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8 Tips to Managing Your Money in College

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Parents and students focus a lot of their energy on how to pay for college tuition. They learn about scholarships, loans and financial aid. However, another money issue is often neglected – teaching students how to manage their money while in college.

Whether students have a part-time job during the school year, or their parents supply them with spending money, they need to know how to handle that money. Here are 8 tips all students should know about money.

1. Establish Checking and Savings Accounts

Bank Boxes

It is a good idea to get in the habit early of having separate checking and savings accounts so you can keep your spending money and money that you are setting aside separate. You may also earn a small amount of interest on your savings. Here are some things to keep in mind when setting up these accounts:

  • Make sure you understand the ATM options. Do they have an ATM near your campus? If not, do they waive fees when you use an ATM from a different bank?
  • Is there overdraft protection?
  • Make sure you can establish online banking with the ability to transfer funds fee-free between your accounts
  • Does the bank have a smartphone app? This can be very handy for a college student to be able to easily check account balances before spending with a debit card. Use it to setup alerts for your account when your balance gets low or when an automatic bill has been paid

2. Create a Budget

Laptop Budget

First, figure out what your monthly income will be from your job or assistance from parents. Then, determine your fixed expenses (for example, a car payment) and variable expenses (such as school supplies). After subtracting your expenses from income, do you have enough to cover your expenses? If not, you may need to make adjustments to increase income. Do you need to be saving for next semester’s tuition? Make sure you take that into account and treat it as a fixed monthly expense. Automatically move that portion of your income to your savings account to earmark it for tuition. Periodically evaluate your plan and adjust as needed. If you’re spending too much, you will need to cut spending or find a way to earn more money.

3. Save

Wallet Vice

Now is a great time to get into the habit of setting money aside in savings. If you are fortunate to have money left over each month, then treat saving like a fixed expense – make it automatic every month to move money from checking to savings. Make your list of saving goals. Are you saving for a purchase? Do you need money for holiday shopping? A family member’s birthday? Plan for that through your savings. You may also want to allot some of this money as an emergency fund. This fund can be helpful when things come up like sudden car repairs, or your part-time job cuts back your hours.

4. Credit Cards

Credit Laptop

College students are often bombarded with credit card offers with enticing deals like a free t-shirt with your application. Try to avoid the temptation of getting a credit card if you can. However, if you feel you must, look for one with no annual fees, low interest rates and grace periods. Avoid interest and late fees by always (always!) paying in full every month!

5. Protect Your Identity

Lock

One of the biggest threats to personal finances is identity theft – and that includes college students. Get into the habit of monitoring your accounts on a regular basis (remember that banking app we mentioned above). Watch for unauthorized transactions and check your account contact information to make sure nothing has been changed. If you see any suspicious activity on your account, report it to the bank ASAP.

  • Avoid checking accounts on public computers
  • Safeguard passwords – don’t share or leave a list of your passwords out unsecured
  • Do not lend your debit card to your friends or roommate

6. Don't Take On Any Unnecessary Added Expenses

Doggo

For example, sharing an apartment dog with your roommates may sound like a fun idea, but you are adding the cost of food, veterinary care and maintenance medications

7. Be a Smart Shopper

Store Shopper

When shopping, create a list and stick to it. Save money by using coupons or coupon codes and buy used when you can. Avoid impulse purchases. Think about how you feel after the purchase is made – do you feel good about the purchase, or have buyer’s regret? If so, use it as a learning experience to make a better purchasing decision next time. It’s ok to treat yourself once in a while if you can afford it, but make sure it was worth it. Avoid places that you know are temptations for you – for example, if you can’t walk by the local café without dropping in for a frozen mocha latte with whipped cream – change your route. Go to the dining hall and get your coffee to-go on your meal plan instead!

8. Don’t Hide From Your Mistakes

Hiding Student

If you make mistakes and get into debt, the worst thing you can do is try to ignore it. Being in debt can be stressful and embarrassing, but be sure to take control of it and reach out for help. Instead of the situation becoming an insurmountable roadblock, use it as a learning experience. First, ask your parents/guardians for their guidance. Contact the company that you owe money to and ask to work out a payment plan. Use any resources available on campus – see your financial aid advisor, and even a campus counselor if the stress is getting you down.

College can be an amazing time for learning – not only academically, but in “real world” skills. Following the above tips will help you establish good financial habits that will last a lifetime. For additional online resources, head on over to CashCourse.com - they are a great resource!