Going away to college can be a vehicle for new found freedoms. Thus, accountability is lessened and responsibility is heightened. One important responsibility that should not be taken lightly is money management.
For most students, money is not an easy thing to come by; however, it is extremely easy to spend. The consequences of poor handling can lead to a much rougher financial future. Here are some tips that you might be wise to consider:
The first step in money management is assessing exactly how much income you will receive per month, whether it comes from a job, tax return or maybe from family. Then balance that amount out with your monthly expenditures. Create a plan to budget that income and stick to it. It may help to make a chart to give you a visual perspective on how the money is being spent.
Here is an example of a Monthly Expenses worksheet:
|Educational (tuition, fees, textbooks, supplies, etc.||$|
|Food (eating out)||$|
|Transportation (gas, maintenance, public transport)||$|
|Insurance (car, health, renter’s)||$|
|Other (childcare, etc.)||$|
|Total Income minus Total Expenses||$|
It is very easy to lose touch with how much money you actually have when you use several different tenders on a daily basis for whatever you spend on. As I mentioned previously, having a visual perception on the flow of your money can assist you in preventing destructive splurging habits. The benefit of using only cash is its tangibility, which encourages a certain respect of money that is needed in order to manage it well. Writing checks, using debit or credit cards indiscriminately can give a false awareness, and put you in danger of overdrafts and nasty bank fees that add up and deepen the whole.
Credit cards and money from loans should be looked upon as a last resort. Too often, students get carried away with credit card spending as if that money actually belonged to them, not taking into consideration the interest that is accrued and it being borrowed money.
When emergencies arise, see how much money from your monthly income is available. The goal is to lessen, as much as possible, the amount which would need to be placed on your credit card.
Also, be diligent about which credit card company you get your line of credit from. Make sure the interest amount is low, and read the fine lines about any hidden fees. Stick to one credit card as opposed to having multiple. Having more than one credit card can get ugly and opens doors to more possible debt. Paying off school loans is strenuous enough, coupling that with credit card debt only makes worse for the wear.
The obstacle you must over come with regard to credit cards is you! Have self-discipline. Think of ways to resist temptations of using your credit card whenever you get the chance, and be creative. For instance, you can avoid problems by not bringing it with you when you are out, or take more aggressive measures by placing it in a soup can full of water and freezing it, only thawing it out when dire situations occur.
Finding a job on campus can alleviate so many frustrating elements that an off-campus job can bring about. On-campus jobs are also more flexible with your study schedule. There are many resources that can point you to a job on-site. Try searching for an on-campus job that pertains to the field of study you are interested in. This can only look good to future employers.
On most college campuses, having a car is almost unnecessary. The need to drive long distances for the daily essentials is not reality in a college setting when most everything you would need for day-to-day life is at your fingertips. So why the need for a car? If, in order to save on funds, you can get rid of a gas expenditures, insurance, maintenance, repairs and/or a possible payment, why not jump on the opportunity? Public transportation or carpooling might be a money-saving solution for you.
Another way to have effective money management skills is to know how to shop for the bargains. You can cut back dramatically on costs by choosing the less expensive product, using coupons, shopping at a thrift store for clothing items, which, by the way, can be fun and fashionably forward, and keeping your eye out for student discounts. Be sure to have your student ID ready.
Unnecessary spending is the hardest hill to climb and conquer when it comes to money. So often, students do not realize that the things that they are buying are actually unnecessary and frivolous. The challenge comes in acknowledging which patterned purchases are inessential and which should be made out of need.
In order to identify these things, it is important to begin to track spending by saving and filing receipts. It may help to label the receipts and place them in categories, i.e., food, school, entertainment, etc. There are also many different online budgeting systems that can track your the spending directly from your bank account, if maintaining paperwork is not your strength.
If an online budget system approach is more appealing versus a paper method, my recommended website for online budgeting is Mint.com, which offers a free, easy set-up and efficient, straight-forward approach to your budget. It links directly to your bank account, tracks, computes, and categorizes your spending and also graphs out spending habits so you can see which category of costs your spending is emphasized in. You create your budget and Mint.com will calculate how much money is left or spent in that allotted pool. Mint.com
Having a good handle on your money is not an unattainable thing, and if you tend to be a spender, keep in mind the consequences of being rash in this regard. Let that motivate you to self-discipline and diligence. Learning good habits now can pave a better financial future for you. Remember that money management matters!
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