This article is for the college student looking for tips to help with the cost of school. The cost of college continues to climb year after year. It’s made going to school difficult for some and impossible for others.
As a new college student, you probably have more responsibility for managing your money than you ever have before in your life. Up until this point, your parents have been overseeing your finances. Now you are on your own and you may not know what to do.
You need to look at this experience in a positive way. This can be an empowering time that gives you the opportunity to set good habits for a lifetime. With the smart money management tips below, you’ll be able to make the right choices to stay on top of your finances and spend and save wisely.
Learn How to Make a Budget
There is no way around it – people that win with money learn how to make and adhere to a budget. It’s the number one financial tool that will bring success with your finances. Without it, you will be more likely to overspend, have less to invest and be more likely to end up in debt for emergencies.
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The easiest way to approach your budget for college is probably to look at one semester at a time. Figure out how much you have in student loans, savings, scholarship money, and any other cash you have coming in. Then, look at the regular, fixed expenses that you have such as rent and a meal plan if you’re eating on campus.
As a new student, you won’t know exactly how much you’re going to spend on other things. However, try to make a good estimate. Get an app that helps you track your spending or do the tracking manually so that you can create a more accurate picture.
Figure out how much you can assign to each category and break that down into weeks. This tells you how much you can spend weekly on such things as food and entertainment. Make sure that you don’t forget about infrequent or one-time expenses, such as textbooks or clothing.
Getting a Credit Card
This can be a good time to apply for a credit card because you’re probably getting offers for the first time in your life. If you use your credit card for some of your expenses and pay off the balance in full each month, you can start to build a healthy credit history. In theory, this will help you later when you want to borrow money.
A credit card can also help you out in emergencies if you don’t have a cushion set aside for them. It’s important to make the right decision about what kind of card you need. You can do that by reviewing the different types of cards that are available to you.
If you choose to get a credit card, manage it well. They should never be used as a license to spend on anything you want. Unfortunately, that is what traps many people and sinks their financial health. You can manage life and minimize the debt risks by using a debit card or cash for purchases.
Keep Looking for Scholarships
Don’t assume that you’re done looking for scholarships just because you’ve started school. There may still be some out there that you’re eligible for but unaware of. Additionally, you might become eligible for others as you progress through college. There might be some that open up for juniors or seniors who are studying in a particular field. So keep your eye on opportunities.
Work Part-Time
While your focus should be on academics, working part-time can be empowering. It gives you your own money to spend. It helps prepare you for getting your first job after college.
In addition, if your employer offers a retirement account, you can start putting money away in it. Retirement might sound impossibly far off if you’re 19 or 20. However, this is a terrific chance to get started in investing if you have money that you will not need in the next five years. If you leave the money that you put in there alone, compound interest means it will grow exponentially in the decades ahead.
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Reduce Debt
Focus on keeping your debt low. First and foremost, this means not running up your credit card debt. Of additional great importance is only taking out as much in student loans as you need and keeping an eye on the interest rates of money that you do borrow. If possible, try to start paying off your student loans while you’re still in school.
Some will need every dime to put toward their education and cost of living expenses. If you are able to pay a little bit, it can help you graduate owing less. Student loan debt is often considered good debt because of the lifetime value of a college education. However, taking out large amounts of it can cripple you for decades. So it’s still something you need to pay off as quickly as you can.
Leave a Comment or Answer a Question Below: What other advice would you give to a future college student about the financial issues surrounding college? In the long run, was taking out a student loan a good or bad decision for you? Did you get your first credit card before college, during college or after college?
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