5 Personal Finance Tips for College Students

By on August 2, 2017

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College students are notoriously described as being poor money managers, however, with a little knowledge and the right tools I’m sure they can successfully improve their skills. It may seem boring to read and discuss budgeting, mutual funds and 401(k) plans, but when simplified to be relatable to their expenses, lifestyle and happiness, any of these young adults can become successful personal finance managers.

Being responsible for your money means determining how to spend or save it. Make sure to control and keep track your expenses so you can stretch your dollar to last the entire semester. And the sooner you take hold of your finances the easier it will be to pay off those student loans and happier you will be in the future. If you’re a college student or know someone who is a student, here are five ways to manage your personal finances while in school.

5 Personal Finance Tips for College Students

1. Track Every Expense

Keep track of every dollar you spend because a budget means nothing without accurate accounting. There are many apps and templates which allow you to track your spending habits over a period of time. From there you can build a monthly budget to help you track every dollar coming in and out as you reach for some financial goal – a semester of study abroad, spring break trip or even a downpayment on a home.

While paper accounting or online money-management tools make budgeting easy, financial institutions can help you reach your financial goals and provide financial assistance when you need it. Credit unions and banks offer useful services for students such as checking/savings accounts, debit cards, online banking, balance alerts, personal loans, direct deposit and financial competency education.

Shop various institutions before opening a checking account. Check out large national banks available near you college and hometown, as well as small banks or credits unions. Compare fees for dealing with a teller, making deposits or withdrawals. Ask if there’s a fee to use a debit card or non-bank owned ATM. And if you know money management is not quite as detailed as it could be, look for overdraft protection on accounts.

2. Start Saving

Once you have a bank account set up, establish a savings plan and automate your savings to kick in a little money each week, month or paycheck. Even if you can only afford a dollar a day, you’ll wind up with over t $300 at year’s end. And with compound interest you can earn a little extra without even think about it. If you have a summer job or part-time work, don’t forget to look into Roth IRA and available pensions. It seems almost silly to not invest at least a few dollars today.

Finally, stay on top of your student loans so that you don’t get in over your head. If you can, set up an amortization schedule or at least figure out how much it will cost you to repay the loans based on the starting salary you expect to make. Factor this expense into your current savings.

Some students have even been known to put half of their student loan (not used for tuition) in a high interest rate savings account or investment to earn extra money. Then when the money is needed to pay for books or housing, it can simply be withdrawn – in the meantime the account has earned 1 – 4% interest. Keep the earned interest in the account and use the money to pay back student loans, fees and interest at the end of your degree.

3. Pay Off Your Balances Monthly or Pass on Credit Cards

There are lots of opportunities to apply for credit in college make sure you understand the responsibilities and benefits of every credit card. Credit scores and financial decisions could affect you well after graduation, so unless you know that you are are going to be strict and responsible, pass on the credit card applications until you’re more experienced with finances.

If you are ready, establishing a solid credit history can be a wise financial decision. Make sure you read the fine print of applications, compare interest rates, fee penalties and card perks. With new credit histories, expect the annual percentage rate (APR) to climb above 20 percent in three to six months.

This comes to our next important point – pay off your credit card balances in full. A credit card is a loan – that means any balance on the credit card must be repaid. Balances which are not repaid accrue interest and soon you could find that $5 latte is now costing you $25 six months later.

So unless you plan on paying those balance each month, avoid using credit cards.

4. Avoid Unnecessary Expenses

Avoid unnecessary expenses at all costs. This goes for little things like returning library books or videos to paying your bills on time to avoid interest and late fees. Most students are on a limited income outside of school tuition, so limit your spending on eating out, entertainment and transportation. And look for good bargains with student discounts and free anything!

Set an Entertainment Budget & Stick to It
Set a limit to how much you can afford to spend on weekly/monthly entertainment and stick to it. Hitting up the ATM for nightly parties, weekly blockbusters at the theatre and extra sweets is guaranteed to deplete your bank account. And if you can’t restrict your activities, looks for ways to entertain on a budget – stream a movie online or see a matinee instead of paying full price at the theatre, rent your video games, and make your own cocktails instead of pay high prices at the bar.

Use Your Campus Meal Plan & Don’t Eat Out
Eat as many meals as possible in the campus cafeteria; it’s much cheaper in the long run than even making your own food, let alone eating out. Hit the grocery store for healthy snacks to keep in your backpack for between classes so you don’t use the vending machines full of marked-up junk food. Avoid the bank account drain and belly bloat by passing up pizza delivery and fast-food restaurants. This will save you big bucks. Finally, never shop on an empty stomach – you will end up spending more to buy things you probably don’t need.

Cut Down Your Transportation Costs
Don’t bring a car to campus if you can avoid it; this way you can avoid paying parking fees, insurance, gas or maintenance. Get a bike or use the money for public transportation passes which are usually cheaper. And if you must have a car, abide by the rules of the road and parking lots, paying for tickets and parking fines are a tax on stupidity or laziness.

Look For Discounts and Free Stuff
Take advantage of available student discounts, extra perks or anything that’s free (no string attached). Many businesses give students freebies or discounts in an effort to earn you loyal business. There are often plenty of campus giveaways or on-campus clubs sponsoring buffets and luncheons with free food, snacks etc.. And be on the lookout for deals on plane tickets, pizza, books, clothes — everything.

Buy used. Shop at second-hand stores for clothes, textbooks, cars. Use it up, wear it out, make do or do without. Clip coupons and when you must pay retail, look around and see where it’s cheapest.

5. Get a Job

Another great way to earn some extra income and give yourself a reason to save for the future is to get a job. Check out college work-study programs – here’ you might find flexible positions at the commissary, library or health clinic. Finding official employment also means you should brush-up on some tax basics to help you fill out the W-2s and 1040Ez paperwork.

A job related to your studies is a good way to get a taste of what you may make a career and establish contacts in the field. Otherwise, look for a job with benefits or tips such as lifeguard-ing, waiting tables, parking cars or brewing coffee. If you have good work ethic, those tips could exceed the hourly minimum wage. And don’t forget to

Manage Your Money, Protect Your Credit and Save More For Life

College is a uniquely wonderful experience which will come with its own set of failures and successes. And though classes and fun are at the forefront of your mind, you can get a grip on your personal finances to manage the debt you will have to deal with after college. If you need help, just ask! Your parents or a financial advisor are good places to start.

By the time you get out of college, you will need these personal finance skills to buy a home, care for a family and eventually to enjoy retirement. You may not be concerned with these life events yet, but can lay a foundation for financial success throughout your life.

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About Terri A. Kamoto

Senior writer for FSN - Terri is a former financial analyst dedicated to making personal finances, budgeting, investment and insurance advice accessible, up to date and easy to understand. It is hard to find professional advice written in a language someone without a financial background can understand. Terri helps companies synthesize industry lingo and expertise into clear and informative content which builds smarter, financially successful individuals. You can find Terri on !

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