College is starting soon. Whether you are a freshman, a senior or a graduate student, financial choices you make now can have long-term consequences. While you should know all these things before you even go to college, it’s better late than never to learn and follow them. Here are 9 money tips for college students:
- Budget, Budget, Budget: You can’t continue to live like you did when you lived at home. It’s expensive to eat out, you have to pay rent, buy your own food, and pay for everything you need. Create a spending plan and stick to it! Know what’s coming in and going out every month. It’s also a good idea to use the envelope system. When the cash in the grocery or eating out or whatever envelope is gone, you have no more money to spend on that category for the rest of the month. You can also use your cell phone to keep track. There are lots of free apps out there you can use to track your spending.
- Student Loans Aren’t Free: Someday you have to pay back all the money you borrow. Only borrow what you really, truly need. Cut costs on books, housing, wherever you can. Live like you are broke. Because, you are! Don’t spend student loans for new clothes, your social life or for spring break. That’s what a job is for. Also, look for and apply for any scholarship you can. There are a lot out there and they aren’t just for freshmen. Be diligent in looking for them and don’t be afraid to apply for all that you qualify for.
- Use Credit Cards Responsibly: Because of the Credit Card Act, credit card companies are more restricted in bombarding college students on campus, but they still try to get new, young customers. If you are under 21 years old you can only get a credit card if you a) have an adult co-signer and b) have proof of sufficient income to pay back the debt. The average credit card interest rate is 15%. Those 0% introductory rates are a teaser rate and do not last. If you want to get a credit card to build credit, you can be an authorized user on your parent’s credit card, or get your own by following the above rules. However, only use it sparingly and pay it off EVERY MONTH. Carrying a balance doesn’t get you good credit. Paying it off every month does.
- Maximize Classes/Minimize Time: Take a full course load every semester so you graduate faster. Go year round, if possible. Also, on those days you are tired and considering skipping class? Think about how much that class cost you. Literally figure it out. Total tuition / total credits taking that semester x number of credits in that class + cost of textbook and other class expenses = total cost of that one class. NOW do you really want to stay in bed, miss class, and throw that money away?
- Save on Textbooks: Read this article on ways to save on textbook costs. Don’t pay full price at the college bookstore.
- Get a Job!: Preferably one that is flexible and allows you to do your homework when you aren’t busy. (Yes! There are jobs like that available!) Some on-campus work-study jobs can also be launching pads for your future career, so have good work habits. Also, if you make enough money you could start paying off student loans before you graduate. Now that is definitely a win-win situation!
- Consider Transportation Costs: Cars are expensive. Gas, maintenance, insurance, registration, parking. Possibly a car loan to pay off. Instead, consider public transportation or ride sharing. Live near campus and walk. It really is healthy for you, physically and financially!
- Take Advantage of Student Discounts: Local businesses, restaurants, Amazon Prime membership, computer & software companies–many of them have student discounts. And not all make it obvious that the discounts are available. Do your research, especially before any big purchases, like a new laptop, and find out any student discounts available. And it never hurts to ask retailers if discounts are available with a student ID.
- Find the Right Bank: Find a bank that works with your college situation. Do they have free ATM’s nearby, or reimburse you for out-of-network ATM’s? Low balance requirements for student account? Also it helps if they have remote deposit, online bill pay and person-to-person payments. Make sure your parents have easy access if you rely on them every month to make ends meet.
College is expensive. But if you are wise with money management and live frugally, you won’t graduate with massive student debt. As a plus, you set the foundation for smart budgeting and spending habits that will follow you throughout your life. And that will be one of the best things you will learn from college.