Each year, millions of students attend college. It’s an exciting time of change and transformation, especially for first years. The most evident changes are the ones that touch on finances. Unlike in high school, you’ll have to focus on much more than just attending classes in college. You’ll need a financial game plan. Plus, if you’re no longer dependent on your parents for money, it’s even more critical to learn how to manage your own finances. Whether you’re a new or returning student, financial management skills can help you avoid stress. The trick is you don’t need to take a full financial management course. Let me walk you through five creative finance tips for college students.
This is the first obvious and most logical step that you can take while attempting to stay on top of your finances. The main goal is to find out the exact amount you have coming in and the amount you have going out each month. This is essential for creating a realistic budget. Let me walk you through the steps:
These days it’s common for students to hold down a job or two while studying. Consequently, most students already have an existing bank account. However, even if you don’t work, you should consider opening a bank account. Most banks have accounts that are tailored specifically for college students. These student bank accounts have very low or no minimum balances. This makes it easier for students to manage their accounts without facing penalties for having a low balance. Plus, a number of banks now offer mobile banking. You can skip a boring trip to the bank and complete transactions on the go, even between classes.
College is the perfect time to start working on establishing good credit. The easiest way to do this is by owning a credit card. However, you want to avoid reckless spending which can lead to a sticky financial situation later on. The best way to accomplish this is by making small, recurring monthly purchases using the credit card account number. Then, set up auto-pay for the credit card. This will see to it that you are never late with any of your payments. Doing this will immediately start building your credit history without necessarily putting you in any undue risk.
In as much as you want to focus solely on your college studies, you’ll also need cash. If you aren’t dependent on your parents for financial support, then getting a part-time job may be necessary. Plus, a part-time job is a great way to learn some valuable lessons about the workplace. A part-time job can teach you the importance of teamwork, organization, and diligence. Essentially, you’ll gain valuable training for your first full-time job after graduation.
The trick is to get into the habit of looking for summer jobs even during the holidays. This way, you’ll have a summer job lined up and have the extra cash to use during the school year. Also, don’t be afraid to pick up some work hours after your classes or on the weekends. Back when I was a college student, I worked as a barista and cleaned houses after classes. My employers were usually very flexible with my schedule. If you schedule your time right, then you can easily manage your finances and studies without too much stress.
Start with small savings. Even if it is only a little, it will eventually add up and can help during an emergency. Your college budget may already be tight and saving may sound crazy. But if you sit back and reflect on the benefits, you’ll have a change of heart.
In college, income is usually pretty low. Consequently, it’s easy not to prioritize saving. However, saving during college can benefit you in multiple ways. First, you’ll build an emergency fund which is crucial and necessary for everyone. In fact, many professional advisers prefer that you start early. Second, you’ll get into the habit of saving. Keep setting aside some of your money for emergencies and savings, and soon, it’ll become a routine. It’ll be easier for you to save even after you graduate and leave college. The amount you save during this stage is not as important as building the discipline of saving. Plus, saving doesn’t just have to be for a rainy day. You can save for an epic ski trip or for those amazing new sneakers.
Many students enter college not knowing how to manage their finances and end up mismanaging their money. Before long, they are broke and have no idea where to get the cash to support themselves. Even worst, they wasted the opportunity to get ahead. Remember college isn’t just about the grades, it’s about preparing yourself for a lifetime of success. Financial management is a huge component of your preparation. Therefore, it’s crucial to practice money saving tips and develop good financial habits. This will get you through college with your finances intact and equipped for future financial success.
By Christopher Kay
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