Manage Your Money With These 5 Tips
5 Tips on How to Manage Your Money As You Enter College
The day you dreamed about has finally arrived. You’ve left the comfortable nest and are about to enter college. Hold on though, because unless mom and dad have very deep pockets, you’re going to have to learn how to manage your money. In addition to that, you’ll learn about credit scores, and hopefully how to create a financial plan that will see you through those tough college years.
Starting college, you’ll have more control in the decision making for your life; however, there is one very basic concept that you need to master. Even if your parents are financing your education, you need to learn how to manage your money effectively.
Many of the habits, good and bad, that you learn in college about money and finance, will be with you for many years to come. Statistics reveal that the average four year college student graduates with credit card debt of $4,000.00 plus student loans totaling $30,000.00. Financial experts say that every college student should formulate an easy plan in order to take control of their saving and spending. The following tips can help you learn how to manage your money as you make this plan.
1. Create a budget
It really doesn’t matter how small your budget is, you need to establish one and follow it. Your income for your budget will probably come from your parents, your part time work if possible, and financial aid.
Even starting out with a very small budget, set up a savings plan for future spending. Establish a time to review your budget on a weekly basis, so that it doesn’t get out of control.
2. Set priorities
This is the best time to decide what is most important to you and also what you are able to do without. There are many, many temptations in college that can blow your budget very quickly, so you must exercise restraint. Don’t make the budget overly restrictive, however, because then you will not be able to stick with it.[bctt tweet=”Here’s five good tips for those entering or preparing to enter college…” username=”HBSMoneyTips”]
3. Open a credit card in your name
Some financial gurus hesitate to recommend this because of the temptation to over spend. But, you need to establish your own credit rating, so use it for small purchases. A good credit score is also very important for you to have when you graduate from college. Scores go from 300 to 850, and the higher your score, the better interest rates and terms that you will receive. There is no need to open more than one credit card, so don’t be tempted by the many offers that you will receive. Also, be sure to pay your credit cards in full each month and on time as you learn how to manage your money wisely.
4. Watch your ATM usage
You’ll find an ATM machine practically on every street corner and in grocery and department stores, so don’t let that tempt you to get more cash. Those machines can really take a toll on your budget, especially when you’re spending the cash and you lose track of where the money went. You’ll know just how much cash you need by the terms of your budget, so don’t overdo it. Learn to manage your money carefully.
5. Purchase used textbooks
We all are very aware of the high cost of new textbooks. You will be able to buy used textbooks from students who have taken your classes. There are a number of outlets on the internet that sell used textbooks, just make sure that it’s the same one required in your class. Some times you’ll find a store near the college where you’ll be able to find the books that you need as well.
These tips are just a few of many that will show you how to manage your money and live within a budget. Graduating with good grades is very important and so is getting a high credit score.
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You offer some very sound advice here. Our youngest son will be entering college this Fall and we have been tutoring him closely in the financial area. He’s been using a credit card for about a year as well as his own checking account. He’s got a good head on his shoulders and uses common sense. He learned fast to reconcile his account every month after the bank made an error in their favor. I guess only time will tell how well we taught him. We appreciate your site and all of the free and informative articles.
It sounds so basic, but budgeting is key. I have to sit down and map out all of my expenses… even down to the snack money I used at the gas station. It may seem excessive, but it allows you to MANAGE your budget. You have to tackle debt. I’m glad I could for my family. -AL
Your 5 tips is awesome, I like the idea of budget and setting of priorities which is the starting point for money management.
I’d even go as far to saying DO NOT buy the textbooks. At least hold off until the first class. Some professors may revise things in the curriculum. And more often than not, mine would advise me to not get things going until later.
Or maybe this is an excuse to get a study buddy? 🙂
This is a very inspiring article. I really am truly impressed when reading your article. You offer useful information. Keep it up. looking forward to reading your next article.
I always bought used text-books when I could but always at the student book store. I had friends who saved a lot more money by renting their textbooks online for the term. The difference was between $50-$150 per book.
I never did get a credit card because I just didn’t need one, even to build credit. I ended up having medical bills that I paid and got me some credit, and I got married before I was done with school and my husband had credit, so a credit card just wasn’t necessary. When I needed or wanted something in college I either worked extra hours for the money, or saved up for it.
Thanks for another great post!
Hello there Gust. Just thought I’d drop you a comment on this post (seemed as good as any) to say that I’ve read a few of your posts and I’m liking the blog! Expect to see me around in the comments! 😉
Welcome Shaun and thanks for your comment.
Awesome and helpful tips! After reading this article, I remember the time when I am studying in college that it was really hard for me to budget my money!
I wish I have read this before!
I love the idea of opening a credit card in your name. Those days my mother discouraged me from doing so but later i saw how useful it can be and i went for it. Behold it makes things easy for me.
Thanks for the list especially the idea of purchasing used textbooks, that will save alot for me.
Used textbooks – wham bam thank you ma’am! Those were seriously a life saver, especially since I’m in med school, so I’ll be here for a while lol!
Establishing good credit is something I have really emphasized to my son, who is a college senior this year. We are aiming for that 850! 😉
Awesome post and very helpful topic.
i will share it with my friends
so that they can use this post.
Yes, I would highly suggest some students just apply for a credit card, get it, then shred it.
Just having that credit on file is good!
Prioritizing is something I have always struggled with. Now that I’ll be entering college soon, I’ll have to move it to my front burner.
These tips are fantastic! I am long past my college years, but they really apply for everyone. I still have a whole album full of credit cards in my name. I use them for small purchases, which I quickly pay off. That’s the secret to a great credit score!
I would also recommend getting a credit card fairly early. Learning how they work, what your personal limits are, and building credit early is really vital to being financially stable later. I always encourage people to get one (and only one) credit card and work on using that to build credit. Having only one, should reduce the chances of letting it get out of control. Great advice!
Thanks for your comment Richard. Yes, we agree, many teenagers in their last two years of high school are mature enough to begin to learn proper credit card usage.
Great Tips!I found the most helpful thing for me in college that really made me manage my money was getting a job. Working even if it is for only a few hours makes you realize how much something is worth.
It’s starting to get to the point where classes are requiring an access code so you almost have to buy your books new. It’s expensive and irritating. I do agree with your tips though if you can follow these you’ll be much better off.
Great tips, Gust. I’ll only add that the new college entrant focus on his/her NEEDS as against WANTS. This singular action will sure take any otherwise unserious person (financially) to unimaginable heights.
Thanks for stopping by. Good point.
I think opening a credit card in your name is actually a great money tip, especially for college students. Building a good credit score takes time, and college students have a lot of opportunities to build credit with books, rent, food, etc.
Great tips. I always purchased used text books which is a great secret. No need to pay 4 times as much for brand new books. Also a good idea for credit cards is to either start out with a prepaid card to control spending and stay away from debt. And a secured credit card is another good idea as it can help establish credit. Either of these options do not require an existing credit history to apply and get approved for.
All great tips. Budgeting is so important especially when you’re in college. It’s better to start as early as possible so that you can get a feel for how much you can spend and how much you need to save for the future. Opening up a credit card is necessary for college kids as long as they’re smart about using it. Developing a great credit score will be so helpful when applying for jobs, buying a car, etc.
I’ve seen so many students entering college that don’t have a clue on how to budget or for that matter, handle a credit card properly. I’ve been preaching for years that schools should have a required curriculum that includes budgeting and personal finance. Probably should start in grade school. Thanks for your comment and insight.