Like most habits, if you want to build a sound financial lifestyle, it’s ideal to begin in college. This time in higher education is one of the best to experiment, learn, and grow. While in college, you could be getting some support with your finances; therefore, it provides a reasonable period for transitioning into the real world. While most college students have tight budgets and easily fall into a debt cycle, you can still enjoy champagne on a beer budget. If you’re wondering how to complete your education while building a solid monetary foundation, and still have fun, here are five financial tips for college students.
1. Begin building your credit
Your credit score is one of the most important things you’ll need after graduation. These three-digit numbers indicate whether creditors can trust you.
Previously, only banks and credit unions required your creditworthiness, but these days, your employer and landlord also care about it. This is now part of the background checks conducted before extending any form of credit or support to you.
In loan situations, you either pay more in interest or get denied altogether. Begin building credit while in school; get your credit card as soon as you can. The earlier you begin, the better for you.
2. Stay away from credit card debt
Attending an expensive school may sometimes mean amassing student loan debt. However, student loans come with favorable interest rates, and other government programs help you settle them, unlike credit card debt.
Fortunately, if you decide to take out a loan for your education, you’ll see that there are different ways to pay off student loans fast resulting in bigger savings, more flexibility in your budget, and financial peace of mind.
Your credit card debt is different; it can financially hold you back for years since their interest rates are astronomically high. It’s not uncommon for interest in plastic cards to be between middle and high double digits.
If you can, create a budget, keep spending within your means, and avoid overspending on credit cards. Settling your credit card balance on time each month means you’re building credit without having to pay huge sums of interest. You’re not required to carry a balance when building credit.
3. Budgeting: Financial tips for college students
Budgeting is a crucial life skill everyone must learn, and it’s easier when you restrict how much you spend. It involves creating a good plan for your savings and expenditure.
With a budgeting plan, you gauge how much you spend every month in several different areas. As the month advances, you then measure spending against the budgetary plan.
Any cash balance should go into your savings. Fortunately, there are several ways to create and monitor your budget. There are many free tools and resources to also help you with managing finances as a student.
The objective is to start building and following your spending plan. With a simple financial life, it’s easier to set up a budget. Once you get used to it, you can practice it after graduation as you enter the career world.
4. Learn to invest
Savings is an excellent start for stabilizing your finances, but investing is key to growing it. It’s imperative to learn how to invest in building your wealth, possibly with fewer funds.
Although your student life comes first, there are other things to understand, including investing. You can begin with the market basics and how fees affect your investments.
Here is the final one on the valuable list of financial tips for college students:
5. Guard your identity
With college life, chances are you’re more focused on academics and social life than monitoring your personal information. Should someone get access to your credit card info, social security number, or other identification information, they could damage your credit.
It then will take several months or possibly years to notice and clear up. According to UK statistics, there were more than 189,000 identity thefts online in 2018, which was 6% higher than the year before.
It’s essential to take necessary precautions to keep your sensitive information from the public and unsuspecting criminals. Below are some ways to prevent this:
- Avoid easily giving out your information
- Regularly check your account to notice any unauthorized transactions
- Sign up for credit card monitoring
Takeaway on financial tips for college students
College may shield you against some monetary challenges you face as an adult. Taking the time to build good financial management skills can be handy to deal with life after grad. Beginning now will offer you a head start in your financial goals, both in the short and long term.