Seniors plan financial futures before graduation

By Christopher DaCosta

As graduation approaches, many seniors will be faced with the prospect of managing finances and debt-levels on their own. While the transition from the life of a student to that of an independent, working individual may be difficult, careful planning can remedy any potential financial woes.

Senior studio art major Kim Lay made this transition early. "I went through all the steps on how to file taxes for the first time this year," she said. "Also, my parents had previously paid for car insurance and credit card bills, but we are now having these switched over to me paying them - when I get a job, I will completely take over all payments of my living expenses."

In preparation for economic emergencies, senior biology major Megara Mabey has set up what she calls an "eight month emergency fund."

"I calculated how much money it would take me to live comfortably for eight months, and then I opened a separate account for just this money," Mabey said. "I contribute to it periodically when something comes along, but I never ever touch this money. I don't even use it for investments, since you never know when an investment will fall in value right when you need your reserves."

In addition to her "fund," Mabey also has a separate system of investments, both short-term and long-term. Mabey has already been preparing for her future by investing some money investing in her 401K. "I had a summer job two years ago and opened my 401K with the money," she said.

Meanwhile, French and OMIS major Matt Sampias thinks of future potential financial troubles as "challenges" to which he can rise to. He likens it to learning how to drive.

"You don't learn on, at least I didn't, a BMW or a Mercedes - you learn on a junker that barely runs, but you learn nevertheless, and then as you get better or more comfortable you are able to handle more expensive autos," the senior said. "I think it will be the same way with finances, you start small at first until you get the hang of things, and then move up as you get more comfortable."

Despite having set up a job for after graduation, Sampias does expect to forego some of his expensive habits for a little while. An avid scuba-diver and pilot, Sampias said that with financial backing from his parents, he was able to pay to for his hobbies.

"I'll have to learn to deal with that until I can gain enough money to support them," Sampias said. "I think, though, that managing my money wonÕt be very different than how most people manage it right now, get a bank account and pay credit cards."

Andy Hagedorn, associate director of the financial aid office, says the most important thing graduating seniors can do is not get into credit card debt. "Learn how to budget," Hagedorn said. "It's very easy to get into credit card debt; it's a matter of delaying the gratification."

Looking back on their experiences, third year law students Michael Immorino and Emily Wang found that getting out of credit card debt was important, especially before paying student loans.

According to Hagedorn, about two thirds of all students will graduate with some sort of loan. Many of those being student loans are just another reminder of their undergraduate days for most students.

While grace periods on paying these loans typically last for about six to nine months, there is way to delay payments in case of dire economic circumstances. "Federal loans have a built-in system called forbearance, say if you are unable to get a job and pay your loan, you can request a forbearance which will give you more time," Hagedorn said.

Hagedorn also recommends looking into investment and putting aside money. "Learning how to invest your money is important, you have to be able to manage for today and also plan for the future," he said. "It can be difficult at times when you have rent payments, car payments, credit card payments and student loan payments."

Creating a nest egg with wise decisions in more prosperous times should alleviate the pain of forking out money every month for the next 10 years, according to Hagedorn.

The financial aid office opens its doors to students with questions about getting their loans and financial aid in order.

Additionally, a "Life After SCU" series provides helpful tips and ideas for graduating students. Coupled with speeches from alumni, the program aims to encourage students to continue using campus resources after they graduate.

Sampias feels that Santa Clara has adequately prepared him for the real world. "I view it as part of life that will be an interesting challenge. I'm ready, bring it on," he said.

Lay, on the other hand feels that she may need help from the "Life after SCU" series.

"I also want to continue to learn about procedures regarding money so that I feel capable in handling my finances," Lay said.

While grace periods on paying these loans typically last for about six to nine months, there is way to delay payments in case of dire economic circumstances. "Federal loans have a built-in system called forbearance, say if you are unable to get a job and pay your loan, you can request a forbearance which will give you more time," Hagedorn said.

Hagedorn also recommends looking into investment and putting aside money. "Learning how to invest your money is important, you have to be able to manage for today and also plan for the future," he said. "It can be difficult at times when you have rent payments, car payments, credit card payments and student loan payments."

Creating a nest egg with wise decisions in more prosperous times should alleviate the pain of forking out money every month for the next 10 years, according to Hagedorn.

The financial aid office opens its doors to students with questions about getting their loans and financial aid in order.

Additionally, a "Life After SCU" series provides helpful tips and ideas for graduating students. Coupled with speeches from alumni, the program aims to encourage students to continue using campus resources after they graduate.

Sampias feels that Santa Clara has adequately prepared him for the real world. "I view it as part of life that will be an interesting challenge. I'm ready, bring it on," he said.

Lay, on the other hand feels that she may need help from the "Life after SCU" series.

"I also want to continue to learn about procedures regarding money so that I feel capable in handling my finances," Lay said.