Many college freshmen are moving into their dorms, eager to enjoy the new freedoms life away from home has to offer. A brand-new credit card, books, and room and board costs are just a few of the financial balls new students have to juggle.
Here are a few tips to help freshmen manage their
finances away from home:
1) Create a budget. Take the time to establish what your income will be each month, whether that's from a work-study stipend, part time job, etc. Then, subtract all your debts, including what you'll need to spend on housing, food, gas (if you're driving), and loans. Once you have a good idea of how much you can spend each month, set aside a portion of that for an emergency fund. Be sure to update and adjust your budget monthly according to your actual spending. Your budget won't help you control your spending if you set aside $100 per month for groceries but regularly spend $200. Set yourself up for success with a realistic monthly budget based on your actual spending habits. If your spending is more than your income, you know something has to change.
2) Use credit cards, but use them wisely. Credit cards aren't evil and they don't automatically trap the people that use them under a mountain of debt. In fact, it's a good idea for students to use a credit card regularly in order to help build a credit history. However, this strategy only works in your favor if you pay off the full balance each month and never use the credit card to buy something you couldn't buy that same day with cash. This approach will help you live within your means, but still build a good credit score.
3) Look for student perks. Many restaurants and stores have special discounts for students with a college ID. Here's one blog post with a list of discounts (disclaimer: we did not verify the claims made in linked blog). Make sure you take advantage of these extra opportunities to save money. Renting your textbooks or buying them used can also save you hundreds, and many booksellers offer discounts for college students. Finally, don't visit the coffee shop every morning for your dose of caffeine, even if they do have a student discount. Making your coffee in a dorm-sized coffee machine can save you $90 every month - more if you typically buy expensive coffee drinks.
5) Enroll in online and/or mobile banking. If you are heading to college away from your hometown bank, you will need a way to check account balances and transactions. See if your bank offers online banking or mobile banking so that you can stay in control of your account and always know your balance.
Keep these five tips in mind and you'll avoid major financial pitfalls while in college.
