It’s the end of your first week back at college, and you already want to go out with friends. But first things first – how do you manage your money? Financial advice for college students can seem like a daunting undertaking!
Luckily, it doesn’t have to be hard to stay on top of your finances if you set clear goals for yourself.
Whether you’re looking to save up for a summer adventure or just make sure you don’t end up eating ramen noodles every night, here are some tips on how to spend your money wisely and still have fun!
Smart Financial Goals/ Advice for College Students: How to Spend Your Money Wisely and Still Have Fun!
1. Build Your Credit Score Now: It’ll Help You in the Long Run
If you want the bank to take you seriously and give you a mortgage, car loan, or rent an apartment – they’ll be looking at your credit score like a hawk.
So, if you want to stay in the good graces of financial institutions, your first step is to understand what affects your credit score:
- Missed payments
- High balances on credit cards
- Financial accounts in collections
- Too many inquiries on your credit report
- Low credit utilization
- Too many hard credit inquiries
Then, you can try getting a low-interest personal loan or 0% APR credit card from your bank and use it to pay for your bills.
Just make sure you pay them on time, or else the credit score gods may not be so kind to you!
2. Bank Fees Aren’t Worth It: Go For a Maintenance Fee-free Account
Maintenance fees are what some banks will charge you monthly to have an account with them. Most of the time, banks that charge these types of fees won’t offer perks that you’ll find useful.
So you’ll be better off finding a credit union, online bank, or financial institution that won’t charge maintenance fees, yet offers benefits like secure accounts, lower fees in other categories, and insured deposits.
3. You Have a Student Discount for a Reason: Use It
When figuring out ways to reduce your expenses, don’t forget about that student discount you’ve been holding onto!
You can use it to get discounts on cell phone plans, which could save you some serious moolah. But don’t just settle for the student discount – always compare your options and make sure you’re getting the best value for your money. After all, we don’t want the credit score gods to frown upon us!
4. Budget Yourself, but Leave Yourself Some Flexibility
Since college is a unique experience, you’ll likely want to splurge. But that’s the worst thing you can do—even with financial aid. Before you start school, you’ll need to create a realistic budget. That way, you don’t run out of money.
Don’t worry I have got you covered on that topic as well! Here is a detailed Guide to setting up your college budget. Because having to worry about money while you’re in school can hurt your college success.
When budgeting, you’ll need to consider your financial goals. If you’ve received funding to go to school through a loan, you’ll want to consider that in your budget. We’ll talk more about that later, though.
Anyway, to build a budget, you will first need to go through all of your expenses then figure out what’s unessential and get rid of it. Afterward, break down your total income and divide it into expense categories like:
- Tuition and fees: if you received a loan, you will want to consider having this as your loan repayment’ category
- Laundry
- Groceries
- Rent or student accommodation
- Transportation: car payments, vehicle insurance, parking, or public transportation
- Cell phone plan
- Medical expenses: medications, checkups, and dental
- Money that goes into an emergency account
- Entertainment: you need at least some money to set aside to relax
4. Open an Emergency Savings Account: Financial Advice for college students
One of the smartest things you can do financially is open an emergency savings account. You never know when you’ll get into a car accident or have to take a trip to the hospital.
If possible, set aside 10% of your earnings and put it into a high-yield savings account (HYSA). This type of account will allow you to make money in interest while being able to withdraw your money whenever without having to pay early withdrawal penalties.
How much do you need in an emergency savings account, though? You’ll want to have enough money to pay for at least 3 to 6 months worth of your expenses.
To prevent forgetting to deposit money into your emergency account, set up automatic payments from your main bank account. Schedule it to deposit however much you set into your emergency savings account monthly.
5. Track and Control Your Spending
Even when budgeting, you may accidentally go off the rails or impulsively shop. Or, you may be spending more than what’s necessary on, for instance, food. Most modern banks come with software that will show you what categories you spend money on.
Or, you can download expense-tracking software like Mint and use it to figure out where you’re spending. From there, you can figure out ways to reduce the amount you spend. I have got 7+ Amazing Hacks to help you save money as a college student.
For example, if you find yourself spending too much on groceries, you can save money by either buying in bulk or getting off-brand items.
Related: Master Grocery Shopping List For College Students
6. Only Buy What You Need: Financial Advice for College Students
Here’s the deal: if you need something, get it.
But if not, save your money and put it towards something more important…like your tuition fees! Look, don’t be like me and end up with four different pairs of the same style. That’s a fast track to Financial Ruinville. Unless it’s in your budget, don’t buy it!
So if you have the urge to buy something unnecessary, remember this: Financial Goals > Unnecessary Shopping. Be smart with your money!
7. Create a Debt Payoff Plan Early
Once you graduate, you’ll only have a 6-month grace period before you have to begin making payments toward paying off your student loans. If you’re not working yet, this can cause issues as it will throw a massive monthly bill at you out of nowhere.
To get ahead of the curve, you’ll want to plan how you will pay off your loan ahead of time. As long as you’ve followed some of the other financial tips on this list and have any income, you can put it in savings that you’ll use for your loan.
It doesn’t have to be all work and no play when you’re a college student.
With the right kind of financial goals, you can have your cake and eat it too. You can have the money to have some fun and still save up a sizable amount for when you graduate.
So, don’t be afraid to splurge a little here and there, just don’t go crazy. And most importantly, make sure you’re investing in your future by putting money into savings and establishing a budget that you can stick to.
Financial goals don’t have to be boring! You can still have fun and stay on top of your finances.
This post is all about spending money wisely and financial advice for college students.
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