How to budget, manage credit at college

Thursday, July 26, 2012 | 6:00 a.m. CDT

COLUMBIA — Laura Kogut is likely the first to tell you that personal finance is not likely to be high on a freshman's list of concerns.

"It's kind of missing in education right now," Kogut said, while also noting that the onus is largely on students to take advantage of an array of financial resources on campus.


 A solid first step in becoming financially independent is taking the time to choose a bank that fits your needs. A number of banks offer programs tailored for college students, who aren't experiencing high income or thinking about serious saving just yet.

Here is a handful of banks with locations close to campus:

  • Tigers Credit Union:  A full-service financial institution on MU campus, started in 1984 by students, for students (at MU, as well as Stephens and Columbia colleges). In addition to standard accounts, Tigers Credit Union offers an array of advising and planning services to help students stay on top of their finances, now and in the future. Online banking is available, and ATMs are found in Memorial Union and the Student Center. | Location: N17, Memorial Student Union
  • Landmark Bank:  Operates in Missouri, Oklahoma and Texas, and offers multiple sports-themed checking accounts, as well as a fully-functional mobile app. The bank's owner, Mark Landrum, incorporates an appreciation for the arts in his business, and you can browse a local art gallery at Landmark's location just off Broadway. | Location: 10 N. Garth Ave.
  • Commerce Bank:  Operates in over 350 locations around the Midwest, including two downtown Columbia locations. The Commerce Bank building  is also on Columbia's list of notable historic properties. | Location: 901 E. Broadway
  • Bank of America:  With hundreds of branch locations and ATMs across the US, and popular "BofA" mobile app, most customers shouldn't have a problem managing their account while avoiding transaction fees. And if parents happen to have a Bank of America accounts as well, money transfers are easy in a pinch. | Location: 800 Cherry St.
  • Shelter Bank:  One of Columbia's largest financial institutions, and a subsidiary of Shelter Insurance Companies. Having only one location may be a hassle for some, but Shelter makes up for it with competitive rates on loans and account returns, as well as the spectacular Shelter Gardens. | Location: 1817 W. Broadway
  • Boone County National Bank The bank was founded in 1857, the first in this part of the state. There are about a dozen branches in the Columbia area, with the main branch just blocks from campus. | Location: 720 E. Broadway

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Kogut is program director for Tigers Credit Union, and she counsels students on budgeting and financial planning.

“Four years can go by pretty fast, but the decisions students make have a huge impact,” Kogut said.

The first step is ensuring that students who open checking accounts fully understand how they work, and learn to properly budget on a typical college-poor income.

Budgeting for the long-haul

Ryan Law, director of the Office for Financial Success, agrees that budgeting is one of the more pertinent financial skills freshmen can learn.

"A lot of freshmen may have never handled more than a few hundred dollars at a time," Law said. "In a lot of cases, it's something that needs to be pointed out to them. It's unusual for somebody to know exactly how to budget."

The Office for Financial Success was started at MU to help students manage their money from all ends, including "problem areas" like budgeting and debt management, and "productive areas" like insurance and investing.

The office holds group financial seminars regularly, and 17 student counselors are available for free personal sessions.

"Each session is tailored to the individual," Law said, emphasizing what he calls the peer-to-peer model of financial counseling. "They're students, so they know what students are going through."

The website for the Office for Financial Success offers resources on saving and spending, but Law said students would do best to take advantage of the counseling services.

Law also teaches three classes in personal financial planning, including a one-hour pass/fail course called "Financial Survival," tailored specifically for students as they progress through school.

Credit where credit is due

One component of personal finance Kogut stresses is the importance of credit and credit history. Though credit doesn't affect students while in school, she says building a good credit history before graduation, though difficult, can be an enormous help in the long run.

"Thirty-five percent of your credit score is payment history, and 30 percent is capacity," Kogut explains, which is the ability to borrow money on a revolving line of credit.

Revolving and installment are the two most common types of credit. Whereas installment credit — say, on a car loan — addresses one initial sum and is eventually paid off, revolving credit is paid continuously, as with a monthly credit card bill. If the balance is routinely met on a line of revolving credit, your score goes up and your credit history looks that much better.

"What a lot of people don't realize is how crucial credit history really is, say, when applying for a car loan," Kogut said. "You can get a much better interest rate if you have a good credit history, which, in the long run, means you're paying thousands of dollars less."

She said it's unfortunate for college students because successes like making rent payments on time do not improve one's credit score, but missed payments can still eat away at a student's credit history. In short, students only stand to lose points.

Kogut said credit cards can be a good way to build credit history while in college, since revolving credit can build your credit score, provided they are handled in a responsible and informed way.

"We try to be very educational, and we never want to get a student in a position where they might over extend themselves or not be able to make the payments," Kogut said.

Kogut said using a credit card for regular expenses like gas and groceries is a typical strategy.


  1. Mobile management: Several web and mobile applications are available to keep tabs on spending. Mint is a popular service from Intuit, the company behind TurboTax and Quickbooks. The app can be downloaded free from the App Store or Android Marketplace, or accessed online, and is highly customizable to track all aspects of spending.
  2. Buy second-hand: There are no fewer than three vintage and second-hand clothing stores on or near Broadway. Aside from being cheap sources for old sweaters and wacky T-shirts, rummaging through racks of old clothes can be kind of fun.
  3. Textbooks: Although it’s easy to relegate the hassle of buying textbooks to the bookstore, students can save a lot by bargain hunting online. First, buy only what you know you will immediately need, then take the time to search for bargains on books you won’t get to until later. And remember – the older edition might work just fine, but do your research.

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