If you are a college student, you are probably concentrating on your studies and trying to get an education that will benefit you. You may not be thinking about handling your money, and failing to do so can leave you in a big financial mess by the time you are out of college. You must take control of your finances now if you want your future to be bright. The following tips can help you with your finances to avoid college financial disasters.
Tip #1 – Only Use Credit Cards in Emergencies – Once you get a credit card, it can be easy to start racking credit card debt. This is a bad way to start out, and you will probably end up with bad credit if you always use credit cards. Remember, the money you spend on credit cards must be repaid. It is best to save your credit card for emergencies instead of buying that new pair of shoes or paying for an evening out. For a list of credit cards targeted to college students, click HERE.
Tip #2 – Pay Off the Balance Every Month – If you have a credit card, you must pay off your balance each month. Leaving a balance on the card can result in you paying extra money on interest, so you will save money if you pay off the balance every month. This will also keep you from getting into credit card debt over your head.
Tip #3 – Pay Bills on Time – Now is the time to start building your credit history, and you can do this by always paying your bills on time. It can get quite expensive if you fail to pay your bills on time. Many companies will charge late fees if you do not pay on time, and your interest rates may also increase, costing you even more money for being late.
Tip #4 – Start Saving Now – Many college students do not realize how important saving is, but if you can start saving while in college, you can reap great benefits when you are older. Saving now will get you in the habit of saving. You will earn money from the money you save and have extra money set aside in case of any emergencies.
Tip #5 – Look for the Best Checking Account – You can save a great deal of money if you look around and find the best checking account. Look for an account with no fee for starting an account and no minimum balance. You may also want to check into any debit card fees and fees for deposits or withdrawals. Some banks will offer free checking for college students, so take advantage of this, and you can save a great deal of money every year.
While these five tips may seem simple, they are vital to establishing your financial affairs later in life. Avoiding carrying credit card debt is a way to ensure your success with your finance later in life. And saving money when you are young will set you up for a better retirement as your money will compound a decade more than if you waited until you graduated and earned a decent salary. If I were to add a #6, I would say that it is important to have a budget, even in college, to establish the habit of knowing what money is coming in and where it is going.
If you need any assistance with your college-age child or grandchild, don’t hesitate to contact me directly if you are in or near the Metro Nashville area. For this outside middle Tennessee or would prefer a financial advisor closer to you, seek out a qualified fee-only Registered Financial Consultant (RFC) near you.
