It’s just about time for the fall semester to begin, and a number of students are heading off to college for the first time. For many of these students, financial education is something that was not a priority. It’s never too late to learn about budgeting and credit card debt, however. We’ve put together a list of six basics that every college student should know when it comes to personal finance.
Budgeting – Developing a realistic and manageable budget is a lifelong skill that is essential for anyone in college, preparing to go to college, or just graduating. Start by using a budgeting worksheet for students to get an accurate picture of your income and expenses. By comparing and contrasting your total income and expenses, you will be able to create a feasible budget plan. By sticking to your budget, you will avoid going into any unnecessary credit card debt.
How to Choose a Bank / Credit Card – Consider your specific banking needs and services, not just the freebies you’ll receive when you open an account. Think about location. Is there a bank that is in both your college town and hometown? Don’t forget to see if there are any fees associated with your account or card. Use the Bank Account Comparison and Choosing a Credit Card worksheets in ACCC’s College Financial Workbook.
Use Credit Responsibly – It can be tempting to make purchases with a credit card when you’re short on cash, but make sure you’re not biting off more debt than you can handle. Racking up credit card debt now can severely hurt your credit score and your chances at obtaining other lines of credit in the future. It can also hurt your chances to rent an apartment. Only charge what you can afford to pay back quickly.
Monitor Your Accounts on a Regular Basis – Take a few minutes each day to log into your accounts (including bank and credit card accounts) and check for any suspicious activity. This will help safeguard you against any fraudulent charges and potentially identity theft.
Save – Consider retail jobs, paid internships, federal work study jobs, and tutoring to earn and save money while in school. It’s important to save for your future – for an apartment after graduation, student loan payments, or a relocation for a job.
Use your Student ID for Discounts – Not only will you need it to enter your dorm, the dining hall, and the library, but your student ID can also earn you discounts at hundreds of retailers nationwide. If you are not sure if a company offers a student discount, just ask. Check out the College Financial Workbook for a full list of discounts.
Be Aware of Your Financial Situation – Too many students graduate from college without any idea of how much they’ll have in student loans, or how much to expect to make at their first job. Make sure you know how much school costs per year, what your parents are covering, what you’ll be expected to cover, and budget for rent and living expenses accordingly.
For parents out there with children looking at college or about to head off to college, share this list. You probably don’t want to be supporting them financially through adulthood, as 31 percent of people report in an ACCC survey. Teaching them about finances now will help them make better financial decisions later in life.
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