Money Management Tips to Learn in College

Money Management Tips to Learn in College

 

With the start of college comes a great deal of freedom but, with that is also responsibility. Aside from keeping up with the academic part of college, students must also grapple with financial concerns, and for many of them, this is the first time they’ve been faced with these issues.

 

 

 

Basic Budgeting Tips


Regardless of your source of income in college, it’s important to create and stick to a budget, so that money woes don’t sidetrack you in other areas of your life.

 

  • Consider using an online budget management tool like Mint.com. College students may have no real sense of where their money is going, but something like Mint will allow you to track your expenses and understand what you’re doing right and wrong. For example, are you spending $20 a day on coffee? You may not even realize where that money is going until you see it listed out for you.

  • Take advantage of checking and credit card accounts specifically for college students. Many banks offer special deals for college kids on their checking account, and it’s a good idea to have at least one credit card in your name, to begin building your credit history. You’ll have to restrain yourself from over-spending, so consider getting a card with a very low limit.

  • Don’t think you have to take advantage of every meal out or social event that comes your way. Often, college kids love spending time at restaurants, the movies or concerts with their friends, but in the real world, you can’t do everything you want to do. You have to make sacrifices, and that’s an important lesson to learn as a college student.

  • Part-time jobs can be really beneficial. If you’re worried about finding time to study, consider an on-campus job—they’re designed specifically for students and are more flexible when it comes to studying, exam time and holidays.

 

Avoiding Future Debt


Along with managing day-to-day expenses, college is the time you lay the groundwork for the remainder of your life, in terms of finances and debt.


For some students, debt incurred during college can stay with them for years or even decades after school ends.

 

  • Explore all the possible financial options before taking out student loans. There are lots of available ways to pay for an education, including scholarships and grants. Look at all of your options before you take out a loan that’ll have to be paid back as soon as you graduate.

  • Before considering a private loan from an institution like a bank, exhaust all of your federal loan options. Private loans can be a pitfall for students since interest rates may be higher, they may be less flexible on repayment options and fees may be higher.

  • Try to start paying the interest on loans while still in school. Many students wait until they graduate to even begin thinking about paying loans back, and then it becomes overwhelming and difficult to dig themselves out of the situation. Start thinking about loans and how to repay them immediately, even if you’re only working at a part time job.

  • Be realistic when you take out a student loan. Look at your career options and decide if the payments are going to be feasible for you when you graduate. For example, if your future career has a max entry level salary of $30,000, it’s never a good idea to take out $80,000 in student loans. If this is the case, you may want to consider a less expensive in-state school, or even a vocational or community college.

  • Don’t use student loans for daily living expenses unless you absolutely have to. It’s tempting as a college student to view that extra loan money as free money, but you’re setting yourself up for big consequences. Take the least amount of money possible when you’re getting loans, otherwise you may be paying interest for that new outfit or that Chinese food you ordered.

 

Ultimately, the way you handle your finances in college can tremendously impact your life. It’s not a time to just throw caution to the wind when it comes to money and debt—instead, it’s the ideal time to learn good habits, smart spending and budgeting, and how to effectively manage your debt.

 

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About the Author:


Dan Cheong studied Computer Science at Purdue University. He opened his own online marketing agency, IIMS, during his last few semesters at college and is now running it full time.

 

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