The majority of college students graduate not only with degrees, but with tens of thousands of dollars in debt as well. Unfortunately, budgeting and financial management are not skills everyone has upon beginning their college careers. Whether you are an incoming freshman or several years into earning a degree, there are some fundamental pieces of information you should know to keep massive debt at bay.
Budget! Maintain a list of your monthly income and expenses, and respect them. If you know your rent, utilities, and transportation and food costs exceed your allowances, it’s time to make some adjustments. If you can manage these bills with some money left over, that’s great. However, think carefully about how you will spend it. You may ration it out to use for a restaurant dinner every week, for instance, or you might opt to save it for one fantastic night out at the end of the month. Saving it for potential emergencies is not a bad idea, either.
One useful option that facilitates budgeting is the envelope system. Designate and label various envelopes to individual expenses, such as rent, gas, and groceries. Put the necessary amount of money in each envelop and don’t touch it unless it is to be used for its intended purpose. Once the money is gone, it is gone for the week, month, or whatever increment of time you are using. Actually seeing the money dwindling helps you keep track of it and minimizes the likelihood of overspending.
Embrace financial aid opportunities. Explore your options for financial assistance awards, scholarships, grants, student loans, and employment. If you find that you must borrow, do so in moderation. It is tempting to accept loans that you may not need, but will provide a nice cushion. This results in unnecessary spending, though, and it is money you will ultimately have to pay back anyway. Also, find out which expenses aren’t mandatory; meal plans may be sacrificed if cooking is cheaper and recreation fees might be bypassed if you exercise elsewhere.
Use your student discounts. They are everywhere â€“ especially in college towns. With just your student ID, you can enjoy discounts on meals at many establishments, reduced rates for laptop repairs, and even see movies at low costs. Overall, the idea is to be frugal. Don’t be afraid to furnish your dorm room or apartment with used items, for example.
Approach credit with caution. Neglecting this rule, more than anything else outlined here, is dangerous. You may have credit available, but that does not mean you can afford using it. You will be riddled with service fees and interest rates, not to mention how easy it is to spend frivolously when you can’t really see the charges multiplying. Poor credit lasts for years.
If you must rely on credit cards, do your research. Do not accept just any offer that comes your way; shop around to find the lowest possible interest rates and the most reasonable fees, terms, and conditions. If you are careful, establishing and building credit is beneficial. To build a solid credit history, make one small charge per billing cycle. Then pay off the balance completely. Keeping the account open but cutting up the actual card is an excellent way to ensure that you won’t be tempted to make an impulse buy.
Overall, the best way to settle into a stable financial situation is to be mindful. Know your options, be aware of what you are spending, and exercise caution when dealing with potential risks. College years are incredibly vulnerable with regard to spending. By taking these suggestions, you can ensure financial safety and security.