Your time at college will come with a lot of firsts. It’s your first time living far away from home, your first time living with roommates (who you aren’t related to), and of course, your first time handling your finances all on your own. These are some tips that will help you manage your money:
Make a Monthly Budget
You’ll have to organize your funds for housing, food, school and more all on your own. If you want to have an easier time keeping track of these essential costs, you should put together a monthly budget as soon as possible. With this simple financial tool, you can see exactly where your money needs to go every month so that you don’t spend beyond your means and suffer the consequences.
How do you start? You can download one of the top budgeting apps on your smartphone and fill out the details. Most budgeting apps can sync with your online bank accounts, which makes it easy to track your expenses down to the penny.
Consider Emergency Expenses
Sometimes things go wrong. Maybe your laptop gets stolen from your backpack, and you need to get a cheap replacement fast to finish the rest of your term. Maybe your car breaks down in the middle of the road, and you need to pay for a tow truck and repairs. These are emergencies that you can’t afford to ignore, even if you don’t have the savings to pay for them.
So, what can you do? You have a few options at this moment:
- Use your credit card
- Use an online loan
- Ask your parents for help
If you have a credit card, you could put the expense on there. Before you put the charge on your card, check to see whether your balance is close to the limit. If you’re too close to the limit, you should refrain from using this option. You don’t want to risk maxing it out.
If you don’t want to put the charge on your credit card — or you don’t have one — you can take out cash loans online to help you handle emergency expenses. You can quickly access the funds to fix your problem and then manage your repayments later on. You should only apply for online loans when it’s absolutely necessary. These are best left for emergencies, not for things that you can afford to live without (for example, an upgraded smartphone).
And finally, you could call your parents. Your parents might have the savings or credit available to help you pay for this emergency. Calling might bruise your ego, but it’s better than upending your personal finances just to maintain your pride.
Your parents might treat their financial help as a personal loan, not a gift. In that case, you should let them know how long it will realistically take you to pay them back. Giving them an estimated deadline will show them that you’re putting in the effort to repay them. This will hopefully save you from any lectures about financial responsibility.
You can avoid this situation entirely by dedicating a portion of your monthly budget to emergencies. These savings could help you cover the costs without the help of credit tools or your parents.
Start Your Relationship with Credit
If you don’t have a credit card yet, you should look into getting one. The earlier that you start building your credit, the better.
Look for credit cards designed specifically for students. These will have low interest rates and low fees. You can apply for a credit card on your own when you are 21 years old or older and have a steady income. If you’re under 21, the 2009 CARD Act states that you will need an adult co-signer to get approved. A co-signer agrees to repay a creditor when the applicant fails to do so. Your parent or guardian could act as yours.
Start on the right foot with your credit card by setting online reminders for upcoming bills. These reminders should help you remember to pay those bills and avoid racking up late fees. Paying your credit card bills on time will do more than save you money. It will help you raise your credit score.
What’s your credit score? This is the ranking on your credit report that helps lenders determine whether you’re a responsible credit user or not. It will come in handy when you want to apply for a new credit account or loan. A high credit score often leads to lower interest rates and insurance premiums. It could also make it easier for you to buy a car, rent an apartment and even get a good cellphone plan.
Managing your money properly isn’t something that you can really learn through a class. It’s something that you learn in practice. So, follow these tips and take control of your finances this year.