Experts offer students advice on saving, investing

For Noah Katcher, a junior marketing major, it is difficult to budget his money while in school. He said the College of Business Administration has not yet taught him strategies for saving and investing. 

“If I am being honest, I have not yet learned any important tips from the business school about investing or saving,” Katcher said. “I have not learned any real-world values about budgeting so far. I will likely just learn these skills over time with the help of my family.”

Some Pitt students believe that they have not learned financial wellness in classes sufficiently. To fill in the gaps, experts at Pitt and Citizens Bank provided students with helpful tips on budgeting and saving to set them up for financial success.

Avi Patel, a junior neuroscience and business major, said although he took two accounting courses, they related to the professional world and not his personal life. Because of this, he was forced to learn how to save and invest on his own through personal ventures. 

“I do not budget my money using a spreadsheet or anything like that,” Patel said. “But, I do budget my money generally. I automatically deposit $50 into my savings account with any deposit that I make into my bank account. I don’t have a job right now, but I work as a barber on the side and I use that money as my spending money.”

Gaurav Kankanhalli, an assistant professor in finance, said he advises that students start saving early and that most investors should keep their portfolio diversified at all times. He said that one should not be overexposed to particular companies, sectors or even asset classes to keep their portfolio diversified. 

“Compounding is a powerful force, and especially so in the high-interest rate environment that we are in right now,” Kankanhalli said. “It is important for young investors to maintain a long horizon. Such a perspective is particularly important in times of greater market volatility, as we are experiencing right now.”

Learning how to start budgeting can often be intimidating. Andrew Washburn, a clinical assistant professor of business administration, said it’s important for students to adopt the “early and often” approach to saving. He recommends students treat savings as a primary obligation, rather than something to do with money that is left over. 

“It is extraordinarily difficult to save while in college, in fact, most students face the opposite problem — how much do I have to borrow?” Washburn said. “My best advice to students while in college is to cut spending, even if only by a little. Cutting spending by $25 per week while in the borrowing mode is just as good as saving $25 while in the earning mode. Cutting spending now means a slightly lower loan amount to pay later.”

Sophie Flink, a junior media studies major, said she has additional expenses since she is an out-of-state student. Fink said as an out-of-state student, a lot of her money is budgeted for traveling between home and school. Fink said she’s struggled to find reasonably priced flights to New York under $150, even when booking months in advance.

“I think that I will be financially secure after graduation, though I do plan on moving back home to save my own money as well,” Flink said. “I think Pitt plays a role in that by helping me get a job that will support my financial well-being, but, I do not think that Pitt is teaching me how or what it means to be financially secure.”

As an in-state student at Pitt, Katcher said he spends most of his money on rent and groceries throughout the year. 

“Some other financial stresses include eating out at restaurants and paying utility bills,” Katcher said. “There are accessible scholarships, but you still need to take out loans if there are money problems.”

Patel also said the University has not helped him with financial wellness, especially for families with two kids in college. 

“My brother and I are both in college here and our aid was not adjusted accordingly,” Patel said. “I will likely not be financially secure after graduation due to the loans that I will be paying off. Pitt has definitely contributed to that with tuition costs. Scholarships are fairly available but are still not emphasized publicly too much.”

Mark Rendulic, Pittsburgh market executive at Citizens Bank, said they offer student checking accounts with no minimum balance to maintain, no monthly maintenance fees, zero overdraft fees and 24/7 online and mobile banking.

“The best advice is to start with a plan,” Rendulic said. “When you’re young, you should think about what you want to achieve financially in the next five years and then put a plan together to accomplish it. Start saving for retirement on day 1 of your first job out of college; enroll in the 401K plan, max it out, and don’t touch it.”

Washburn said the University should expand its view of financial aid beyond creating packages that cover tuition, fees and living expenses to make sure that every student has an understandable, accurate and written schedule of their repayment obligations. 

“Pitt’s biggest obligation, given its heavy reliance on loan proceeds to fund its tuition budget, is to make it crystal clear to every borrowing student exactly how much they will owe in total, how much they will have to pay every month, and how long they will be paying,” Washburn said. “We have traditionally said that only the borrower is responsible for understanding the terms and implications of borrowing, but for many people, loan terms are quite opaque and the pressing need for immediate funds seems to negate the relevance of the loan terms.”