Money management isn’t the most exciting topic, but it is one of the most important areas to develop as a young adult. College is the time when you should be building skills that will support you as you transition into adulthood. Even if you’re still living at home and getting money from your parents, you need to know how you’ll manage your own income in the future if you want to thrive. Not being able to finish your studies just because you did not plan ahead, is something you will want to avoid in the future.
There’s a lot to cover, and the ideal budget doesn’t exist. Everyone’s income, obligations and priorities are different. Rather than tell you definitively how to manage your money, this brief guide will tackle the core principles that every student needs to make money work for them.
Stop Avoiding Loan Talks Now
While you’re in school, it’s easy to push the worrying thought of debt to the back-burner. You figure it’s not your problem until you graduate, and you’ll worry about it when the time comes. While you don’t need to get yourself worked up into a panic about having debt well into your 50s, you should see how you could be saving money now.
Did you know that not all loans are made equal? It’s not just about principals and interest rates either. Consider how a loan’s repayment plan can impact your future and how borrowing more money now could spare you from borrowing too many loans later. Talk to your parents or guardian about becoming a cosigner on a student loan. This can help you access more funding and help unlock a low rate on what you’ll pay in interest.
Start Setting Limits
In college, spending money is often thrown left and right without any thought of savings. Even students with a part-time job often treat their paychecks like free-for-alls instead of genuine financial assets. Don’t make this mistake. Rather than letting money funnel in and out of your bank account, set a limit on how much you’ll spend each week. Weekly limits are easier to stick to than monthly ones, and you’ll find it’s easier to adjust for any necessary expenses as well.
Avoid Using Credit Cards
While you should get a student card to start building a good credit score in college, don’t begin relying on your card instead of cash. Interest rates can quickly make monthly bills unmanageable, and you’ll also struggle to get private student loans if you have a low score. Use your credit card for necessary things like groceries and transportation. You can even throw on small charges like a coffee or lunch with friends. Make it manageable so you can pay it back each month on time without incurring additional fees.
Find Fun Ways to Make Money
It might sound silly, but making money can actually be fun. You have a lot of freedom in college, which means you can do things that are typically inaccessible for adults with 9-to-5 careers. Host a car wash, dog walk, babysit or gather some friends on campus and host a carnival. There are plenty of ways you can make money and have fun doing it, so get creative. This is also a great time to put your entrepreneurial skills to use and identify pain points around campus that could turn into profitable solutions with a little elbow grease.