Whether you’re trying to save for a spring break trip or are working on a long-term goal like retiring debt-free, learning how to manage your money is a crucial life skill. Select shares five financial tips for college students to help them get on the right track.
Pace your spending and try to avoid banking junk fees. Using the meal plan on campus can stretch your food budget, and student discounts will help you save on shopping and eating out. By this link you will find financial crisis consequences for dummies.
Budgeting
Creating and sticking to a budget is an important first step to financial wellness. When they have a clear picture of their income and expenses, it’s easier to keep track of bills and payments as they come in and go out. They should start by adding up all their sources of income, including paychecks (if they have them), grants, loans and family contributions. They should also add up all their monthly expenses, from essentials like rent or a mortgage payment to food, utilities and transportation costs.
Next, they should review their list of expenses and determine what they can cut. This could include switching to a cheaper meal plan at school or taking a car-pool with friends. They should also look at recurring monthly expenses like streaming services or other subscriptions to see if they can trim any unnecessary fees. A budget can also help them save money for future expenses, such as a vacation or a new laptop. To save your budget you can see right here free software details for students.
Financial Aid
When you’re looking at college costs, financial aid can help cover a lot of the tab. It’s typically made up of grants, scholarships and loans. Grants are free money and are typically based on a student’s financial need. Scholarships are also free money but typically are based on merit or academic achievement.
Loans are money a student borrows and must pay back with interest. Students should fill out the Free Application for Federal Student Aid (FAFSA) and work with their schools to identify state and school-specific grants and scholarships.
Some students find that living with roommates, buying books through online used book retailers or using their student ID for discounts and perks can help cut expenses. Other ways to save could include setting up a family 529 plan, a custodial account or a retirement savings account like a Roth IRA. Whether saving through these or other methods, having good financial habits in college can set students up for success after graduation.
Savings
The ability to save is a critical skill that most college students need to master. But the reality is that many of them have too little wiggle room in their budget to save what they need.
The first step in being a better saver is to track their spending, and it can be easier with the help of an app or spreadsheet. And it’s also a good idea to consider living close to campus, because that can save them money in both housing and transportation costs.
Another big savings tip is to avoid buying textbooks new. Instead, professors often assign them from the online library or encourage students to buy used books. And if students are able to sell the old books after the course is over, that can be a significant source of savings. Likewise, most colleges offer access to free on campus printing and going paperless can save them hundreds of dollars a year in printing expenses.
Loans
Many college students rely on loans to pay for school. Help your student explore all of their options and make smart loan decisions.
Urge them to exhaust free sources of money (like grants and scholarships) before taking out loans. They may find they don’t need to borrow at all if they can save enough before starting school.
Encourage them to take advantage of any college savings plans and to use a prepaid card as a budgeting tool. This will help them establish a credit history and will also help them learn how to manage debt responsibly later in life.
Suggest they set up autopay on any federal or private loans they have. This can help them avoid late fees and get a discount on their interest rate. This is a great habit to start while they are young and can easily be maintained through their career. An emergency fund is another good savings goal that can help them avoid going into debt for unexpected expenses.
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