A note to parents and college students about spending (and what might help)

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Today I’m going to share, at the request of Visa Prepaid,  my experience at college freshman year- my experience about money and spending.  Or rather, overspending.  And just how quickly I was caught up in “free” credit cards and getting myself into debt. And no I’m not proud of it. But I’m real and I make mistakes and maybe  if I share my story someone else won’t.

I grew up in family that did not do “handouts.”  If we wanted something, we earned it or purchased it ourselves. The ultimate catch-22 I had growing up was wanting to drive a car- but in order to drive a car, I had to pay for insurance.  In order to pay for insurance, I had to get a job.  Living in a remote area of New Hampshire, this wasn’t really an easy thing to do without a car.  I may not have appreciated that my parents were so strict and set in their ways about money, but looking back now, 20 years later, I can tell you it was a wise move on their part, especially with “me” as a kid.  I was um…challenging.  Once in a while, you know, like in a blue moon?
cash

Anyway, when I went off to college, I had money in my “pocket” for the semester to buy books and anything else I might need.  Money that I earned working the entire summer for, saving away.  Of course, like many kids, I got to school and had FREEDOM and new friends and realized very quickly that I liked to party. A lot.  Sadly for my wallet, I did not like to party with the kegs of beer at frat parties, I liked girlie, fruity stuff.  Which costs more.  Within a month my money was gone, and I had books to show for it, but little else except the freshman 30 15.

I had supplies I needed to purchase for projects.  Plus, more parties….and then it was time to start Christmas shopping.  And it seemed like every time we turned around, there were young, hip looking 20-somethings with tables and displays offering FREE credit cards!  Plus, when you applied, you could have a FREE tshirt!  A frisbee!  A travel mug! And like many of my classmates, I applied for almost all of the cards.  Unfortunately for me, I was approved for all that I applied for.  Within a few months I had 11 credit cards.  ELEVEN.  It never occurred to me to stop and think about what was going on, what I was getting into, what lay ahead.  I just saw a way to finish paying for things I needed and “needed” without having to pay for all of it at once.

Would I do this all again? Absolutely not.  But I’m 20 years older than my 18 year old self and I know so much more about money and life and what actual needs are.  But parenting a kid like me, I think I’d probably take their summer savings and keep control of most of it here at home, depositing amounts on something like a Visa Prepaid Card so that yes, they could access their own money, but I could also help to keep them on track and to learn to be responsible for their money before it was too late.

My debt wasn’t frivilous for long.  Soon after graduating, even with a Bachelor’s Degree, I wasn’t making more than $7/hour and it wasn’t anywhere near enough to live on so I did odd jobs and babysat whenever possible.  I still didn’t make enough to cover expenses and was more often than not charging gas and groceries (and yes, cute new boots- I’m a slow learner I suppose). At the peak, I had over $25000 in credit card debt.  All by myself. Do you know what I have to show for it?  That stupid “Freshman 15″ which really was 30 and has gone away and come back repeatedly over the years.  No fun trips, nothing substantial.

As parents, we have to teach our children about finances.  Not just about what the money is, and that we have to earn it ourselves, but also how to manage it, and how to plan.  Today, we have 1 credit card that we use whenever possible, because the rewards for using it are great.  We have a

backup card, and 2 store cards.  That’s it.  I’ll never have more again.  Too dangerous.  Too risky.

I can tell you that when my kids are older and start being away from us for periods of time and travelling or going away to school, we’ll be seriously considering the options available like Visa PrePaid cards so that we can keep a bit of a tab on things and hopefully keep educating the kids so they learn before they get into a mess like I did.  I’d rather they get mad and yell and scream at me for “only” depositing a few hundred at a time into their prepaid account than have them end up like me.  It’s kind of like a best of both worlds option  in my mind- the kids can have use of their money but need to check in with parents before adding more money- so if they are spending like crazy, parents can know right away and try to help solve issues.

I am blogging on behalf of Visa Prepaid and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Discover more at http://www.VisaPrepaid.com or view more Visa Prepaid videos at http://www.youtube.com/visaprepaid.

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About the author: I’m a 30-something mom to three, brand ambassador. content creator, social media maven, blogger extraordinaire, earth lover, butcher, baker, candlestick maker (or something along those lines) – love word games, crafting, cake decorating or shooting pictures.

176 comments… add one

  • Thanks for sharing. I think prepaid Visas are great. Credit card debt is out of control these days and it’s starting way too young. I’ve heard credit card companies have even sent cards/applications in names of the family dog. I don’t know how true that is but I believe companies can be greedy and unrelenting to get more people in debt.

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  • The FREE credit cards were available when I was a college student. I kept thinking but I can’t pay for this. Luckily I had the foresight to know I couldn’t handle a so-called ‘freebie’.

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  • I think the prepaid Visa card is a great idea. It is so easy, way to easy, for young people to acquire debt.

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  • Very insightful post. I’ve only ever had 1 credit card, that I did well on paying the bill each month until my ex husband lost (quit) his job. Thankfully, since I didn’t have any credit before that, we weren’t able to rack up more than $500 on the card (the company had me on a limit for the first year), but the late fees were horrible after we had no money to pay the bill each month. Now, because of that one card and a couple other bills that had to be put aside and paid late, I can’t even get a credit card with a limit on it for backup emergencies today (too little credit, all of it bad sadly). Thank God for pre-paid cards, and you can bet your last dollar that both of my kids will be using pre-paid cards until they are both out of college and I will be the “banker” or creditor, monitoring their spending and putting a kind of limit on the card so they can learn how to manage it better.

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  • I know the importance of good spending habits now, and I hope to instill the habits into my children. I know that I worry about how we’re going to get my daughter to college and how she will pay for things. A prepaid card sounds like the way to go, since it will help her keep track of her spending and help me see what she pays for. I’m glad that they have these cards around so that young kids these days won’t go into too much debt at such a young age.

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  • Prepaid cards are a good idea to budget your spending.

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  • This is a great idea for people like me who tend to overspend! I am in piles of debt because of my reckless spending habits. I wish I had known about prepaid cards sooner!

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  • I got a $100 VISA prepaid card and will never get another. I wanted to find out the balance available, tried online with no success, tried by phone and each time I called to check a fee was charged, I lost most of the card in fees.

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  • I’ve always lived a little “beneath my means” and this has boded well over the long haul. Back in the day, my family didn’t have much money, so maybe that helped me control my spending. I had to! But I’m no tightwad; I enjoy shopping and spending. I have to say, the Visa Prepaid card is a great idea for managing the spending of a college student.

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  • Prepaid is a great option. Many of us, like myself, have to learn the same way you did though….through trial and error. Credit card companies know what they are doing and do it well, shame.

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  • I like prepaid cards, they can keep a spendthrift, out of trouble. They are also a good way to be introduced to credit and how to manage and handle it.

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  • It is certainly a slippery slope to tread on. Fear not, you’re more like the majority, rather than the minority on this one. We live in a I WANT MORE world & credit card companies are only too happy to oblige. Honestly, I think they darn well KNOW that more than half the people that obtain a card are not going to keep up their end of the bargain on their own. But, they ALSO know, that as a large corporation, they have the financial backing to hunt us down, harrass us to no end & take us to court to get their money. They know they’re going to get their money. It may not be in the form of our monthly payments, but get it they will. Oh, & we’ll pay the court costs for that too. We DO need to teach our children about money & how it REALLY works in the REAL world.

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  • Credit cards and full time college students with or without a job is a bad combination. You have some great advice.

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  • pre paid is much better. we dont use credit

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  • Prepaid/Debit – spending only what you have cashwise.

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  • Oh, boy, you hit the nail on the head. My daughter did the same thing when she first went off to college. She is JUST NOW starting to whittle away the debt, and maybe, just maybe, by the end of the year, she will have her debt paid off. She says she is going to keep her Victoria’s Secret card, her Kohl’s card (both of those she manages very well), and ONE Visa card, and only use it in extreme emergency. She did just like you did and says she would never do that again!. I think the prepaid card is awesome. They can still be “cool” because they have a VISA, but they don’t have the ability to run it up into the thousands.

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    • I’mg glad she’s learning!! Or learned. It’s hard.

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  • I love the idea of prepaid credit cards. We use them for online purchases. They also help with budgeting, no spending more than you have.

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  • We don’t have any credit cards, except for our debit/credit card from bank. We believe living in our means, and not being in major debt. Granted we owe on house and car but other than that no other debt.

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  • Credit cards are very dangerous! Prepaid cards are much better

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  • I learn from every idea you wrote. Thank you for all the great tips and ideas.

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  • I did the same thing when I started out on my own. I really wish the credit card companies would not target college kids, but that’s probably a pipe dream.

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    • Some I signed up for because the card was fun colored! Seriously!

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  • I totally agree that parents should be doing more to teach their kids about finances and debt, and I think the parents also need to be taught and know more about debt so they can actually pass on good information to their kids. When I was a kid my mother made sure to teach me about money, and even had me make a budget for myself, and even though I had a small allowance (comparatively to other kids that I knew) for doing chores (and I didn’t get that week’s allowance unless my chores were done and inspected) I still used a budget and was able to apply that knowledge as an adult.

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  • Thank you for all the great tips and ideas! This is very helpful information especially right now that I am on Maternity Leave and it’s mostly without pay!

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  • after years of being in financial debt myself now i gave all my teenagers a prepaid card this is such a helpful and teaches them responsbility thanks

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  • First of all, what a great article!! I also grew up without handouts. I had my first job at 12 years old and have worked ever since. A pre-paid Visa card is a great way to teach our kids to spend money and monitor them. My son is only 13,but does odd jobs for neighbors to make his own money :)

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  • I didn’t get my first credit card until I was married…. I was able to keep up with my purchases and paying off the balance regularly, until we divorced. The purchases made just before our divorce were left for me to pay…and on the wages I had at the time, was impossible. So I got caught in the credit card trap. When I finally got out… I cut up all my credit cards and have never had another one since!!!

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  • I can’t even imagine having had a credit card before I had a full-time job. I would not let my kids have them or get them unless they were the pre-paid kind where they had to pay BEFORE they spent.

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  • Applying for multiple credit cards can also affect their credit rating by lowering it, even if they are paying for it responsibility. After graduation when they want to apply for something like a car or home loan, all of those credit cards may actually work against them even if they don’t have a great deal of debt. Much better to have a prepaid Visa card until they are earning a steady salary.

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  • I think this is a great idea. It teaches the responsibilities of a credit card without the financial damage. I will use this option for my child who is going off to college next year. Thanks for the article.

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  • I had something similar happen when I joined the Air Force. Suddenly, they were throwing credit card offers at me. I was 19 and stupid and I applied for everything. Fast forward 4 years and I was out of the military, my marriage ended and deeply in debt. I had to file bankruptcy and I lost everything. That was almost 20 years ago and I have never applied for anything on credit ever again. I can happily say I have no debt other than medical bills.

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  • I too am digging my way out of much credit card debt. It is not easy, especially after being laid off from my job last year. Prepaid cards are the way to go with curbing your spending.

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  • Lol, love that all you got was the freshmen 15 + 15. ;) I was horrible about money as a young adult too. I’m hoping I can teach my children these important lessons along the way so they’ll do better than I did!

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  • We have worked hard to teach our kids to be responsible with their money. We got out son a debit card at 16 years old and made sure he understood how it worked. I think prepaid cards are a great idea for kids starting out.

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  • I love prepaid cards, I got into some credit debt just out of high school. I finally got it all taken care of.

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  • I like prepaid cards too because there IS a stopping limit and prevents debt. Thanks so much for sharing this information!

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  • I got into debt in college too, although I didn’t party & it was just because I worked full-time but still didn’t make enough to cover my cost of living. Still, it sucked really bad & I plan on making sure my son knows how to be smart with money before he’s off on his own!

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  • First I laughed at your small town in NH comment because I too grew up in a very small town in NH (Hillsboro, if you know it) and it was very difficult to find a job, one because there was not much there and two because you had to get your parents to drive you there.

    Second, my college years were a disaster moneywise and my adult years are still trying to catch up. I found that I was ill perpared for managing money and was enticed by credit card offers and get it now pay later aspects. That and I have a crazy amount of student loan debt which I will likely be paying off forever. I am hoping that my experience will help me teach my children better lessons about money then I was taught growing up and hopefully save them some of the heartache I have had to and still am going thru.

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  • A prepaid card is such a great idea, especially for young people who tend to over spend. Credit cards can really take over your life if you let them.

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  • The pre paid cards are okay, myself I would open them up a checkings acct. and give them the debit card, set up on line banking. so they could always see how much is in there. Vicki

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  • Oh friend, I can relate to this so much! It was my freshman year of college that did me in too! So depressing, I only recently finished paying off all of my debt in full. It’s sad to spend so much on credit and have nothing to show for it years later when you are paying it off! Pre-paid cards are a brilliant idea! Thanks for getting the word out there!

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  • I had this bad habit for a while and took a long time to break. I really think things like a prepaid visa card is a great option for those learning to control spending.

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  • I think Visa Prepaid cards are really good to use for the college student. It is true about getting credit cards and racking up a large bill while in college! Not a good way to start a life after getting out of college. College debt and a credit card debt is terrible way to start a new life!

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  • I really think a pre-paid card will help students control spending and perhaps plan their purchases more strictly.

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  • I agree…no credit cards. my college age daughter gets them all the time. and we do not even ask her..we just tear them up.

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  • Prepaid is the only way to go, wish they were around when i was younger.

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  • I am trying to teach my daughter about the credit card trap. You’d think, with me, the cheapo, for a mom, she’d learn. But no……

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  • I’d choose a prepaid over a credit card any day, especially when it comes with my kids when they get older. My debt was pretty out of control for a bit and thankfully my husband (boyfriend at the time) helped me with budgeting and not spending as much. This is definitely something we’ll do when my kids are away for school or even when they get in high school.

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    • I am glad to know I’m not the only one who has struggled!

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  • i think a prepaid card is a good idea! I was lucky and my mother taught me well and I have done pretty well so far :)

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    • Glad to hear it! I guess I”m the only one who was clueless. Or stupid ;)

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  • I think using prepaid cards is a great way to help your kids out and still keep tabs on where the money is going, so you can provide gentle guidance (or, you know, threats of getting cut off) when needed.

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  • Oh, I’m so glad my parents taught me well before I went off to college on not to fall into the credit card trap. That is such an easy time and prime target age! I love the prepaid visa card idea. You can keep track of where you are spending your money the most and adjust your spending habits. Plus you can’t go into a lot of debt.

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    • Yes, I’m a walking ad for how easy it is to get sucked in!

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