By Charlestien Harris
Congratulations! You have graduated from high school and are off to college! Your college financial plans might seem bigger than your wallet. If so, you are among the countless students who need advice and tips to save money in college. Fortunately, you can learn to cut down on expenses now, even if you did not pick up those pointers at home. Most of these tips are simple and can be easily implemented. Here’s what I recommend for college students who hope to successfully navigate this new financial space.
- Know how far your parents will extend their financial support. Most likely, things are going to change for you financially once you start school. Before you head off to that college campus, ensure you and your parents are on the same page about how much financial support they are willing/able to provide. Be sure you know how much of your education you are expected to pay for, and if they are assisting you, how much they will contribute and for how long. Will they help you with living costs, such as trips home or covering your phone bill? Do they expect you to get a job, or will they cover these extra expenses? Remember, having you in college is an adjustment for them too. If your parents are helping you out, make sure they have the information they need to pay bills on time, keep their own records, and file their income taxes.
- Open a bank account to handle your financial needs. Carrying cash might have worked while you were living at home, but having cash on you on a college campus may not be the best idea. You may want to find a banking solution that will work for you while you are in college. Here are some great reasons to open a bank account:
- It’s a lot safer than leaving money in your dorm room or apartment. When your money is in a bank, it’s protected by vaults and security guards and is federally insured.
- It allows you easy access to your money. You can purchase things with a debit card and withdraw cash at any time from an ATM.
- When choosing a bank or credit union, make sure you ask plenty of questions about the different types of accounts and services they offer students. Also, don’t forget to ask about the fees, if any are being charged, and for what. Consider your lifestyle and needs. Think about factors such as the bank’s location and services and what you want to be able to do with your money. You might even consider an online-only bank for convenience.
- Develop your own money management style. There is no right or wrong way to manage your money. There is no fast rule that says you have to handle your money like your parents, but you will need to put a plan in place as quickly as you can. You are going to do things differently than your family or friends, but the most important thing is that you develop a spending plan and stick to it! One important thing to remember is to know what your money story is so you can make any corrections necessary to stay on track. The more informed you are about your choices, the better you can understand your spending patterns or habits, which can be good or bad. Try to align your spending habits with your value system. Don’t be afraid to say “no” to something your friends want to do if it’s going to take away from your greater goals.
- Be very careful when choosing a credit card and learn how to manage the use of credit wisely. Credit card companies make signing up for a credit card incredibly easy for college students. When I was in college, they were always offering gifts and school gear to entice me to sign up! I came from a background of using cash more than credit, so fortunately, I did not get hooked into signing up for those credit card offers. My advice would be to take time to research your options and try very hard not to say “yes” to any offer that comes your way. Make sure you clearly understand the terms and conditions, fees, and perks of the card first. Also, avoid chasing after rewards. If you are considering a rewards card, make sure you’re not getting a high interest rate and unforgiving terms in return. Never cosign for someone else’s credit card. If you do, you’ll be legally liable to repay any debt that person incurs.
- It is never too early to develop good savings habits. You might ask, “What is the secret to saving money as a college student?” The answer is the same even as an adult – learn to consistently put away a little at a time. Learn to pay yourself first! It might not seem like much at first, but it can add up in the long run. Make it automatic. Set up an automatic withdrawal from your checking account to a savings account each month – that way, you won’t even miss it. Create an emergency fund. What will you do if your car breaks down, you lose your job, or you have to spend the night in an out-of-town hotel? Crises happen, and they can be a lot less stressful if you have some extra cash saved up. Keep it separate from other savings, use it only for emergencies, and replenish it after you get back on your feet.
College is an investment of your time and money. While being a college student can sometimes feel financially stressful, learning to manage your money can empower you to feel more in control of your budget and financial future. For many students, college is the first time they get to pay for things independently. Just like with any other new life skill, learning how to manage your money and avoid financial mistakes can take time.
For more information on this and other financial topics, visit www.banksouthern.com/blog. You can also email me at Charlestien.Harris@banksouthern.com or call me at 662-624-5776.
Until next week – stay financially fit!