Money Management Tips for College Students
6 Hot Money Management Tips for College Students
Starting college is one of those times when you had better learn about money management. In that regard, we are offering these basic money management tips to help guide you.
You’ll not only be meeting new friends, but experiencing that new freedom you dreamed about. In most cases, you’ll also discover that you now have a lot more financial responsibility…a lot more!
A study done by Sallie Mae discovered that more that 84% of new college students had one or more credit cards. The bad news is that many students were using these cards the wrong way. With an average balance in excess of $3,000.00, many were spending more than their income allowed.
We don’t advocate that every college student have a credit card for the simple fact that many of them have a hard time resisting the temptation to spend. The ones that have credit cards and are able to use them wisely, will be on good financial footing in later years.
[bctt tweet=”College students need to budget now. Good software can help.” username=”HBSMoneyTips”]
The following money management tips are short and simple, but following them will help to get you started in the right direction.
Creating a budget is crucial
- This first tip is for everyone, not just students. If you don’t know where your money is going, you will soon be in debt. List all of your income, including grants, scholarships, part time jobs and savings.
- Next, make a list of your expenses on a monthly basis. These should include school tuition, insurance, books and other supplies, fees, and don’t forget room and board.
- At this point, a free money management software such as Mint.com, can be a big help. It may also help you to learn more about how to create a budget.
Start to build your credit slowly
- If you can handle a credit card wisely, get one to begin establishing a good credit history. Handling that credit card properly will help you later in life after you graduate from college.
- At the same time, if you yield to the temptation of unwise spending and end up carrying a balance that causes you to make your payments late, this will cause you future problems. Use money management tips very wisely here.
Get a part time job if your studies permit
- This will have a positive effect on your cash flow. The more income that you have coming in means that you’ll have less that you need to borrow. Always remember that those dreaded student loans have a short fuse as soon as you graduate. Repayment ultimately begins.
Start a savings plan
- Even though it may be small at first, start to save. There are ways to get things cheaper by discounts, clubs, etc. Watch the college meal plans carefully. Some of those can end up costing you a lot more than you realize.
- If you’re able to get a part time job, you may be able to put a few dollars in savings from there. If money is tight, try to live as frugally as you can. It will pay off later on.
Guard your financial information
- This is the best time to learn how to protect your financial information. Never, never, let anyone have your social security number, except those who are required to have it. The same applies to your bank account and credit card numbers.
- If you get bank statements, store them securely after you reconcile them. Same for credit card statements…review them for unauthorized charges. If you bank online, keep your login information secure.
- Plus, never access any of your financial websites from a Wi-Fi location. Hackers often lurk nearby and with sophisticated equipment, can get your login information easily. Identity theft is rampant today. Even the IRS has been hacked.
- If you’re able to get a part time job, you will probably have to file a tax return. Even though, your gross income may be below the filing requirement, federal and/or state taxes withheld will need to be dealt with.
- Before you file your own return, check with your parents to see if they will be claiming you as a dependent. If so, you won’t be able to when you file. You can file your return here at our site and if you will be using the Form 1040EZ, you can probably file the federal return free.
- If you have to file a state return, you can probably file that free also at the website of that state.
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a major law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.