Eight Financial Tips for College Students
ningcontentIf you’re a college student, you’re learning about a lot more than what’s inside your books. Living away from home is a veritable laboratory for life lessons. This year, in addition to whatever courses you may be taking, try to master some financial lessons, as well.
Of course, many students already have at least one foot in the “real world,” because, in addition to taking classes, they’re working many hours a week to help pay for school, rent, and living expenses. But even if you’re a full-time student, living on campus, and paying for school through a combination of grants, loans, savings, and help from your parents, you can learn some financial basics that will help you throughout your adult life.
Specifically, consider these pointers:
Don’t overuse credit cards. Credit card marketers aggressively target college students, so you’ll need to be vigilant about all the offers that will bombard you. While it might not be a bad idea to carry a single credit card for use in emergencies, it’s very easy to over-use the “plastic” and rack up big debts. You’ll need to discipline yourself to save for the things you want, rather than charging them.
Shop around for financial services. You’ll find plenty of banks willing to give you a T-shirt or a frying pan for opening an account with them. But these places may not be offering you the best deal on checking or savings accounts or loans. It pays to shop around. Find a no-fee bank in your area, and get in the habit of balancing that checking account each month. Use your debit card rather than a credit card so you don’t get into needless debt.
Keep track of your student loans. Make sure you understand all the terms of your student loans: how much you’re expected to pay each month, when payments are due, what interest rate you’re paying, what credits may be available for on-time repayment, etc. You might be able to achieve a more favorable repayment schedule by consolidating two or more loans. Once you start repaying your loans, do whatever you can to stay on track with your payments.
Never stop looking for financial aid. The aid package you may have received as an incoming freshman doesn’t have to be the final word on financial assistance. Colleges offer some scholarships based on college-level academic achievement or real-world experience–both of which you may have accumulated since your freshman year. Study your college’s scholarships and be aggressive in going after them.
Acquire the budget habit. Budget is not a four-letter word. Done well, it is a practice that will enable you to be creative and flexible with your money. A well-followed budget can help you live without financial stress, afford big-ticket items, and make the most of your earnings.
Be a smart consumer. Learn how to negotiate for a better price on goods and services, and how to comparison shop. You can stretch your dollar by being a smart shopper–buying used or factory refurbished items, getting “off” brands, waiting for sales, asking for scratch and dent specials, etc. It never hurts to ask for a lower price or a deal.
Get your money growing. Since you’re a college student, you probably don’t have a lot of extra money. But whenever possible, put away a little each month. It might be as little as $20. The Motley Fool website has an instant calculator that shows how much your savings will be worth over time (http://www.fool.com/teens/teens13.htm). Save for a rainy day and you’ll be glad you did.
Estimate your future income. You may not know exactly what you want to do when you graduate, but if you have a career path in mind, try to learn what sort of salary you can expect during your first few years out of college. Once you have a realistic idea of how much you’re going to earn, you may have the motivation you need to avoid bad financial practices, such as accumulating big debts.
College should be a learning experience–in many ways. And if some of the knowledge you obtain during your college years can help you develop sound financial habits, so much the better.
Randy Loren (www.randyloren.com) has more than two decades of experience in many areas of business and finance, and is currently a financial advisor for Edward Jones and a sought-after motivational speaker who educates high school students on the value of financial literacy and sound money and work practices. He is author of a new book, Climbing the Money Mountain: The Young Adult’s Guide to Reaching Your Financial Peak (FN Publications, $19.95).
