College, for many young people, comes with facing a plethora of new things. A new environment and a new sense of financial responsibility can be daunting when you are away from the safety of your parent’s wallet for the first time. According to LendEDU’s 2016 study, there is an extreme lack of financial literacy in the United States that is negatively affecting college students. The study found that forty-three percent of college students do not track monthly spending at all, fifty-eight percent indicated that they are not saving anything, and forty-three percent of students cannot name a single difference between a credit card and a debit card. Managing one’s day-to-day finances requires more than a little financial knowledge.
While most college students have a primary goal of ensuring that they will have a stable job after they graduate, many do not consider how the choices that they make in college will impact their future finances. Many college students rack up thousands of dollars in credit card or student loan debt because they are spending more money than they can afford. Others simply fail to plan for the future at all. Here are several tips that all students should follow to ensure that they are financially responsible and that they leave college in the best financial condition possible.
Create a Budget
Most college students and young adults neglect the importance of establishing a budget. Listing your expenses and tracking your spending helps to separate needs from wants. Budgets also help to eliminate both stress and overspending.
Utilize Online Resources
Taking advantage of online financial services via apps or websites makes money management easy and convenient. Apps, such as Mint, enable users to upload bank account and expense information so that you can handle all of your accounts in one place. This helps you avoid missed payments and penalties, as well as easily access all of your account balances. Online banking and banking service apps are another type of resource and they allow you to easily transfer money and make mobile deposits.
Take Advantage of your Student ID
In addition to free entertainment options, many colleges offer advantages for students through their ID cards. Hundreds of brands and retailers offer discounts for students as well. Taking advantage of these discounts is likely to save you money on things that you already buy.
Choose and Use a Credit Card Wisely
There are certain situations where a credit card can be extremely convenient. A strong credit score can also make you eligible for loans that you may need or want during or after college. However, it is vital to do your research before applying for any credit card because different cards offer a variety of different perks and/or drawbacks. Using your credit card wisely and avoiding debt can positively impact your financial future.
Learn to Save
College is the perfect time for young people to begin to understand the value of saving for a large purchase or unexpected emergency. Learning to save money now will lead to a lifetime of increased financial security.
College is loaded with new experiences, and while it is important to get involved with activities, meet new people, learn, and have fun, it does not have to involve extravagant spending. By being responsible, logical, and using your financial knowledge, you can learn to take a hold of your finances early and it will benefit your financial future. With practice and time, students in college can learn the vital money management skills that they will carry with them throughout their lives.
Author: Hannah Grayem
Editor: Nicole Egel