“Honey, did you spend $800 on the credit card at Payless yesterday?”

I work with a lot of college students.  College students are great people, they’re fun, interesting, and very creative.  College students typically ARE NOT good with finances though.  Student loan debt is high for almost anyone, but some people do the credit card thing, some people buy expensive cars, and some people just blow their money on alcohol. 

When they ask for help though, it is a unique opportunity to watch someone learn and while I can’t watch the people who are reading this blog, I can put up information that I use for damage control.

1. No situation is hopeless-  I usually get one or two people a month who were told by their bank that they were worthless.  The bank didn’t say that, but the way bank staff treat people without money is one reason I went back to a credit union.  No money to a banker means “waste of time.”  Bank superiors demand results in the form of dollars, not overdrafts.  The truth is that in most situations, people who are asking for help just need to know that they can get out of it with some hard work (and lots of ramen noodles) but dollars can stretch miles, and coupons can be money in the bank.
2. You can always squeeze a little tighter-  College students need to be reminded that a $40 drinking binge is not a right, and that by going out 4 fewer times a month saves them $160.  Starbucks Hounds have a similar situation.  Could you drive a smaller, cheaper, more fuel efficient car?  Would you consider a debt consolidation loan?  Do you have a massive DVD collection that you could sell (or rent out depending on how many people you know)?  What if you made your own lunch, dinner, and breakfast for a month?  Small, simple, changes will lead to more breathing room.
3. Credit Card Companies will work with you-  If you’re considering bankruptcy because of a credit card debt, let the card company know that.  They will do everything they can to get that money, and if you’re willing to discuss a payment plan with them, they will happily do that if it will keep you from bankruptcy.
4. Avoid borrowing after consolidating-  A consolidation loan is only effective if you remove temptation to go into debt now that the cards are paid off.  Cut your card up if you have to.  If you want it for emergencies, freeze it in a container of water, during the 2 hour thaw, ask yourself if you really need what it is you were going to use the card for.  Don’t nuke the card to defrost it, it will ruin the card.
5. Follow advice from your financial institution-  If they waive fees, be especially nice because it is a one-time thing.  If they tell you to go to a financial skills seminar, go and then come back and review notes with them.  If they ask you to stop using a credit card, use their scissors to cut it up.  They will be better able to help you if they can show superiors good reason for their actions.
6. Finally, set up a budget!

If you’ve had to do damage control, sound off!  What worked for you?  Everyone is different, and an individualized approach will always be the most successful one.