Timeline – Students’ Spending Habits in the US

How do students spend money in the U.S.?

It’s actually quite amazing when you think about how the spending habits of students change over time.

For the first 3 months of your stay in the U.S., you will be spending at the bare minimum for every expense.

But after 3 months, you could see changes in your spending habits.

Having a credit card in hand changes one’s perspectives of money.  Here’s a time line on how spending habits change over time in U.S.

The First 3 Weeks

Your mental calculator will be always at work.

Anytime you see some new products, you will be “automatically” multiplying by Rs.50.

Most likely, some of your seniors or friends will take you to Walmart or nearby major retailers for shopping.

When I went to Walmart for the second time, my roommates and I spent around $100.

I was amazed to see my grocery bill to cost so much!

For $100, we would already buy so many stuffs back in India.

If you don’t have a part-time job, financial aid or scholarship, for the first few months you must hold yourself back from spending.

So, the average monthly spending for the first 2-3 months will be at the very minimum.

Because you don’t have much cash at your disposal, you will likely think twice before making purchases.

After 3 Months

You will have SSN and probably a credit card with around $1,000 credit limit.

This will be the moment when you will start feeling comfortable with the U.S. Dollar.

Your mindset will then get adapted to the value of the U.S. Dollar.

You won’t feel any pain when paying the credit card until the statement comes.

Money becomes virtual.

You don’t carry cash in hand or in wallet.

It’s in the bank account.

You’re using credit card or debit card.

When the statement comes, money from your bank account is transferred to your credit card account.

You will start using credit cards everywhere you go.

  • $3 at McDonalds
  • $5 at Taco Bell
  • $7 to watch a movie

All these small expenses add up.

You will be surprised to see how much you have spent by the end of the month.

You will wonder, if I have a small part time job for 10 hours, I can earn from $200 to $300.

$300 is lots of money. You can pay for groceries and part of your living expenses.

That’s the phase when every student will become aware of the real value of money.

After the 1st Semester

By this time, you should have found a job (part time, financial aid, or research assistantship). Unless you control yourself with the excitement of getting a new job, your first pay check will be already be spent long before you actually receive it.

It is very simple. For many months, you will be living within a strict budget, consciously controlling how you spend your money. But after you get a job, the first thing you’ll experience will be to feel happy and relaxed. You will then make some mental calculations, such as on how much you will earn per week, per month, for 6 months. All those long awaited dreams will become more clearer mental pictures, like having a nice digital camera, once-a-week buffet at an Indian restaurant, an iPod, etc. Next thing you know you’d find yourself about to…

Buy a Cell Phone (nowadays, it had become an essential)

  • iPod and iPhone
  • Dine out in restaurants 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
  • The “List” never ends

So that would be your first paycheck money already spent. Most of the students end up spending with their credit cards and are left with additional $20,000 in credit card debt. At times, this will reach around $45,000 in loans to be paid.

Now, having been used to little a lavish lifestyle, it will be little difficult to go back to the previous lifestyle. The next step would be to apply for a new credit card, and then what would happen next? Students will incur a large balance in credit cards debts, and lots of balance transfers will go on and on…

“How to avoid student credit debt” and “Some nice ways to keep students’ finances under control” will be discussed in the next posts.