College Is Hard Enough Without Money Issues
If you are a new college student, you have a number of challenges headed your way. Life is about to get very real as you take on the responsibility of a secondary education. Money might not be on your mind, but you will soon see that it is an issue. The starving college student stereotype is very real and it could be you if you do not learn how to deal with money issues now. Tina can help and I am here to give you a few tips that will make college life a lot less stressful. Let’s get started.
Tip 1: Minimize Student Loans
I know, you have a lot on your plate right now with tuition, books and the cost of living. In addition, you have all of this money being thrown at you in the form of student loans. The temptation is to take as much money as they will give you and make college as easy as possible. Great plan but it will backfire in the end.
College graduates are leaving school with debts easily in the six figures these days and that is a huge problem. It is a debt that can be crippling. It forces you to take the first job that you can get in order to start paying your debt and limits you in many other ways. Compound interest will be your enemy with student loans.
Try to take out the bare minimum and as hard as it is, work your way through college as much as possible. Sure, you will not get to party as much but in ten years, when your friends are crippled with debt, you will be living the good life debt free in your own home, not a rental.
Tip 2: Learn To Budget
Budgeting is a skill that few possess. The tendency is to take your money and spend it as you like, paying your bills along the way. You can easily blow through hundreds of dollars without even thinking This can be disastrous, because you need a plan.
Instead of being a free spirit financially, make yourself a nice budget. Take your income and divide it out with a set amount for bills, entertainment, food, etc. Having limits will help you stay within your means an will keep you out of trouble. It may seem boring but being able to budget is a skill that will serve you well for years to come,
Tip 3: Avoid Credit Card Debt
You will soon find out that you are target “numero uno” for the credit card companies. This new credit is great but it can quickly get out of hand. Take one credit card offer and keep it as an emergency backup. Make sure that it is a good offer with no annual fee and do not spend on it unless absolutely necessary.
Always keep in mind what the credit card companies are up to. They want to hook you with easy credit and then get you trapped in debt. They only make money if you charge and fail to pay off your purchases. That 20 percent APR will quickly add up, so only use your credit when needed. Otherwise, you should just snag one, maybe two good credit card offers just to help build your credit profile and your credit rating.
Tip 4: Have An Emergency Fund
Things are going to happen that are outside of your control. When they do, you need to have an emergency account ready to deal with it. If you do not, when you need money, you leave yourself at the mercy of predatory lenders.
You should have an emergency fund with at least enough money to handle a month of your college student obligations. As an adult, you will later want a substantially larger emergency savings, but for now, if you have a month of bills in the bank, you are ahead of the game.
You can use your emergency fund to pay for bills if you unexpectedly become ill, if your car breaks down, etc. Things happen, and you need to be prepared.
Tip 5: Work As Much As You Can
The temptation is to live for today in college but you need to change that train of though. College is really about working for tomorrow. Get your education so that you can get a better job in the future and work as much as you can so that you can avoid debt.
As a college student, taking a basic 15 to 18 hour schedule, there is no reason that you could not work 20 hours a week or even more. In addition, part time jobs are paying an easy 15 dollars an hour these days or even better. That is 300 dollars a week that you could be making. 1200 dollars a month that can go towards paying your college bills so that you do not end up over your head in debt when you graduate.
Don’t be lazy now. Put the work in so that you have it much easier in the future.
Tina’s Final Thought
College is a great time and you should have as much fun as possible. You should, however, think about what the overall goal is. College is meant to get you started in the right direction. It is meant to give you the tools to succeed in your career and your life. Getting your finance in order now will only strengthen your ability to succeed. Learn to manage your money early and control debt and you will be that much more ahead of the pack.