Ah, the student life: newfound freedom, mental and social enlightenment, epic parties, and… responsible financial decisions. While college can be an exciting time, poor financial decisions can end up costing you an arm and a leg.
In this article, we offer four easy-to-follow tips to maintain financial stability without skimping on the fun. Class is in session – let’s begin!
1. Control & Responsibility
Financial savvy is all about strategic control of your money. As college life piles fun new experiences and challenging responsibilities on your plate, the last thing you want is poor financial management to distract you with unnecessary worry.
All college students know different financial realities. For some, parents are financing everything; others are paying their way, and for many, it’s somewhere in the middle. Whatever your reality, you need to assume control over your budget and manage it wisely; the sooner you understand this responsibility, the healthier your finances will be throughout your life.
For example, if you have a student loan, be responsible for it. Student debt can be a severe burden when you graduate, so spend wisely and know your plan for repayment.
2. Create & Maintain a Strict Budget
You won’t always get it right: you’re young and in an exciting new phase of your life. But even when you feel the pull to spend irresponsibly, having a budget will help keep you on track.
Create your budget in a live and accessible digital sheet that you can access and amend from your laptop or mobile, and include all your spending, separating the wants and needs.
Of course, having a budget is only half the battle won: you also need to stick to it. So even if you have a splurge week – maybe you just had to have that new sweater or you felt generous and picked up the tab for your crew – try and balance it with frugality the following week.
3. Earn Extra Income
Even if you’re getting a free ride from your folks or a scholarship, earning extra income is essential. Besides keeping your bank account healthy, earning extra income will also teach you responsibility and the true value of a dollar: the best financial education you can get.
The side hustle you choose is up to you. Consider your talents, the time you have, and what you enjoy. No matter what type of job you land, though, give it your best shot and stick with it. So much of financial well-being is about follow-through.
4. Be Credit Savvy
Last but certainly not least is one of the most important financial lessons you will ever learn: how to use credit to your advantage.
Firstly, you need to start generating a credit record, which is vital for getting favorable interest rates in the future and, of course, for major purchases like your first home. You can do this by applying for a student credit card: they’re easy to qualify for and usually have competitive interest rates.
Now comes the hard part: don’t overextend yourself. The key is to use it and pay it off as quickly as possible. Maxing it out and only repaying the minimum amount will negatively impact your credit score.
But, disciplined use of a credit card will show you the benefits of financial responsibility: you’re able to make necessary purchases while building the best possible credit record for your future.
Practicing these financial tips early on in college can set you up for a financially fulfilling future, even long after class is out. Learn these lessons now so you don’t get schooled with painful – and sometimes long-lasting – financial issues later.