When you are in college, away from home, balancing that bank account can suddenly feel monstrous and overwhelming. If you are not careful, you can lose control over your finances very quickly. Managing your money in college requires a certain amount of skill and willpower but you can do it with these proven tips.
Create A Budget That Includes Everything
Most of us don’t realize how much we spend every week or every month. We add up the big purchases and completely discount the smaller amounts that we spend. If you kept track of your expenses faithfully for a month, you’d be shocked at how much the ‘smaller’ purchases can add up to.
The same thing can happen in college. If you do not keep track of your income and expenses you could be in for a rude awakening. Don’t wait for that to happen. Instead, create a budget right at the outset. In addition to helping you stay out of debt, it will also give you great insight into your spending habits.
In your budget, first make a list of all your income sources, including savings, parental allowance and income if you are working. Then make a list of your estimated expenses for the month. This list should include essentials such as school supplies, personal care items, food, travel and laundry and non-essentials such as going to the movies, late night snacks, socializing and eating out.
There are several personal finance management tools available online. Use one of these to help you track your expenses and stick to your budget. Your expenses should not be more than your income at any time. Spending more than you make is a surefire way to slide into debt.
Consider your budget a winner if you can create one that lets you save a portion of your income every month!
Control Your Spending Habits
Are you an impulse shopper? If you are, you will have to change your spending habits and learn to exercise restraint. Start by learning to distinguish between your needs and wants. That expensive software that you had not accounted for in your budget may be necessary for the program you are enrolled in but do you really need to buy the most expensive pair of running shoes? Think of what it will do to your budget. Is it worth it?
Even if the purchase is not likely to upset your budget, if you don’t need it don’t buy it. Instead, it may be a better idea to put that money towards repaying your loan earlier.
If you have to choose between two ‘needs’, prioritize what you spend on and buy the second item later. Try as much as possible not to borrow money unless absolutely necessary.
Set Up A Checking Account
Many banks offer students free checking and saving accounts facilities, which help student save on withdrawal or fund transfer fees. Find out which banks offer this facility to college students and preferably set up a checking account with a bank that convenient ATMs located in close proximity to the college campus to save on out-of-network charges.
Be Savvy About Credit Cards
Carrying a credit card is so much more convenient than having to carry cash around everywhere. On the flip side however, it does encourage impulse buying and before you know it you could amass a large amount of debt. College is a great time to start building credit, which will make it easier for you to purchase a vehicle or lease an apartment after you graduate.
To build good credit, you must learn to be a responsible credit card user. Some things you should and should not do:
- Do not go over your spending limit.
- Always pay off your credit card balance before the deadline every month. Late payments can be very steep and can push you further in debt.
- Try as much as possible not to take cash advances on your credit card. The interest on cash advances is very high and you will end up paying much more for whatever you spend the cash on.
Save Money By Buying Used School Books
It’s scary how much a brand new set of textbooks costs. Brand new editions of some subject textbooks can cost upwards of $300 each. Instead, buying used textbooks from the previous year’s students can cost you much less. There are also certain sites online that sell used textbooks for much less than the brand new price. Buy whatever textbooks you can secondhand and only then consider buying brand new. You can save a bundle this way. Ebooks are also a cheaper alternative than buying brand new hardbound books.
You can also make some money selling your old books instead of stacking them in the attic or throwing them out. Let the students in the lower class know that you are selling your textbooks at the end of the year so anyone who is interested can book it from you in advance.
Cook Most Of Your Meals At Home
You’d be surprised at how much you can save by simply eating most of your meals at home. You don’t have to give up eating out completely but those few indulgences aside, cooking at home is cheaper and it’s healthier too! Visiting a local supermarket and stocking up on ingredients for the week beats grabbing a quick sandwich or soda from the nearest deli.
Consider Taking Up A Job
Earning some extra cash is a great way to manage your money. Consider this option only if you can find some work opportunity that does not hinder your studies. Even a part-time job or working only a couple of hours a week is a great way to add to your income and pay off your student loan interest early.
Managing your money in college may seem overwhelming at first but if you lay the groundwork for smart budgeting and spending habits right at the outset, it will become easier for you. More importantly, you will learn to handle money more responsibly, a skill that will stand you in good stead years after you graduate.
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