A lot of young adults often lack financial literacy, especially those in high school and college. Students don’t learn about the importance of managing their own finances until after they graduate high school or even college. This frequently leaves students overwhelmed and confused.
Dealing with finances can be stressful, but you’ll be doing it for the rest of your life, so it’s best to start ASAP. Therefore, yes — you should be in charge of managing your finances while in college.
Although managing finances can be scary, it eventually becomes an excellent way to stay within your budget without negatively affecting your bank account.
We put together a few tips (below) that are meant to help you manage your finances effectively.
Create a budget.
Budgeting money is not always easy, but here’s an article that provides a way to start. Use a spreadsheet or an online service to help you stay within your budget. With a spreadsheet or an online service, you can track your bills and income to determine how much you need to spend on necessities and how much can go towards savings.
Start a savings account.
Having a savings account is highly recommended. Assuming you’re away for college, experts recommend having a savings account in case of an emergency.
Try and start an emergency fund that covers at least two months of protection in case you lose your current job or experience an emergency.
Try not to take out big loans for school.
Not taking out big loans is easier said than done. With the cost of tuition increasing exponentially, more students are taking out larger loans to cover the cost of attendance. Unfortunately, loans, especially private loans, come with hefty interest rates. If you can, seek out other forms of financial assistance like scholarships or grants.
We encourage students to apply for Federal Student Aid through FAFSA along with outside scholarships. Search and apply for any scholarships you can to help minimize the amount of money you’ll take out in loans.
Be disciplined with credit card spending.
Credit card bills can quickly add up. It’s important not to max out any of your credit cards. Only use the credit card if you have the money to pay it off immediately. What most students don’t understand is that credit card money isn’t free. You end up paying more on your purchases with interest if you don’t pay them off right away.
Spend less than what you make → control spending habits.
As a college student, you will most likely get invited to all sorts of activities. These events can quickly affect your pocket. Try not to spend on unnecessary goods and services such as frequently eating out. Be sure to identify Wants vs. Needs.
Take advantage of student discounts.
Companies such as Amazon and Spotify provide significant discounts for students, and you can save a lot of money. Many other companies offer similar deals; find them here.
Taking charge of managing your finances in college is challenging but rewarding. By the time you graduate college, you will have a ton of experience with managing your finances!