If you’re on your way to college and the only financial worry you’ve ever had up until this point was deciding how much of your weekly allowance you could afford to blow on iTunes, it may be time for a reality check. Even if your parents are going to be footing the bill for some or all of your college costs, you’ll soon be in the position to start making all kinds of big and small money decisions for yourself — and that’s a responsibility that can be much more challenging than it sounds.
If you’ve never balanced a checkbook, paid a bill, or gone grocery shopping, you may be in for a bit of a shock – and you’re not alone. A recent study conducted by scientists at the State University of New York-Buffalo School of Management indicated that only 52.4% of current high school seniors could pass a 30-question test on basic financial principles. But with a bit of research and advance planning, you should up to speed in no time.
Develop Your Own Financial Plan for College
Every college student’s financial situation is unique, so the money concerns you’ll have to address to prepare yourself for campus life are likely to be different than those facing your friends and classmates. But before you pack your bags for college, be sure that you set aside some time to talk things over with your parents or another trusted and knowledgeable adult. Here are a few basic financial topics that every college student needs to consider:
• Decide on the right kind of bank account. Are you going to have access to an account established by your parents, or will you need to set up your own local account? Make sure you’ll have reliable on-campus ATM access.
• Sketch out a basic budget. If your parents are contributing to your living expenses, ask them about the spending limits that they’re comfortable with. If you’re going to be on your own financially, set up budget categories for all of your ongoing expenses, such as food, transportation, clothes, books, and socializing, and estimate basic spending targets for each category.
• Tread carefully with credit cards. Credit card companies have come under fire in recent years for their aggressive pursuit of college students. Your best bet is to avoid the credit trap altogether, with the possible exception of a single card that you use only for emergencies, as well as for establishing a record of good credit that will come in handy after college.
• Determine how much income you’ll need to keep afloat. If you’re going to be depending on a part-time job to help pay for college, determine the number of hours you’ll have to work each week to make ends meet. That way, you’ll already have your ideal work schedule in mind when you arrive on campus and begin applying for jobs.
• Have fun – but be responsible. The most difficult challenge that new college students face is balancing their newfound freedom with their long-term goals, and this challenge extends into the financial realm, as well. College is a once-in-a-lifetime experience, so live it up – but don’t do it in a way that may jeopardize your long-term happiness and security.
Are you a financial wizard or a money dummy? Do you already have a financial plan in place for college? How do you plan to make ends meet on campus? Talk back in the comments.
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