be alright.  You're already budgeting, thinking about saving money and how to attack your loans while you are only 19 and still in college - most college students aren't thinking like this, I sure as hell wasn't.

[GopherJoe]

Second, you didn't account for all your expenses, there's a lot missing.  Our ability to give advice in that area will be limited until you fill in those blanks.

I can elaborate on my finances a little.
Rent: 860/mo for one bedroom in a 3 bedroom apartment
Parking: 135/mo
Utilities: 30/mo
Groceries: 175/mo
Fast Food: 75/mo
Dates includes Restaurants or the theatre or the bar. : 75/mo
Household needs I guess is just a category for things that come up around the apartment. Cleaning supplies, laundry detergent, toilet paper... I am breaking it into more categories on my budget sheet, but this is the first month doing it, so it is really rough estimates.

Find some past year's catalogs and find out how often the courses you still have to take are offered.  Once you get to the upper level courses in some of the smaller majors, you may find that they are only taught once a year.  You don't want to be planning classes for your last semester only to find out a course you need won't be taught for another year.

If you have a choice between taking a rarely taught class or one that's taught all the time, take the rarely taught class as soon as you can (assuming you expect you have the background to pass it and you're not overloading the semester with too many hard classes at one time).    My last two semesters at school were largely freshman level overview classes.

Thank you for this advice. I have made out more 4 year plan in an excel document tracking the requirements for both majors I am pursuing, but should make sure that I have all the exact class numbers and not just a general "ECON 4XXX". I will look into this during the coming semester. I definitely do not want to spend more than 4 years.

Third, think about the quality of the people you hang out with.   No, I don't mean do they have wealthy parents or the right "breeding".    Are they kind?  Are they considerate?   Do they encourage you to learn and grow as a person?  Or do they encourage you waste your life accomplishing nothing?  Do they build others up or tear others down?  Can you really trust them?

The things you learn and the kind of people you hang out with today are the kind of person you'll be more like in 5 years.  Choose wisely.

Wow, I did not expect a response like this. I appreciate it. I think I have a strong core of friends, but this is a really good check list to determine whether to continue devoting time to some other friends and colleagues. I appreciate all the advice!

[GopherJoe]

Pay off your student loans while you're going to school if you can.  Or as much as possible, even if it's just the interest.  Do this before you put anything into savings - you can worry about that after you're debt free and get your career going.
...
I was unemployed several months after graduating and it was a slap in the face, I naively thought I'd easily find a job because I had a college degree and I was living in a major city.  I had $60K in loan debt, no health insurance, etc.  I was waiting to go to graduate school and had the worst time finding a job.   Once I went to graduate school I had a very decent job in the mid 2000's (I was making around $15-$16 an hour) and worked as much as I could, paid off my graduate school classes while working, and started paying off my other high interest loans, etc.

Thank you for the advice about savings. I will just keep what I think I will need to cover my rent and expenses, and start throwing more of it at my student loans. Thank you for sharing about not finding a job right away, because I think this is something I take for granted. If I did not pay any of the loans while in school, I would be graduating with 26k in debt, so hopefully I can dwindle that down a little bit through my jobs.

Your internship is paying you really well, I would have killed to make $28 an hour in an INTERNSHIP!  So my advice, work as many hours at this place as you can.  You will kick yourself in the @$$ once you graduate and realize you owe a ton of money and may/may not have a job right out of school.

I will start at 12 hr/wk because this is my first job I have had during the school year while in college and I want to make sure I am managing my time well. If I am, I will definitely bump this up to 18 by working an extra day, and then I will be full time in the summer. I got really lucky with this internship so I will hope to take advantage of it so I can continue working for them because the pay is hard to beat. I live in a 3br apartment so I have two other roommates right now, but it is just a high cost of living area, and that is the going rate if I want to have my own bedroom.Thank you for the advice!