At a time where finances are tight and with so many other things going on, managing your college finances can be tough.
By doing this, you will begin to understand exactly what you are spending your money on. Every time you make a purchase, large or small, you will have a rough figure in the back of your head. If you go over budget, it is more of a mistake than financial ignorance.
A budget is a simple but completely undervalued concept. All you need to do is map out your income against your outgoings, then use that to find out how much money you have left over for spending or saving.
Income includes wages, parent funds, student loans and other financial aid. Whereas your outgoings could include books, transport, college credit cards, hair appointments, concerts, and whatever else makes you splash your cash.
Once you know how much money you have to spend or how much money you have left over to keep you in the black, you need to stick to it. There is no point knowing how much you have to spend if you just ignore it. Lapses will happen and no one is perfect but to limit the damage you should make room in the budget for a buffer fund for one-off indulgences if you can.
Financial apps and software are a great way to modernize your take on money management. Manually entering every penny into an excel sheet can very quickly become monotonous and tiresome, putting you off managing your finances at all. This is a huge mistake but with new mobile apps and personal finance programs, managing your finances couldn’t be easier. Personal finance management software makes the whole process of managing your money faster, more accessible and more attractive to the younger generation than ever before.
A college credit card is an incredibly useful tool to have. A credit card essentially gives you access to funds instantly and is very handy in an emergency. As a student, you are unlikely to have a high credit score or a credit history at all. This can prove to be a problem when you are applying for your first college credit card. A good way to improve your chances of approval is to get a parent or guardian to co-sign for your credit card or to apply for a prepaid credit card.
Once you have your credit card, you should use it sparingly for small routine purchases to ensure you do not exceed the limit and can clear the balance on a regular basis. Credit cards tend to have higher interest rates than other forms of borrowing and debt can quickly mount up if you fail to clear the outstanding balance.
The reason you should still regularly use your credit card is to build up your credit rating as soon as possible. A strong credit score will make borrowing money a whole lot easier in the future.
Getting the right credit card and using it correctly can actually save or even earn you money. Specifically, college credit cards offer exclusive benefits and discounts only available to students. There are credit cards that are linked to your GPA and can offer discounts on textbooks, groceries, gas and much more.
Don’t be blinded by the benefits. If a credit card offers great benefits, make sure that there are no fees or obscenely high-interest rates that could cost you dearly.
Exploring your options can never hurt, but in the case of student funding, it can be hugely beneficial. The more you can avoid borrowing the better. There is a whole host of student grants, scholarships, and other funding options available.
If you do need to resort to borrowing, look into alternative student loans. Federal student loans are not always the best option, you can borrow privately at a low cost. Federal student loans are hugely popular but you should look to see if there are any banks offering more beneficial terms.
Textbooks are expensive and take a sizable chunk out of your yearly budget. You should only spend as much as you need on textbooks. Renting or buying used textbooks is a great way to save hundreds of dollars a year. Used textbooks or older editions are often every bit as good as the updated versions but come at a fraction of the cost. As long as they can still be read and are not falling to bits, you should certainly take up this option. Older students are a great source for this and are more than happy to get rid of their unused books.
When you are finished with your books, you should look to sell them on and try and recoup some of the cost. If you plan on doing this, you should ensure you do not deface the book in anyway with side notes. You can either pass your books onto fellow peers or sell them back to the shop where you initially bought the book. They will usually advertise if they have a buyback policy for textbooks when you buy your book.