On top of all the classroom learning, going off to college means learning how to manage your money wisely. We’ve got plenty of ideas to help get you started.
Preparing for college life is super exciting–and more than a little nerve-wracking. You’re looking at a new stage of life that is filled with first-time experiences, academic challenges, and newfound independence. The start of college also marks a significant transition into adulthood, which includes learning to manage your finances responsibly. Use these helpful tips to build good financial habits during college, and you’ll be setting the stage for a secure and successful future.
Create a budget.
Living with a budget is essential for financial wellness. First, track your income, including all earnings from part-time jobs, scholarships, student loans and more. Next, list your expenses, including tuition fees, textbooks, rent, groceries, transportation, and entertainment. Set a realistic spending amount for each category, and your budget is good to go! Make a real effort to stick to your budget, then review and adjust as necessary. Budgeting helps you prioritize your spending, avoid unnecessary debt, and ensure that you’re living within your means. To learn more about creating a budget, visit our FREE Personal Finance Program.
Minimize student loan debt.
Student loans can be a significant financial burden after graduation. To minimize your debt, explore options such as scholarships, grants, and part-time jobs to cover educational expenses. You can also get ahead on your debt by saving for your student loan payments before you graduate. You can set up automatic monthly transfers from your checking account to your savings account while in college. This way, you’ll be prepared to start paying off your student loan debt as soon as you graduate. Learn the basics of student loan debt and find guidance on how to pay off your loans.
You can have your fun while in college, and in your budget, too! First, buy used whenever possible. This goes for textbooks, sports equipment, and even your college car. If you research the item you’re purchasing to ensure it’s in good condition, you’ll save a ton on the price without compromising on quality. Next, consider pooling some of your expenses with your roommates. For example, you can split the costs of food items, cleaning supplies and more. Finally, get used to eating in to generate significant savings. Spring for one or two counter appliances, such as a pizza maker and toaster, and get creative with using them for meal prep. Remember, every dollar saved can go toward your future.
Prioritize essential expenses.
Life in college is filled with temptations and social activities, so it’s crucial to prioritize essential expenses. Ensure that your tuition, rent, utilities, and groceries are covered before allocating money for discretionary spending. You’ll also want to set aside a portion of your income each month for savings and emergencies. By establishing these priorities, you can build a strong financial foundation and avoid falling into unnecessary debt. If you find there’s no money left over for just-for-fun expenses, look for ways to boost your income through part-time jobs or by selling some items you no longer use.
Build your credit.
College is a great time to get your credit score ready for adult life. A strong credit score is essential for qualifying for large loans, obtaining favorable interest terms on those loans, securing a job and more. To build credit responsibly, consider getting a secured credit card or becoming an authorized user on a family member’s credit card. Use the card sparingly and make payments on time, and in full, each month. This demonstrates responsible credit management and will help you establish a positive credit history.
Take advantage of campus resources.
College campuses often provide a wealth of resources to help students manage their finances. Take advantage of financial literacy workshops, counseling services, and career centers that are at your college. These resources can provide valuable information on budgeting, saving, investing, and finding internships or job opportunities. Seek guidance from professionals who can offer tailored advice based on your individual circumstances.
Building smart money habits during college can have an impact on your financial health for years to come – maybe even your entire life! Use these tips to manage your money smartly in college.