If you’re still a student, then your financial situation is different than that of someone starting off their career. For now, there is no real opportunity to start saving your money unless you’re a ‘Mark Zuckerberg 2.0’ who is on the brink of releasing a Fortune 500 social media company. Knowing how to properly manage your finances in college is important, not only will it make your life easier during your studies, but it’ll also set you on the right track after graduating from school. We’ve put together a few tips to help you kick off your financial planning:
Create a Budget
The first step in managing your finances in college is to establish a budget. Knowing how to manage your money is essential, especially if you’ve received a student loan. Although an interest-free student loan may seem like ‘free money’, it’ll eventually come back to haunt you if you don’t manage your finances correctly to plan for repayment. The initial step in starting your budget is to outline all your monthly expenses, such as:
- Phone Bill
- Leisure Time
Once the budget is complete, it’s vital to brainstorm how you can make smarter money choices that fall within your budget. For example, you should choose an affordable cell phone plan that coincides with your needs, not wants. Also, think about free or low-cost leisure activities such as sponsored city events, college events and/or outdoor activities.
By establishing these limits and resisting the temptation to splurge, you will start out on a great path and form solid spending habits.
Credit Card Use
Having a credit card is potentially one of the biggest temptations a student or anyone in general could have. Many banks and credit card companies will offer incentives to students such as free concert tickets, clothing and much more to hook students into getting a credit card knowing that students are limited on cash and will jump at the opportunity of ‘easy money’. While credit cards provide easy access to credit, you must realize that the access to funds comes at a cost if you don’t make your payments on time.
Establishing a credit history is an important part of building your credit score. Many college students make the mistake of not choosing the credit card(s) best suited to their needs. If you get a credit card, choose one that helps align your spending habits with your budget, while at the same time meeting your needs. For example, if you’re a student with a limited income, selecting a low credit limit amount and restricting yourself to no overdrafts is optimal because it increases the likelihood that you won’t overspend and will be able to afford to make your monthly payments in full. Paying your credit card balance off in full on time may ultimately help you to build your credit score.
While studying in the U.S. may be quite expensive, being a student also means that you’ll enjoy lots of exclusive discounts and perks. Your student ID should be your closest companion – not only will it give you access to your school’s amenities, it can also give you access to discounts when you present it at certain restaurants, shops and cinemas.
As a student, you will have a vast option of discounts, such as:
Saving money by searching for great deals and discounts will stretch the limited money you have to help you adhere to your budget.
Knowing how to budget your finances before the school year kicks off will be a burden off your shoulders. Implementing these tips can help you better manage your credit card use and remind you of the great discounts you have as a student. If you’re looking for ways to save on a healthy lunch, check out our ‘How to Prepare a Cheap and Healthy Lunch’ guide.