Image Credit : iChaz

I started thinking about how I spent money after starting coming to U.S. and thought it would apply for most of the students. It was quite amazing, when I think about how the spending habits changes over time. first 3 months at school, I was spending $250 per month including rent, groceries,.. but over period of 3 years, I could see dramatic change. Having credit card in hand changes perspective on money in negative way.  Here’s the time line on how spending habits change over time in U.S.

First 3 Weeks in U.S

Mind calculator will be always at work. Any time you see some product will be multiplied by Rs.50.( India) Yes, it was Rs 48.50 per $ when I came to U.S. First week, I went to Walmart and total bill was around $48 for 2 weeks of groceries.

Second time I went my roommates and it was around $100 and used to wonder, Rs 5,000 would we get so many stuffs that would be useful for more than a month. If you don’t have part-time job, financial aid or scholarship, then for first few months you will hold yourself back from spending. So, average monthly spending for first 2-3 months will be at very minimum.

After 2-3 months

You will have SSN and a student credit card with some $1000 credit limit and slowly the mindset will get adapted to U.S. Dollar value. We won’t feel the pain of paying the credit card until statement comes. Till then anything we buy is free, because the money virtual. We don’t get to see the money. It’s in bank account, we pay using credit card, and when statement comes, money from bank account is transferred to Credit Card account.

Credit cards will be used in all places, many small purchases charged to the card will add up to big sum. Usually, it’s $3 at McDonalds, $5 at Taco Bell, $7 for movie kind of things will add to huge amount. You will be surprised to see how you had spend when the statement comes. You will wonder, if I have a small part time job for 10 hours in a week that would give me some $200 - $300 to pay my groceries and part of living expenses. That’s the phase, when every student will feel the value of money. Exhausting the bank balance money (student loan, parents income, ..)

After 1st semester

Now, you should have found a job( part time, or financial aid, research assistansship). Unless you control yourself with the excitement of getting a new job, your first pay check will be already spent before you realize.

Its very simple, for many months, you will be living within budget, controlling your spending. After, you get a job, first thing will be happy relaxed feeling. You will put some mental calculation, on ho much you will earn per week, per month, for 6 months. All long awaited dreams of having a nice digital camera, at least weekly once buffet at Indian Restaurant, Ipod, … will come into mental picture. Next thing you know would be

Buy Cell Phone ( now a days, its becoming essential)

• Ipod and Iphone
• Dine out in restaurant daily
• Visit deals2buy and edealinfo daily looking for new gadgets
• New pair of shoes every month
• Subscription to Netflix
• Buy X-box or Wii
• Flat Screen TV sharing the cost with roommates
• List never ends

So, that would be your first pay check money already spent.

Now having used to little lavish life style, it will be little difficult to go back to other life style. Next step would be to apply for new credit card, and what would happen at the end? Big balance in the credit cards, lots of balance transfers will go on…

How to avoid student credit debt and some nice ways to keep students finances under control, will be in next post.