Why We Give YNAB to College Students for FREE

This highly-intelligent, extremely-motivated young woman in her late twenties was about to cry. And I had just met her a few minutes before.

I ended up sitting next to her at a fancy business dinner. She was freshly minted at this new company, so I naturally asked her the normal questions: Where did you work before? What did you study in school?

She knew my company. She knew I’m all about budgeting. Not surprisingly (because this happens more often than I care to admit) she felt compelled to share a huge financial “mistake” she had made.

She had loads and loads of student debt. She was single, making good money, with a manageable cost of living, and she was barely getting by because of her student loan payments.

The conversation started innocently enough. She shared with me what she had studied, how she had chosen to get a graduate degree, how she had really enjoyed her education…

Death By Student Loans

And then she almost broke down. Thankfully the rest of the table was busy in their own conversations. I did my best to console her. I wasn’t quite sure what to say. Many times I can give correct answers that sound something like, “As you start really becoming aware of what you spend, your spending will decline.” Or maybe I can say, “Once you start recording your spending on your phone, at the point of purchase, you’ll see your spending align with your priorities, and you’ll feel very content—even at the same income level.”

In this instance, the reality was daunting: a student loan payment larger than rent.

Anyone can use their 20/20 hindsight to point out the mistakes of the past. This young woman was doing that to herself on a daily basis. She really felt she had screwed up. Perhaps she had. But my mind didn’t go there at all. My mind went to the kids just embarking on their higher education. The way things are going, they’re in for a rude, expensive, soul-sucking awakening.

Tuition costs are higher than ever. They just keep climbing. School loans are easier to obtain than ever before. A bachelor’s degree seems to be the new necessary baseline for a career in just about anything.

For kids today, the reality looks something like this:

  • You must obtain at least a bachelor’s degree.
  • School tuition is obscenely expensive.
  • Debt is your only option.

There’s Another Way

I don’t subscribe to debt being the only option, but I do believe that most kids (and their parents) think it’s their only option. As far as I’m concerned, we’re dealing with that reality. Kids think debt is the only way they can finance their required (and expensive) degree(s).

You can talk about going to a community college for a few years, going to a state school, living at home longer, etc. All of those are options. I like every one of them. Especially the one about my daughters staying at home longer. 🙂

You can talk about not eating out as often, buying a super-cheap beater car, sharing textbooks, working your way through college…

Those are all great options. I want these young kids to look at their money, what little they have, and ask themselves, “What should this money do before I’m paid again?”

I want them to deal with scarcity. I want to see their creativity, work ethic, and study habits skyrocket as they solve the issue of their scarcity. They won’t solve it with a mortgage-worth of student loan debt. They’ll solve it with a clear vision of their priorities. They’ll know their priorities because they’ll have worked through Rule One.

They won’t be surprised by larger expenses (tuition! books!) because they’ll be anticipating those expenses as part of Rule Two. They’ll understand their True Expenses and when they’re prioritizing what little they have, they’ll make sure those True Expenses enter the equation.

They won’t look at their bursting (it’s all relative!) checking account balance from their part-time paycheck, and realize they have enough to go out tonight. They’ll look at their “going out” category and realize there are six dollars sitting in there. And they’ll opt to split a five-dollar pizza with their buddies.

They’ll be intentional about their money choices, and those intentions will lead them to a place where debt isn’t their only option. For some, it may fit in with their priorities, but it will fit in on their terms, with their eyes fully open to the consequences.

College Students Need A Budget

I’m convinced we can have hundreds of thousands of students all using YNAB. I’m convinced that they’ll make it through school in far better financial shape than they (or their parents) would have thought possible. I’m convinced I’ll have far fewer conversations like I did with that sweet, stressed-out young woman. It just shouldn’t happen like that; that doesn’t have to be reality.

That’s why we give college and grad students a whole year of YNAB, for free. Sign up here to get your year (poet, didn’t know it), and take total control of your money starting now!

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