So you’re off to college and that means you’ve taken some form of financial responsibility. Maybe you’ve taken out a loan to pay tuition, or you’re solely responsible for covering rent.
Regardless, it beats knowing a few financial tips to survive college. Considering that the vast majority of college students are working part-time jobs, these next 6 financial tips are even more important.
So with all that said, let’s see what every college student can do about their finances.
Create A Budget
No doubt the easiest thing college students can do is create a budget. Following that budget, on the other hand, is the tricky part. But how do you do that? Well, it’s quite simple actually.
To create a budget, students will need to put side by side income and expense and calculate the difference. If the income is greater than the expenses, then you’re making more than what you’re spending. If the opposite is true, then you need to follow through with this article.
Rethink Your Spending Habits
So you’re spending more than what you’re earning. Is there anything you can do to solve this problem? Of course, there is. Our spending habits greatly dictate our finances.
If you have to buy shoes every month, then you’ll end up in financial ruin. So instead of doing that, why not rethink how often you should buy new shoes? This is a very straightforward tip that has immense influence over how you spend your money.
Changing habits isn’t easy as it is inherently tied to your lifestyle.
Rethink Your Lifestyle Needs
Continuing from the previous point, your lifestyle needs’ aren’t necessities. That’s precisely why this tip is so important. Putting aside what society asks from you can be quite difficult. You might hang out with people that live more luxurious lifestyles than what you can afford.
As a matter of fact, social pressure is a huge reason why so many college students make poor financial decisions. The average student racks up more than $6,500 in debt each year, according to APLU.org.
As one can imagine, tuition loans make a huge percentage of that debt. But it doesn’t have to be this way. By rethinking both your lifestyle and spending habits, you can work towards eliminating debt instead of accumulating it.
Considering that, according to the same post, 42% of public university students live with $0 debt, it is entirely manageable.
Build Credit History
If you’re quite the bookworm, then learning about how to build credit history is important. As it would seem, many financial books teach young students the importance of doing this.
Credit history is important as many financial establishments look at it when you ask for a loan. So the more credit history you have, the more favorable you are.
But it’s not as easy as that. You can build credit history and still be undesirable with the bank. That’s because you need to build a credit history and make timely payments to establish a good credit score.
The better the credit score, the bigger the chances you’ll be given a loan. You start building credit the moment you apply for a credit card.
Don’t Be So Quick To Take Out Loans
A very important financial tip for college students is to never take out a loan. Loans are there to help us out in harsh financial times. But college students should only do it as a last resort!
Colleges make their money through student loans. This topic is greatly debated at universities, and rightfully so as student loans should be a common topic of discussion.
The vast majority of students have no idea what taking out a student loan actually means. And if you’re one of those, we’re happy to let you know all about it.
Student loans are given to students to pay college tuition fees. While they’re not inherently bad, they do become that once you start missing out on your repayment deadlines. The more you miss out, the bigger the fees get.
This is precisely how this one student got into $500,000 worth of debt. That can all be avoided if you think twice about taking out a loan.
The smartest thing college students can do is to start saving early. This is one of those “life tips” that also apply to finances. Saving money as early as possible puts you in a very good position.
You can do that by opening a savings account. While the interest is quite marginal, meaning you won’t earn very much if you don’t add a lot of money, it is still a means to help you manage your finances.
So you can use that money next time an emergency comes.