Managing Your Money

One of the most important skills to learn as early as possible is how to manage your money. Knowing how to budget your money and establish good credit for yourself is invaluable for life as a college student and as an adult. Here are some essential steps to make sure you stay in great financial shape throughout your college experience:

1. Establish a budget. Take the time to think about what you will need to spend money on and how much you should spend. What are you spending on textbooks? Supplies? Food or snacks? Leisure time? Make a list or table of where your money is going and subtract that from the total amount you are allowed to spend. Keep thinking of new ways to save as well. If you won’t be using a certain book for the entire semester, try finding it at the library. Instead of buying a new textbook from the school bookstore, try renting one from a cheaper retailer such as Amazon or Chegg.
2. Spend less on things you don’t need.You would be surprised by how much money can go into things that seem like small payments at a glance. For example, going and buying a coffee at Starbucks every morning can really add up in the long run. Eating out with friends once in a while is fine, but it shouldn’t become a habit. Do you really need to pay for Netflix, Hulu and Disney+ when just one service will do? Separating what you need to spend money on from what you want to spend money on is a valuable skill that will assist you for the rest of your life.
3. Get a savings account.Saving up for your college education requires putting away money in order to help pay off whatever loans you end up taking out. Getting a savings account at your bank is one of the best ways to keep that money secure for when you need it. A 529 plan in particular lets your money be invested without having to pay taxes when you use it for college tuition and student loan payments.
4. Be careful with credit cards.Credit cards can seem like a “get-out-of-jail-free” card when it comes to money. They are also a great way to build up your credit score early. However, you can wind up owing a very large debt and ruining your credit score if you do not pay on time. This can follow you for years after college is over. Make sure you only spend what you can immediately pay back, and set reminders for the due dates of your bills.
5. Minimize loans.While it may be necessary to take out loans to pay for your college education, borrowing as little money as possible means paying back less money in the future. Remember that you will have to pay back everything you take, so only borrow the absolute minimum amount required for you to afford your education.
6. Get a job.Getting a part-time job in college can help you with your money in a few different ways. You can put away some of the money you earn to help with your expenses, while using the leftover money as spending money when you want to treat yourself to something nice or a night out with friends.

These tips are only a few ways that you can keep track of and manage your spending. Ask your parents about their own spending habits, and have them help you set up a plan for your own if they can. As always, keep thinking about whatever you need to ensure your future success, whether academic or practical, during your college education.