PETE: Welcome back to How Not to Move Back in With Your Parents. You’re on the IU MoneySmarts Radio Network. I’m your mildly handsome host, Pete the Planner. But of course it’s radio so you don’t know whether that’s true or not. I am joined by Alex, my buddy. Hello, Alex.
ALEX: Hello, I don’t get a very handsome, mildly handsome introduction, nothing.
PETE: Your voice says it all.
ALEX: There you go.
PETE: Your voice says it all. In this episode we are joined by your friend of the show, Sydney. Hello hello.
PETE: So, the social costs of college is this week’s topic. Here’s what’s interesting. This is the best four years of your life, right? I mean so far it’s gotta feel that way.
PETE: Third grade was probably pretty good for you Alex. You look like you were a pretty solid third grader.
ALEX: That’s actually weird because I had a great third-grade year.
PETE: I can feel it. But other than that college is a great social experience. You get to do what you want. Make your own choices a particular way. But also the financial choices that you make in relation to that could be pretty important. So, Alex, when you think about the social experience for you I know you’re part of the fraternity life and things like that. Do you view that there’s a cost to that, I mean when you think about fraternity life, do you think there’s a financial trade off to that?
ALEX: Definitely, yeah going in you know that also there are going to be social fees and costs that you’re gonna have to pay to be part of it. And that’s something you know and that’s also something that’s going to be outside and maybe different if you’re not in Greek Life. But, you’re gonna have those same kinds of costs.
PETE: Sydney, how about you? When you look at kinda your college experience you had. Was there one set of activities that you had for entertainment purposes and social experience that added the most cost for you?
SYDNEY: Yeah, probably eating out with friends, just kinda finding ways to socialize. And usually that was not in our house. So going out, going to the movies, maybe going to a concert, those add up pretty quickly.
PETE: See, I’m with you. When it was me in college, my food and entertainment and, it all blended together. And I think that’s almost more challenging, I think for people in my situation and your situation. Than it is in someone in Alex’s situation, when it’s more kind of fraternity-life based, that there are extra fees associated with it. I think the interesting part here is there are certain instances that we all know that are gonna cost more money. You’ve got spring break, oddly enough, that no matter how many people are jamming into a terrible hotel room on the panhandle of Florida, it’s still costing you money and I think sometimes that can be a poor decision. Did you ever do the college spring break experience?
SYDNEY: I haven’t yet. I’m actually trying to budget out a plan for this spring so hopefully it will get under control.
PETE: You have no idea what kind of can of worms you just opened.
PETE: All right, let’s put together a budget for spring break, all right?
PETE: May we?
PETE: All right, so do you guys know where you’re going yet?
SYDNEY: No idea.
PETE: Okay, I won’t pick your spot.
PETE: It’s a lovely bed and breakfast, I’m just kidding.
PETE: So but a lot of times what you do is you just figure your room cost for the week, and then you just divide by the number of people that go. Is that kind of what you’re expecting is gonna happen?
SYDNEY: Yeah, that sounds about right. And then how to get down there. Have you done the spring break thing, Al?
ALEX: I have not yet, I’m kind of in the same situation trying to figure out how I can make it happen.
PETE: It is a good thing, it’s just you can’t. First of all I can’t cross over and somehow ruin your opportunity to interview for internships and things going into the summer. Cuz the crazy part is, that’s like the best week on the planet to actually interview for internships because most other people are on spring break and so you’re getting a jump on them and doing an interview before that so.
PETE: There’s a trade-off there. Then it costs to get down and that’s the one that bites everyone. I think when we look at social cost the one that everyone always forgets about it is that the cost to get we’re going to go socialize.
PETE: You know it’s going to be a split few however you want it. It’s going to be a couple hundred bucks to get down there. Alex what other social cost is you think about your college experience? The traditional for some, four year college experience, what are your thoughts on social costs as it relates to that?
ALEX: I think it’s something that everyone knows is coming, but still don’t prepare for. Because as we talked about in week one, when we covered budgeting a little bit, is we think of our finances on a semester basis. We have this much money to spend, let’s hope it doesn’t run out by the end. And we just make purchasing decisions as we go based on how we’re feeling at the time, to be honest. So we talked about how you need to get that budget, and you need to budget it in because we need to be frank here. There are a lot of social costs that’ll come on weekends things like that, depending on what you like to do in your free time. But you need to assign a number to it. People aren’t going to assign parties and budgeting. As something that would come together.
PETE: Well, how about, like so again, you’re part of fraternity life, Greek life, and you look at something like a formal, you know?
PETE: And then, the costs associated with something like, what are you dropping on a formal these days?
ALEX: You could drop a couple hundred bucks on a formal.
PETE: Easy, right?
ALEX: Yes. If they’re going to Nashville, Chicago are two popular cities people have formals in, it’s easy $300, $350 for the weekend.
PETE: And so, like most students, you probably think about that, right before you’ve got to spend the money, not as it’s approaching months out. And Sidney, for you as a senior, I mean you’re talking about you’re having a lot of the feelings of, hey, this is my last go-around. This is the last hurrah, I’ve got nothing to lose. I’ve got to have this experience, and spend this money, and go on spring break, and do that going into being here in your senior year. Are you starting to feel those pressures yet or have they not really kicked in?
SYDNEY: Thankfully, they haven’t kicked in yet. I turned 21 at the end of last semester so that’s kind of a whole other things.
SYDNEY: The bars are expensive and concerts that are 21 and older are available now and they’re very tempting. So the pressure will build pretty quickly, I know.
PETE: Yeah, I mean, here’s the reality. Kind of the trade-off of educating yourself, besides having an education, is that you get to enjoy the social experience. I mean you get to make friends that you will have for your entire life, but you got to keep asking yourself at what cost. I mean are you going to be struggling to pay off student loans associated with your concert going in your 30’s? And the reality is some people actually are dealing with that. And so you gotta kinda make wise spending decisions that way. I think one of the smartest things you can do as college students, is on the first of every single month, is simply ask yourself, what’s gonna happen in the next 30 days that may cost me money? And I think a lot of times there you’re gonna find social activities that you otherwise hadn’t thought of. That you can plan it more accordingly and say, well, I better reduce dining out over these next couple weeks because I know I have this event coming up. I think that can cut off a lot of problems at the pass.
SYDNEY: Yeah, that sounds like a great idea.
PETE: Thank you. Alex, do you think it sounds like a good idea too?
ALEX: Definitely, and you have to be careful too because one of the best and worst things about college is the spontaneity of it.
ALEX: You could be sitting around on the couch one night and all of a sudden something great pops up that you can do but it’s gonna cost $40, $50 bucks and you’re like, I want to do this but I was planning on this and you have to figure out how to balance all that out.
PETE: Do you mean an infomercial is that what you sit around kind of like an easy chop or a quick chop or whatever?
ALEX: Yeah what’s the nut chopper one the guy from sham wow?
PETE: I don’t know is there a nut chopper.
ALEX: He had a rough night we won’t go there.
PETE: Sham wow that didn’t go well. So anyway speaking about going well, if you wanna hear more about these podcasts go to moneysmarts.iu.edu. Of course brought to you by the great people at IU MoneySmarts, this has been yet another episode of How Not to Move Back in With Your Parents on the IU MoneySmarts radio network.