If you’re a college freshman living away from home for the first time, you’re probably taking a course you didn’t sign up for: money management.
You won’t get academic credit for it, but learning skills such as budgeting, choosing the right financial services, and smart credit card usage will benefit you long past graduation.
If you’re like most college students, you need to keep an eye on your spending. You can do this by making a budget with pencil and paper, a spreadsheet or an app.
First, list your income: It’s likely some combination of savings, cash from your parents or a part-time job and financial aid in the form of scholarships, grants or loans. Then list your expenses, such as tuition, room and board, supplies, laundry and transportation.
Use the amount left over after you’ve taken care of your expenses to cover food outside your meal plan and entertainment. Set a weekly allowance and hold yourself to it.
You can also save money – and avoid debt – by using public transportation or ridesharing instead of maintaining a car. Consider borrowing books or buying used copies instead of new ones at the campus bookstore. And take advantage of student discounts whenever possible.
Knowing your banking options:
Many people still work with traditional banks and credit unions, but there are also online alternatives. And even old school financial institutions build apps that let you track your accounts and transfer funds.
You can also download apps that let you analyze multiple accounts at different institutions, such as Level. You can find a list of some other personal finance apps here.
Having good credit can give you access to more — and more affordable— rental properties, car loans and insurance. Using a credit card responsibly is a relatively easy way to build it.
If you can’t qualify for a credit card, either because you’re too young or because you don’t have enough credit history, you still have options. You can get a secured credit card, become an authorized user on a friend or family member’s card or find a co-signer willing to cover for you if you default on a payment.
A credit card can give you short-term, interest-free financing – assuming you pay the balance in full each month. But paying only the minimum causes you to run up debt and interest charges and will hurt your credit. Treat credit cards as you would a debit card or cash.
It’s always important to be careful with your money, not just when you’re in college. If you establish good habits early, you’ll be in excellent shape as you graduate and start your career.
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Posted on Mon, October 3, 2016
by First State Bank