Money is something everyone needs to use on a daily basis as a college student; you might be faced with paying your own rent, buying your own groceries, and even managing a credit card for the very first time. This can be super intimidating and difficult to manage.
If you are on the verge of graduating from college or you have recently graduated, congratulations! For many young adults, college graduation marks a major transition into adulthood and the world of post-graduate employment. It also guides in a new phase of personal finance. Though it is not true that every decision you make in your twenties will have lasting effects on the course of your adult life, there are some that have bigger implications than others. Many of the decisions you make will center on your finances.
1. Create a Budget
That’s where a budget can save the day. By tracking your income and expenses, you’ll have a clear sense of your cash flow from month to month. One of the golden rules of personal finance is to spend less than you earn. But you can’t follow that guideline if you don’t know how much you’re earning or how much you’re spending.
You could use a spreadsheet to record your spending, or download an expense-tracking app to do the legwork for you. By understanding your budget, you’ll gain a greater sense of control over your money, so it doesn’t end up controlling you.
2. Know your Financial Aid Options
Most students need some kind of financial aid to help pay for their education. The key is in making the most of the options available to you. In addition to university-specific scholarships, research whether you qualify for other funding thanks to hobbies you pursue, the major you’re going into, and organizations you and your parents belong to. There are scholarships and grants out there for more than you might realize, and the more you can avoid borrowing to fund your education, the better.
3. Keep Track of your Expenses
It is very important for any person to know where the money is coming from and where it is going. Keeping a track of your expenses will help you identify your over-spend and wasteful spend areas. Once you identify your over-spend and wasteful spend areas been identified you should try reducing them. You may maintain an expenses sheet on Pen and Paper or an Excel sheet. If you have a smart phone you can download management apps that help you to track your expenses.
4. Avoid all kinds of Debt
Here’s the best plan, avoid debt. Avoid credit card debt, avoid student loan debt, avoid car loan debt – avoid it all. The goal is to graduate college with as little debt as possible so that you can start your journey into the “real world” feeling light and financially free. Sometimes, you need to take out a loan to make ends meet and get your education. If you do have to take out student loans or a car loan, make sure you do your homework. All loans are not created equal.
When researching different loans you should compare things like interest rate as well as the repayment terms.
5. Work Part-Time
One way to avoid graduating with tons of debt get a job, get two jobs, whatever you can handle without completely burning yourself out. Start a side hustle walking dogs or tutoring your classmates in your favorite subject. Get a job in a research lab and learn while you earn. Teach English online, do some freelance writing, or teach guitar lessons.
If your college permits, try and secure a job working on-campus and then do whatever it takes to keep that job throughout college. Having a job for the 3-4 years of university will keep money coming in and reflect fabulously on your resume.
6. Create Savings Goals
You have a lot of financial goals. You will be faced with big purchases in the near future, if you haven’t been already. You’ll decide whether or not to buy a house or car, among other things.
Think about your future now and create goals to work toward. If you think you’ll be purchasing a home in the next few years, create a down payment fund. If you want be purchase a car start saving for that. Try to save as much cash as you can for those big purchases.
7. Build an Emergency Fund
When you’re in college, you might be feeling social pressure to spend beyond your means. But be careful about splurging if you haven’t built up your savings account.
Building your savings will provide a cushion for any unexpected expenses. You never know what life will throw at you, so protect yourself financially by funneling money into an emergency fund. Hopefully, you won’t have to touch that account, but you’ll feel better knowing it’s there, just in case.
8. Apply for Scholarships and Grants
You don’t need to be a topper to get a scholarship. There are literally scholarships for everything – scholarships for feminists, scholarships for the best doodles, military scholarships, scholarships for adult students, scholarships for average students.
Remember, you can only win a scholarship if you apply, so throw your name in the hat and see what happens. And, when it comes to scholarships, quantity matters. The more you apply for, the greater your chances of winning. But, quality also matters. You will have to put in the effort when it comes to the application process if you want to see results.
9. Rent Books instead of buying them
Instead of buying course books from stores, try these effective methods:
Rent: Many companies offer textbook rentals now, which allow students to use books at a low cost and return them at the end of the semester. Look for rentals available for both print and e-books.
Take used books: The best advantage of being a regular college student is having a student-library at your disposal. Borrow books from the library or buy low-cost used copies before buying new ones. If your library doesn’t allow that, check them out for a 2-3 hour span when you are studying.
Sell back: Keep your books as neat as possible and sell them back to your college bookstore at the end of the term. If your college won’t take them, try a local bookstore.
10. Use Credit Cards responsibly
It takes time to build good credit, so starting while you’re a college student could help you in the future. Your credit score depends on a few factors, including the age of your accounts and your history of repayment.
By opening a credit card account, you could establish your credit history with on-time payments. But you’ll have to be careful not to spend more than you can afford to pay off each month, or else you could end up with high-interest credit card debt that’s hard to pay off.
You might look for credit cards designed for students, which typically don’t require you to have significant credit history and often don’t come with annual fees. Some also offer rewards, such as cash back on your everyday spending.