Managing Your Money While in College
Five habits that will shape your financial future
If you are still a student then your financial picture is much different than someone just starting out in the workforce. You have not yet started making real money, your focus is primarily on your studies and having fun. However, it is important to take these times seriously, because the mistakes you make in college can follow you throughout the rest of your life. Too many students are graduating in the red and facing difficult financial choices when they are just starting out. You can prevent this from happening to you with a college financial checklist and by establishing good financial habits. There are five major areas that you should focus on in college.
Budgeting in College
You should create a budget for college. now. Even if your parents are paying for your college entirely, you should have a budget outlined and stick to it. Of course, that doesn't mean that you shouldn't have fun as well. Budget it in. Remember that most people will look back at college as the time when they were the poorest, but they had the most fun. You do not need to get the latest gadgets, computers, clothes, and cars to have a good time. These things can come after you have your first real job. By setting limits on all of your spending categories and sticking to them you will start out on a great path and form good spending habits. Consider choosing more affordable college housing options to help save as well.
Saving Money in College
Saving money in college should be a priority. However, you may want to look at it a little differently than those who are out in the real world. It doesn't make sense to invest a lot of money when you are going into to debt to pay for your education. First, save for your tuition each semester or quarter. You may be working primarily summer jobs, or just part-time, but this can really make a difference in the amount you may end up borrowing. You should definitely have an emergency fund saved as well. While you are an undergraduate you may want to buy a car, but you should likely hold off on purchasing a home or condo.
You have to pay for college somehow, but how much money do you really need to borrow. It is important to consider all the ways that you can lower your education costs. Private schools tuition can add up quickly and most of the time it does not make a huge difference in your pay after you graduate. You may opt for a school that offers you a scholarship or for an in-state school. Remember that you will have to pay back every penny you borrow plus interest. Student loans will not be forgiven in a bankruptcy. They will follow you around.
Credit Cards and College
You should make sure that you are choosing the right accounts for a college student. This is one of the areas when so many college students make a mistake. Credit cards have the potential to wreak havoc in your life. You do not need a credit card to make it through college. Credit card companies work hard to get college students to sign up while in college. They want to create customer loyalty. It also more common for students to run up balances much quicker before they really understand all that a credit card entails. You should be living on a budget and any money that you put on your credit card should be taken from the budget. This will help you to pay off your card in full each month.
Working in College
There are many advantages to working while you are in college. It looks great when you begin to apply for jobs, especially if you can find work in your field. Finding a good college job will make it easier to manage your money and gain work experience while in school. Additionally, you may benefit from tuition assistance and other employee benefits offered by your company. The more money you make, the less you have to borrow, which can save you in the long run. If you choose to only work during the summers, you need to make the most of your summer job. You may also take an internship. You may opt to work full-time and go to school part-time to avoid going into debt and manage your money better. This work experience can help you as you plan to transition from attending college to working.