Think of all the exciting moments that lie ahead – creating memories, creating lifelong friendships, and introducing a new world of learning. In the midst of it all, it’s all too easy to overlook a few vital ingredients. Managing finances in this time period is critical. The more you have in place now will save you from a world of heartache in your later adult years. Keep reading to find out some effective and simple ways to make your money work for you while you are in college.
Spend your loan refund wisely
If you have to use any kind of private or federal funding, please understand one thing: the extra money that is distributed to you each semester is not “free” money. This is simply an overpayment that will be returned to you once all of your school expenses have been paid in full. If you have to use this money for any personal reasons, be sure to stick to the allotment to avoid spending more money than necessary. To avoid any temptation, feel free to send the remaining funds to a parent/guardian or return directly to the loan provider. Either of these two things can ensure that the money is no longer in your hands to avoid any unnecessary spending and interest later on.
I know it can seem cool to go out to eat with friends, spend money to do some online shopping, or take a random road trip. While these are all memories worth experiencing—four years from now, a few hundred dollars can quickly turn into thousands over time with interest. Begin the harsh (but necessary) process of not telling yourself every once in a while. I got it; It is not the most magical feeling to deprive yourself of anything. However, developing this habit in your younger years creates an average muscle in your adult years and beyond.
Look for opportunities to earn extra income
We never said college should be all work, not play. To make sure that you can enjoy all the fun your heart desires without spending a lot of money, consider different ways to earn some money between your studies. For many colleges and universities, there are work-study opportunities – programs that allow you to work on campus and earn money in the process. This is the most viable solution, as transportation is often not required because everything is centrally located on the campus.
If you want to find outside work, doing a quick search on online job sites can instantly show you who is hiring. Make sure your employer is well aware that you are a college student, so your schedule should easily match your school’s requirements. Remember, don’t tire yourself out to the point of exhaustion. While there will be an endless number of people staying up all night, it shouldn’t come at the expense of a job at this point in your life. Excellence in your studies is the most important task!
Let’s not forget – this is a digital age. If studying work or a traditional part-time job doesn’t sound very attractive, consider any products/services that you can offer virtually. Freelancing is always an option for writers, photographers, or anyone who is creative by nature. Think about some of the skills that come naturally to you or that you would like to build and improve over time. This way, you can boost your resume while making some money in the weekend. The ways to earn are limitless – take advantage of your growing network and make it work for you!
Set a loose budget and stick to it
Budgeting is not meant to stifle your enjoyment, it is simply put in place to provide some barrier to your spending. Hopefully the number of financial responsibilities you have at the moment is minimal. This is the perfect time to create a budget that doesn’t give up on basic goals like saving or investing. If you are not sure how to distribute your money, take advantage of the Mint app for a comprehensive overview. From there, you will be able to see the best way to allocate your budget. If you are responsible for bills like phone or car insurance, these should be at the top of your budget. Next, focus on getting used to having a savings account for emergencies—like auto repairs. The goal is to stay prepared no matter what happens.
Save as much as possible
Saving isn’t just something that seniors do – it’s a vital practice that should be implemented as soon as possible. Not only does it help prevent a panic situation when emergencies occur, but it also provides overall peace of mind. Since saving will look different to you this season, use your budget to help determine how much you can save while covering any essentials. Set a specific amount and commit to saving it based on what works for you; This can be weekly, fortnightly or monthly. Develop this good habit now so that you can master it in your later years. While you get a break from classes during the winter and summer, earn as much as you can to relieve the stress you gain when classes are heavy in the session.
Avoid credit card debt if possible
While it’s important to build your credit during this time, it’s not ideal to delve into credit card debt without a stable, reliable income. The best rule of thumb for credit cards is to collect small amounts that you can pay off in full at the time of purchase. This could be gas or a reasonable number of groceries. Using this practice makes you very intentional about how you use your credit; In addition to developing a positive credit history.
Make interest-only payments on your student loan
I know this means nothing to you (for now), however – seriously consider making interest-only payments while you’re in school. When you are a current student, there should be no interest accrued during this period of time. While repayment options vary based on the terms of your loan, help yourself in the future by paying any money to reduce your debt.
Marsha Barnes (22 posts)
Marsha Barnes is a financial professional with over 20 years of experience dedicated to empowering women around the world to become financially prosperous. Financial competence and literacy is a passion for Marsha, providing practical information to clients which increases their overall confidence in their personal finances.