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Financial Advice for College Students

If there is any time in a person’s life where being broke is expected, it is during college. But fitting the “starving student” image should never be an excuse for being irresponsible or unconcerned about money. If you work it right, being broke does not mean you have to suffer.

These tips will help you keep money in your pocket and make college what it should be—one of the best times of your life.

  • Credit cards are for emergencies – Students often get into early financial and credit problems through credit cards. But before you swear them off—a credit card will help you establish credit history. Kind of like a financial transcript, banks and other lenders use your credit history to evaluate whether they should give you a loan or credit.

    The key is to understand the terms and use your credit card responsibly. Be wary of low introductory rates, which can climb up to 20 percent or more after a few months. Don’t sign up for a card just because there’s a guy outside the student union offering a free t-shirt. Shop around and compare different cards. Read all the terms of the agreement and ask if there’s anything you don’t understand.

    After you’ve read all the fine print for your new card, resist the urge to take it out for a spin. Don’t pull out your plastic unless you have the money to pay for the purchase. It’s really best to keep your credit card for emergencies and not use it for everyday expenses and entertainment.

  • Get the best checking and savings account – Look around before you open up a bank account. Some banks may offer better benefits such as:
    • Overdraft protection
    • Higher interest rates on savings accounts
    • Lower or less service charges

    Try to avoid banks that:

    • Charge fees for simple things such as dealing with a teller
    • Limit the number of deposits and withdrawals you can make
    • Have high ATM fees
    • Require you to maintain an unrealistic minimum balance
  • Make a budget – Overspending is a problem for most of us. College students are more susceptible to overspending due to the allure and excitement of being independent. Having a budget will help you see what areas you indulge in and how to adjust. Live within your means.

    More info:
    Budgeting Tipsheet
    My Spending Plan Worksheet

  • Be a smart shopper – Going out every other week and purchasing designer duds is as counterproductive as cramming for a final the night before. Check out the “clearance” rack and try shopping at thrift and second hand stores. A good alternative is to buy from clothing resell stores that specialize in used designer labels offered at deep discounts.
  • Set a limit on going out – As a student, it’s understandable that you’ll want to go out and enjoy yourself; you probably deserve it. But insisting on going out every night can become a problem. Set a realistic monthly budget for entertainment and stay within in. Nothing feels worse than depleting your money on happy hours and bad movies.
  • Money and discounts are everywhere – Scholarships and discounts are abundant when you are a student. Apply for scholarships as much as possible and get used to asking for student discounts wherever you go.
  • Get a job – With a full course load most students can only take on a part-time job. Try working on campus or somewhere that’s low on stress and within the field of your major. As long as it doesn’t compromise your schoolwork, take on any extra source of income you can.
  • Walk, bike and bus – Public transportation around most universities is efficient enough to get you where you need to be. Invest in a monthly or yearly pass and save money that would otherwise go towards gas and car maintenance. Walking and biking not only saves you money, but also keeps you in shape.
  • Learn how to cook – Eating out is a major drain on a college student’s income. Not only is eating out expensive, it’s often unhealthy. Instead, do some grocery shopping and pack lunches for those longer days. Shopping with friends or roommates at a bulk foods warehouse can save you money and make trips to the grocery store less frequent.

The keys to a successful budget are getting started and sticking with it. Now that the plan is set and your expenses are accounted for, you can start budgeting your money towards meaningful financial goals. But don’t forget to budget for some fun spending too.

 

Last modified: April 11, 2011 at 3:51 pm