One of the big challenges you may face as a college student is how to manage your finances. Most students start out with very little financial experience. Even if your parents tried to teach you about money, this is probably the first time you’ve ever had to completely manage it on your own, and that can be overwhelming. It’s important to be smart with money from the start so that you don’t graduate with more debt than you have to or simply find yourself under a lot of stress when you should be focusing on academics. The tips below can help you manage that money better.
Know How You’ll Pay
How will you pay for college classes? Will you use a 529 savings account from your grandparents, a small scholarship, federal aid or some combination of all of these? One issue that students frequently run into is not qualifying for enough federal aid. A great solution for this is taking out a student loan from a private lender. You can typically borrow as much as you need as long as you qualify. On top of these other funding sources, you can also work part-time.
Know Your Expenses
You also need to know what your expenses will be. This includes not just your tuition but the cost of your books and your room and board. Your college may be able to supply some rough figures on cost of living. You can use this information to start with, but if you get a spending app, you can track your spending in the first few months of college and get a better idea of what your expenses are.
Make Your Budget
With the knowledge of what your expenses are and what money you have coming in, you can make a budget. This will be more general at first, and you can refine it over time as tracking helps you get a better handle on your spending. Budgeting is important because it will help ensure that your money lasts until the end of each semester. You can use an app to help you budget or just make a spreadsheet. Be sure that you don’t leave out infrequent expenses, like getting a gift for a friend or getting your hair cut. It may be helpful to build in a small miscellaneous cushion for each month. Your budget will also highlight tips to save money while shopping because it will force you to figure out how to get what you need at a price point that you can afford.
Be Smart with Credit
Credit cards can be good to have for a few reasons. You can use them in a real emergency. Used responsibly, they can also get you some great rewards, including cashback or points on hotels and other benefits. However, they can also be very bad for a few reasons. If you’re not responsible about your use of credit, you can find yourself deep in debt very quickly. It might just seem like a meal here and a pair of shoes there, but if you can’t pay off the monthly balance, interest rates can mean a small balance quickly becomes a good one. Only have a card if you’re sure you can use it sparingly or that you’ll always pay off the balance.
