If you are in college, then you are a start up company—a new business. I don’t care about your age, what you have done before college, or what you will be when you are out of college. While you are taking classes, you are in start up company mode. If you get through this section and decide it really doesn’t apply to you, congratulations on being independently wealthy and foolish with your money. The biggest challenge for most start-up companies is money. Usually, they don’t have a sufficient amount and, even if they do, they probably aren’t making a profit. Most new businesses do not show a profit for something like five years, just about the same amount of time you will be in college. Business culture has a term for when a business is spending money without simultaneously taking any in. They call it the “burn rate.” The more a company can slow its “burn rate,” the rate at which it is burning through money, the better its chance for survival. Same goes for you.
Your financial goal in college is to get through it with as slow a burn rate as possible. This is one of the key similarities you possess with a real start-up company. Unfortunately, college is far from free and getting farther away from that ideal every day.
The average tuition at a private school is a little less than $27,000 a year. The average tuition of a state school is slightly less than $7,000. That is just the cost of attending college. Not included in this figure are additional living expenses (room and board) which can include rent, food, car, cell phone, books, a computer, travel expenses, medical, and other supplies . . .