As you begin the next step in your journey of life as a college-bound freshman, you will face many temptations and challenges along the way. Learning to manage your finances effectively in college sets the tone for a lifetime of responsible financial decisions. These tips will help you keep your finances organized and eliminate your need to call home for cash.
Financial Tips for a New College Student
You have finally made it. Now, you are out on your own and have no one to answer to but yourself (unless you have roommates to contend with). Whether you live in college dorms or have an apartment off campus, one of the most important things you must learn to do is manage your money.
The tips below will help you keep your budget in balance and make sure you do not need to go hungry to make ends meet.
- Create a realistic budget. Your budget needs to include living expenses (i.e., rent, utilities, gasoline), food, and entertainment. It must be something you can live with — and stick to.
- Establish financial limits. Give yourself a little wiggle room in your budget for fun: things like eating out, new technology, or an amazing shoe sale. It’s important to have some flexibility in your budget – with limits.
- Live cheaply. Learn how to take advantage of things like student discounts, buying used books, or shopping for second-hand clothing and furniture. The less you spend on necessities, the more you have left over for the college experience.
- Get a job. Not only does having a job help expand your limited budget, but it also teaches you the value of budgeting your time between work, class, studies, and fun. This lesson will carry over into your life beyond college as well.
- Exercise caution with credit. Credit card opportunities abound on college campuses, and everyone is willing to extend that first touch of credit. However, then the bill comes. Also, late fees and high-interest rates can spell trouble by causing you to drown in credit card debt. It can be a painful lesson for those who do not approach credit cautiously. Strive never to carry a credit card balance and always pay the bill before the due date each month.
- Use technology to help you manage your money. There are all kinds of apps you can download to your phone to help you manage your money more wisely. In addition to the variety of apps, you can set up text alerts to notify you when your balance dips below a certain threshold and to remind you to pay key bills each month.
- Automate savings. There are few habits more essential to develop than a habit of saving money. There are many ways you can automate your savings so that when emergencies arise, you have a cushion to help soften the blow.
- Cook and eat at home. Whether you are in a dorm or apartment, there are a variety of meals you can prepare for yourself that will cost much less than dining out. Not only do they save you money on the meals, but also on gasoline and the time it takes to get to various restaurants.
- Build credit during college. While you must exercise caution with credit cards, building credit by opening credit accounts and paying them off on time, can help you establish a credit history to serve you better when you apply for a mortgage later in life.
Following these tips might not make you wealthy beyond your imagination, but they will help you live within your modest means as a college student while preparing you for life after college when you must learn to live on a budget then too.