The art of juggling isn’t a prerequisite for attending college, but maybe it should be. A typical college student has a lot of competing demands. There are classes to take, homework to plow through, laundry to wash (or throw under the bed)… the list goes on. And then there’s the challenge of managing your finances!
Unfortunately, many college students learn about personal finances through trial and error. But learning the hard way can lead to major credit card debt and damage to your credit score. A more proactive approach could save you a lot of financial agony in the long run.
Here are some tips for learning responsible money management and paving the way for a bright financial future:
1.) Get a job before college starts. Working through the summer will allow you to start saving. Having a nest egg already established when you start college will allow you to buy necessities like books and laptops, and will also give you the freedom to make occasional splurges like buying a new outfit or going out to dinner.
2.) Work during the school year. If you have a summer gig that will be winding down come fall, keep your momentum going and your savings on track by finding another job for the school year. Whether you find your own employment or seek out a federal work study job, putting in at least a few hours each week will help your bank account, and provide you with work experience to add to your resume. There are usually job opportunities available both on and off campus, so transportation shouldn’t be an issue.
3.) Open a savings account. If you don’t already have a savings account to put your hard-earned dollars into, you should look into opening one. If you can, try to find an account with a competitive rate, so you can start earning interest on the money you deposit. It’s also a good idea to seek out an account with little or no fees. Some banks even offer savings accounts that are specifically designed for college students. Just be sure to look over your options and choose an account that’s a good fit for you.
4.) Consider a debit card. Most financial institutions will offer you a debit card when you open a checking account. It works similarly to writing a check. When you make a purchase with a debit card, the funds are pulled directly from your bank account. Debit cards can also be used to make cash withdrawals from an ATM. While debit cards are convenient, it’s important to use them wisely. If you overdraw your account, you could end up paying high fees. You should always keep track of how much money you have in your checking account. Luckily, with online and mobile banking, plus text reminders and email alerts, it’s easier than ever to stay on top of your account balance.
5.) Use credit cards wisely. Debit cards and credit cards might look similar, but they’re very different. When you make a purchase with a credit card, you’re essentially borrowing the money. If you don’t pay the entire amount back before the end of your grace period, you’ll be charged interest. In other words, if you don’t pay off the balance on your credit card each month, you’ll end up paying a lot more than you need to for the purchases you make. Using a credit card responsibly by making on-time payments and keeping your balance below 30% of your credit limit can be a good way to build a solid credit history for your post-college years.
6.) File your FAFSA annually and on time. The FAFSA, or “Free Application for Federal Student Aid”, is your lifeline to funding that could help you pay for your college education. Financial aid commonly takes the form of both grants and loans. The FAFSA application can be somewhat daunting and complicated, but there are many resources available to help you with the process. And it’s important to note that FAFSA forms need to be submitted annually, otherwise you could end up leaving a significant amount of money on the table.
7.) Apply for scholarships. Scholarships can be another excellent source of financial support. It might require writing some essays or filling out some additional applications, but the payback could be substantial.
8.) Come up with a budget. Creating a budget might seem intimidating, but it’s not that hard to do. It’s just a matter of figuring out how much money you have coming in every week or month, and determining how you will divide that income between your expenses and savings. The key is to map everything out and then actually stick to the budget as closely as possible.
9.) Consider living at home. If your parents will have you, it might be worth considering remaining at home and commuting to classes instead of living on campus. Doing so could save you a lot of money on room and board. And if you’re afraid of missing the “full college experience”, you might consider living on campus during your first two years and then moving back home for the remainder of your college career. Saving yourself two years of room and board expenses is nothing to sneeze at!
10.) Ditch the car if living on campus. If you end up deciding to live on campus, you could save some big bucks by not bringing a vehicle with you. Think of all the money you could save if you didn’t have to pay for gas, repairs, or car insurance. There’s always public transportation or Uber if you really need to get somewhere, and many schools offer shuttles or other forms of off-campus transportation for students.
11.) Get roommates. If you won’t be living at home, consider getting roommates to lighten the housing cost burden. Living off campus is typically much more affordable if you have one or two roommates to split the rent and utilities with. And if you’ll be living in a dorm on campus, volunteering to live in a triple room instead a double could potentially save you on your room and board.
12.) Rent text books or buy used ones. Why pay top dollar for a book that you’ll only need for a few months? By foregoing brand new books in favor of used or rented ones, you can save quite a bit. And many textbooks come in electronic versions that are cheaper than their physical counterparts. Websites like CampusBooks.com can be good resources for finding the books you need at a cheaper price than your campus bookstore.
13.) Take advantage of student discounts. There are likely to be many stores around your college that will offer you a discount by simply showing your student ID. And you can find online deals for college students just as easily. Websites like UNiDAYS.com can help you locate student discounts, and websites like ValueColleges.com can help point you toward student discount mobile apps to make deal hunting even easier.
A college education is an amazing opportunity that can help pave the way for your future career. But it’s important to remember that financial preparation is just as important as your academic pursuits. By taking some time to establish responsible money management habits as an undergrad, you’ll be in a great position to effectively manage your finances post-graduation.
