Now that you’re in college, you probably have more control over your own money than when you lived at home and were mostly part of your parents’ financial world. Certainly, if Mom and Dad live far away, you have more freedom to choose where and how to spend money.
But with that freedom comes the need to be smart about how you spend money. When you’re on your own, you get to make these kinds of choices. You also get to see the good and bad results of the decisions you make.
Here are some tips to help you keep your finances in good shape when you start college:
1. Take charge and do your part.
When you’re in college and have so many other changes and challenges to deal with, it’s all too easy to forget about your finances. But you can’t start out as an adult with bad money habits, and college is a great time to decide to take charge of your finances and be responsible with your money.
Even if your parents continue to pay for some of your bills, like tuition and room and board, you should make a plan with them to take care of your other bills. You need to have a solid, well-thought-out plan for your money from the start, and you need to be in charge.
2. Make a spending plan.
This is very important. You need to figure out how much money is coming to you from all of these places: your parents and other family members, financial aid and scholarships, student loans, and any money you make working. Then you need to figure out how much you spend on things like books, bills, toiletries, entertainment, and so on. Put all the categories and numbers into a spreadsheet and try to make everything balance, leaving a little extra for emergencies and, if possible, savings. This step can be made easier with online tools.
Now you have to make a promise to stay on your budget. If you don’t stick to your financial plan, it won’t help you and could put you in debt. So, if you feel like spending without thinking, especially on something you don’t really need, go back and look at your budget. Let it lead you and teach you. Don’t put your college career at risk by putting yourself in a hole you can’t get out of.
3. Get in order.
Set up your financial structure. You can write and cash checks, use a debit card, use an ATM, make deposits, and start a savings account if you open a bank account or join a credit union. Compare prices and fees to find the best deal. Banks are always coming up with new fees for services that used to be free. Ask about overdraft protection, online banking, minimum balances, and other things and get answers.
Many colleges have their own ways to pay for events and food in the cafeteria. Find the easiest and best way to set up and fund your different accounts on and off campus. Make sure you have a method that you can count on and that gives you access to your money at all times.
4. Stay organized.
Set up a routine for yourself that includes keeping track of your money on a regular basis. By keeping careful records of what you’ve spent and what’s left in your account(s) to cover the rest of your monthly bills, you’ll soon have a clear picture of your financial situation.
The only way to stay on track with your finances is to know these things about yourself. You don’t have to know everything down to the last penny, but having a good idea of when you can get a few extra dollars from an ATM and when you should hold back from eating an expensive meal off campus will make your life easier and let you worry about more important things, like your grades.
5. Make good use of credit.
If you haven’t used a credit card before or don’t have a card from your parents with a high spending limit, now might be a good time to learn about the pros and cons of credit. First, keep in mind that a credit card is not free money. It is a loan. That means you have to pay back any money you owe. If you don’t pay your bill on time and in full, you’ll have to pay interest and late fees on top of the main amount. And before you know it, you might have to deal with debt collectors. So don’t be careless with your credit cards or how you pay your bills. The costs can add up fast.
Look around and compare interest rates to find the best deal, and don’t sign anything too quickly. Lenders often start out with low interest rates that go up quickly after a few months. If you’re not sure what you’re getting into, read the fine print.
Start with a low-limit account and use it sparingly at first, making sure to pay it off every month. By doing this, you can build a good credit history that will last through college and beyond and help you when you want to buy a new car or your first home.
6. Get a job.
College is a lot of work, that’s true. You have a lot of classes, term papers to write, and studying to do. You should also have time to hang out with friends and do things outside of school. But the money you can make by working part time while you are in school can cover a lot, if not all, of your spending money. Also, there’s nothing like earning your own money to boost your sense of self-worth.
Most colleges have work-study programs that let you work around your class schedule. Most of the time, the pay isn’t all that great, but neither is the work all that hard. You might end up calling people for money for the alumni fund, stacking books in the library, or working in your dorm office at night and on weekends for a few hours.
Look for part-time jobs in restaurants or stores that are not on campus. If you work during the summer, save some of your money so you can use it during the school year. You should get used to working and putting money away. It’s something you’ll have to do for the rest of your life.
7. Don’t buy something new.
If you can find a used textbook for much less money, there’s no reason to buy a new one. If you have to buy something new, keep in mind that the prices on campus are almost always more than what you’d pay at an online store like Amazon. You may also be able to order e-books for an e-reader or laptop and keep the difference between the price of the e-book and the price of the real book.
Also, if you’re moving into a dorm room, remember that someone else is leaving. Maybe someone on campus will give you a used fridge or coffee pot. Recycling helps save money and is good for the environment.
If you don’t live on campus, you shouldn’t buy the latest Swedish designer furniture. Just as easily, you can buy furniture for your student apartment at a second-hand store. You’d be surprised by how many great things you can find at a yard sale. The point is that this is the time in life to stop being so fancy and go for things that are easy and cheap.
8. Take care of yourself.
Care about how you spend your money. Don’t just leave money around. Be wary of classmates, friends, or other people who want to borrow money or have great ideas about how you should spend yours. Identity theft is a serious problem, especially if you shop or bank online. You might want to send money-related mail to your parents’ house.
Prepare for the unexpected by keeping some cash in a safe place in case of an emergency. Don’t end up having to pay fees for late library books, parking tickets, and other things like that.
9. Find ways to spend less money.
Use any student discounts that businesses in your area offer. Check online for discounts for students on travel, food, books, clothes, entertainment, and other things. Clip coupons before you go shopping, and whenever possible, buy generic. If you have a meal plan, don’t spend extra money on food, especially fast food. Wait until the next big movie comes out on DVD, then get it from the library. All movies will be free at some point. Use Skype to call home so you don’t have to pay too much for your phone plan.
10. Find cheap ways to have fun.
There are many ways to have fun in college without spending a lot of money. In fact, many college activities are free for students because you probably already paid a general student activity fee when you paid your tuition.
Set spending limits for nights out and dates, and don’t let anyone make you feel like you have to prove something by how much money you spend on them. It’s fine to have fun in college, but don’t forget why you’re there. When you party too much, it can hurt your grades and your bank account.
If you start good money habits in college, they will serve you well during your time there and for a long time after you graduate. Make it a part of your college education to learn how to use money wisely.