Financial Tips to Know Before Starting College

Leaving for college is a major milestone in the lives of a vast majority of young adults across the country. For many, this means that it is their first time living away from home in what may be a brand-new area. Without their parents there to guide them, they become independently responsible for not only managing their day-to-day lives including who they will spend time with, what they will eat, how much they will study, and when they will go to sleep at night, but they will also find themselves in charge of handling their finances. Before making the daunting transition from high school to college, here are six meaningful tips to help guide your college student toward making sound financial decisions.

Create a budget

As a college student, there are a variety of expenses that arise. Some of these costs may have been ones that your parents previously paid for such as gas or groceries, that you have suddenly become responsible for. Others may result from the new, exciting social opportunities that become available to you as a student. These activities could range from going to the movies, eating out at restaurants, shopping, or even attending university-sanctioned events such as football games and concerts. By implementing a budget, you are better equipped to create goals and track spending to ensure that you are able to partake in all of the exciting opportunities that you wish to be a part of, while still keeping an eye on your money.

Start saving early

Related to the aforementioned increase in expenses, one important tool to keep in mind is saving early. One way in which to incorporate this concept is to work a part-time job during the semester. In doing so, you are not only able to earn extra cash, but it also serves as an opportunity to begin building your resume. The extra cash that you earn may then be split between spending on enjoyable activities with your friends and saving for life after college. In order to ensure that the portion you wish to save is protected from being spent on current needs, it may be beneficial to set up an automatic deposit system.

Take advantage of student discounts

One seemingly underestimated perk of being in college are the deals and discounts that are available to students. While restaurants and retail stores are two of the biggest contributors of discounts, there are several other areas of the student’s financial life that should also be examined. One fitting example is Spotify’s Premium Student Deal that includes Hulu and Showtime and costs only $4.99 per month. Although each discount may seem like a small amount is being saved in the moment, the extra money will add up significantly over time.

Apply for scholarships

Scholarships are a beneficial strategy to utilize to cut down on the amount of money that must be put toward tuition. They are a common method used by alumni who wish to give back to their college by providing money to students who are in need.  The application process ranges between scholarships and could be as simple as submitting a copy of your resume or as involved as writing a paper. Because there are a variety of ways to acquire scholarships, they are an effective strategy to save tuition money that would have otherwise been taken from a 529 Plan or added to the already stressful amount of student loans.

Consider a credit card

Another thoughtful tactic to incorporate as a college student is to consider applying for a credit card. Beginning to utilize a credit card as a college student requires discipline to avoid purchasing more than you can afford but can be a worthwhile strategy for starting to build your credit score at an early age. After all, a better credit score means a better chance of loan approval and the possibility of a lower interest rate. This is a powerful way to proactively impact your financial situation for the better post-graduation.

Learn basic bank skills

Although they may be easily overlooked, familiarizing yourself with basic bank skills is imperative to financial success in college. Without your parents conveniently accessible to assist you, you may realize that tasks that were once completed for you are now your responsibility. Examples of such activities could be writing a check or utilizing your bank’s mobile app to monitor your account. Another critical concept to be aware of is overdraft. Overdraft enables you to continue withdrawing “money,” even when the account no longer had funds in it. There is usually a fee for overdraft, and it should be avoided when possible.