Whatever you do, don’t buy nice new stuff. People spill beer and liqour on nice new stuff. People fall and break nice new stuff. People, who aren’t very nice, often steal nice new stuff. Plus, nice new stuff is expensive… especially if you consider someone, probably you, will spill beer on it, break it, or have it be stolen from you. The only exception to this rule are bed sheets, always get yourself some nice bedsheets (and definitely make sure you’re the one ripping the shrinkwrap off them)

I’m half kidding (about not getting nice new stuff) about all the bad things that can happen to nice new stuff but the half that’s not kidding is trying to convince you that the premium you pay for nice new stuff isn’t really worth it while you’re in college. Wait until you have a job, don’t have to move as often, and can truly learn to appreciate it before you buy nice stuff - that’s Tenet #2…

Tenet #2: Wait until after graduation to buy nice new stuff.

Reason #1: It’s cheaper. Bottom line, if you need a couch you should consider scouring Craigslist or your school’s bboard before you go to someplace like Ikea (and they’re still on the cheaper end of the spectrum). As school semesters end, people will be looking to move and that’s when you can swoop in and snag a couch for much less than what a store will charge you.

Reason #2: You’ll move, probably several times. I (and like nine other people) helped one of our friends move from one apartment to another one day (it was one of those 3 moves in one day so that we could share the truck fees) and he had some ridiculously nice solid wood furniture. I could not tell you how nervous each one of us was when we were moving his furniture because it was so nice and each bump could potentially cause an ugly gash in the soft wood. Now, imagine you had to move that nice stuff each year from place to place… think of how beat up your furniture would get and how angry you’d get every time someone dropped it (even though they were helping you move).

Reason #2a: Nice furniture is heavy. My friend’s nice couch, in the story above, was so heavy it required about 8 people to move it. Plus we had to stand it up to get it through the stairwell and then unscrew the feet in order to fit it through the door. Forget dinging it a little (which we did a couple times), nice furniture can be expensive. You don’t really want that grief when you’re moving from one dingy apartment to another.

Reason #3: You really don’t want to be a prick and obsess over your nice things. Something nice can go to something not so nice really quickly. Something that isn’t nice almost never gets worse. Imagine you invite some friends over for some pizza and beer and the next thing you know you’ve become that guy sliding coasters underneath your friend’s beers and asking them to be careful with the pizza drippings. C’mon… seriously, you don’t want to police your friends and you don’t want to have to obsess over a really nice couch. Just get an old Ikea couch from that senior moving out across the street for $50 (what will he care, he has a job now and you’re basically paying him so he doesn’t have to take the couch with him) and enjoy life.

Reason #4: Nice things go missing. I’m not saying someone will steal your iPod but people have been mugged because bad people recognize that those telltale white earbuds are usually attached to three hundred dollar objects the side of a fat credit card. And if you’re the type to lose your keys from time to time, you run the risk of losing your expensive possessions.

Please don’t read this to mean that you shouldn’t get nice things ever, just consider holding it off for four years until you get that degree and land that job, after that you can start treating yourself without having to turn to plastic.

Moral of the story? Don’t buy nice new things. It’s a waste.

This article is part of a new series I’ve started called Personal Finance for College Students (hence, PF College).

Every fall, outside of Doherty Hall on the campus of Carnegie Mellon, sat a guy with a table, a photocopier, hundreds (if not thousands) of credit card applications, and hundreds (if not thousands) of stupid college t-shirts. Invariably he’d be surrounded by freshly minted freshmen who want a cool free t-shirt and didn’t care about giving out very personal information and copies of their driver’s license. I was one of them.

Looking back, I was lucky in that it wasn’t a identity theft fishing scam (gee, all my personal information on a credit card application, what was I thinking!?) because not only did I get a free t-shirt but I also was able to start one of the most valuable things in one’s personal finance arsenal: a credit history. This leads me to Tenet #1 of the Personal Finance for College Student series… Establish a strong credit history as early as you possibly can.

Tenet #1: Establish a credit history as early as you can, keep it blemish free at all (legal) costs.

Why a strong credit history, which will drive a high credit score, is important is fairly simple to understand. If you have a good history of paying off your debt, you aren’t late, you haven’t defaulted, a creditor will be more likely to loan you money. A perfect scenario for a creditor is someone who both pays on time and pays lots of interest - you will want to just fit the bill on the first count, paying on time (wait until you buy a house to be perfect in this case).

Real Life Example: If you want to buy a new Scion tC for $17,740 (base), it will cost you $358 per month for 60 months if you have good credit (FICO score of 650-649). If you have excellent credit, that price drops down to $348. If you have no credit, it will cost you $432 per month. If you have no credit, the same Scion tC will cost you $25,920 instead of $20,880 (excellent), or nearly 25% more - just because of your credit! Five thousand dollars is a very very nice vacation.

Let’s break down Tenet #1…
Establish a credit history as early as you can…

But it’s hard to get a credit card with no credit history, I keep getting rejected! - That’s correct, especially if you’re a college student with no income. So, when you apply for a new credit card (I recommend the mtvU credit card, it’s geared towards students), put that you’re a student and put your tuition payments as your income (I’ve did this but I don’t know what the legal ramifications, if any, there are on doing this) and you may be approved. If not, ask your parents to put you as a cosigner on a credit card (but never use that credit card!). Eventually, after a few months of being a cosigner, try applying for another card again.

…keep it blemish free at all (legal) costs.

What does blemish free mean? - It means you should pay off your debt every payment cycle and always pay on time. If you don’t think you should do this, take your credit card and send it home. Don’t use it. If you can’t pay off your statement balance every single month, don’t use the card. You do not want to leave college with any credit card debt whatsoever. Period. You will have plenty of time to enjoy the fruits of your labor after you start working (when you’ll have more money anyway and way bigger fruit!), so now is the time to set yourself up for success later.

It helps me to think of your credit as a glass ball (this is an analogy commonly used for a lot of things, like a reputation). If you take great care of your credit, it will look beautiful and it can help you out. If you drop it, it’ll break or crack and the glass ball will be very very difficult to repair and will almost never look as good as it once did.

This article is part of a new series I’ve started called Personal Finance for College Students (hence, PF College).

After a fruitful five years of college, I was fortunate to be one of the few who escaped with a reasonable amount of student loan debt (~$25,000), zero credit card debt, and degrees that made it easier for me to find gainful employment in an otherwise difficult job hunting season (Spring of 2003). I didn’t become interested in personal finance until a few years later, coinciding with the creation of this blog, but I had luckily and inadvertently built a solid foundation onto which to apply that learning and new found interest. That being said, looking back with 20-20 vision, I think that there are many things a college student can do that will make their lives much easier in the decades after graduation.

If you’ve made your way here and will be attending or are currently enrolled in college, you are much farther along in your financial maturity that I ever was. Hopefully I can impart some of the wisdom I’ve gained with the benefit of years (only a few) and hindsight.

The topics I’ll tackle will try to be most relevant to the college-aged crowd (establishing credit, handling credit cards, basic budgeting, furnishing an apartment, and much much more!) and some may seem pretty basic for those of you who are connoisseurs of blogs (I see readers of blogs as trying to squeeze knowledge like water out of a stone - blogs are probably the final frontiers in terms of valuable knowledge so I commend you!) but often we forget that when we’re learning something new, it’s not the difficulty of the topic that trips us up but that we didn’t even know the topic existed.

So, I welcome you to join us, both as a passive reader and an active contributor, as I try to dispense small golden nuggets of wisdom about personal finance for college students.

This article is the introductory post of a new series I’ve started called Personal Finance for College Students (PF College).