If you’re like many students, your first year of college brings a lot of firsts. It may be the first time you have lived apart from your family, you control your own schedule and maybe even do your own laundry.
More importantly, it may also be the first time that you are responsible for your own finances. If so, you’ll want to establish smart money management habits to grow financially during your college years.
These three financial tips for college students can help you avoid common pitfalls and pitfalls and achieve financial wellness.
1. Calculate your expenses
You may have financial aid, savings, or family support that covers some or all of your tuition and housing costs. You may also face many other expenses in your first year of college, such as:
Books and supplies Food that is not included in your meal plan Bedroom or room basics such as bedding, towels, cleaning and decorating supplies Gas, car maintenance or car insurance Travel expenses for your trips home from school A phone plan Health insurance and expenses Entertainment and socializing costs
Estimate how much these costs will be so you can create a plan to pay them. If you take a blind step, you and your finances can easily trip and fall. You can also investigate ways to reduce these costs. For example, renting textbooks may be cheaper than buying them. Designing your schedule to eat most of your meals on campus can also help save money. Taking advantage of free or low-cost activities on campus and student discounts at local businesses is another way to reduce your expenses.
2. Track your spending
Anyone who records all their expenses only in their head is setting themselves up for financial disaster. It’s crucial to keep a clear and up-to-date record of what you’re spending money on and when. When you look at every dollar, you’ll see those small expenses that seem to cost almost nothing at the time, like the $4.99 to rent a movie from a streaming service, but can quickly add up to hundreds of dollars during the school year. Otherwise, you may not notice at all.
Tracking your spending also shows how much you need to budget for unpredictable expenses, like a trip to miniature golf for your roommate’s birthday, your car registration renewal fee, or a copay for a doctor’s appointment. It can also give you a better sense of timing, allowing you to spread payments over a longer period and better absorb costs.
You can use apps to keep track of your spending. Many link directly to your bank accounts and can categorize your spending to help you see where your money is going. Two of the most popular are Mint, which is free, and YNAB (You Need a Budget), which is free for one year for college students. Or go old school with a simple printable worksheet that you can complete by hand.
3. Learn about lending practices
Once you turn 18 and become an adult legally capable of managing your finances without parental or guardian supervision, some lenders will take advantage of your inexperience and offer you credit cards or loans with high fees and other dubious terms. New college students are especially susceptible if these lenders offer quick and easy access to money.
But a card that is marketed directly to you may not be the best option; in fact, it may be the worst. It’s wiser to consider whether you really need a credit card, especially if you get a solid financial aid package, including grants or scholarships, that you don’t have to repay.
If you decide to apply for a card or loan, research available cards and loans with someone knowledgeable. With their guidance, compare spending limits, interest rates, penalties, fees, payment options and other terms to find the best option for you. Also, keep in mind that the best loan you can take is the smallest one.
Want more financial tips for college students to help you build a strong financial future? Learn about essential skills for managing your finances in college and understanding and managing the costs of your education.
Posted: October 28, 2022
Source: news.google.com