If you look at the OECD’s data on how much students spend on tertiary education around the world, you’ll find that the United Kingdom and the United States are the most expensive countries for college students. On that note, it may not be surprising why America’s student debt bubble has reached $1.73 trillion. When it comes to personal finance, college students can follow some of the below recommendations to ease the burden associated with the rising costs of higher education.
Personal Finance for College Students: 5 Useful Tips
College students have a lot on their minds. From academic achievement to personal finances for college students, the students who can handle all the variables of college life the best tend to be the most prepared.
Although you don’t always know what will happen in the future, there are some known costs associated with education that you can plan for in advance.
Additionally, by following some or all of these outlined best practices, you can likely alleviate stress and better manage your personal finances.
Create a Budget
Creating a budget while you’re in college will significantly help you organize your spending, saving, and sharing. It also allows you to clearly see where your sources of money come from, including: family, savings, loans, scholarships, wages, and the like.
After you list your source of income, be sure to categorize all your expected and current expenses.
Expenses for college students will typically include:
- Tuition and fees
- Living expenses
- Transportation
- Utilities
- Books and supplies
- Entertainment
- Food plans and meals
Once you’ve listed out your expected costs and income, you can see what you may have left over. It’s always a great idea to set aside some funds into a savings account and/or emergency fund, so that if something happens and you need access to cash fast, you’ll have somewhere to get it.
Remember that budgets aren’t set in stone. Also, your monthly expenses and income may vary. As such, budgets serve as a financial blueprint so you can better assess your spending habits and make better decisions should you wish to spend on impulse.
Secure a Source of Income
College requires a lot of time, effort, and devotion. But, if you are able to make it work (no pun intended), it’s always a great idea to get a job while you’re in college. Many colleges offer work-study programs in which students have the opportunity to work in a school-related position, and in exchange, your salary could be tax-exempt. Or, you can try to find jobs nearby your school to minimize transportation costs.
One of the best ways to make it easier to work while attending college is to enroll in an online university like the University of the People. By doing so, you will benefit from being able to choose your own schedule, work hours that you may not otherwise be able to if you were stuck to a classroom schedule, and totally avoid any required transportation costs that come along with having to go to a campus.
Build Good Credit Wisely
If you have yet to have a credit card under your own name, it’s a wise time to begin building your credit. However, having a credit card can also become risky if you don’t manage your spending properly. A credit card is essentially a loan in the form of a line of credit. At the end of the billing cycle, you are expected to pay back everything you spent, and if you can’t cover those costs, you will accrue interest, or a percentage that is essentially the cost of borrowing the money.
If you get to a point where your credit card balance continues to accrue interest and remain unpaid, you can be stuck dealing with collection agencies, which will damage your credit score.
However, if you take out a credit card in your name and use it only according to what you can actually afford, then you will be on your way to building your credit score. This is useful for the future as your credit score is referred to when you borrow money, as you would if you take out a mortgage (loan for a home) or lease/finance a vehicle, for example.
Stay Debt-Free
Before you take out any student loans (and end up potentially contributing to the student debt crisis), be sure to take advantage of any sources of “free money” first. Free money refers to scholarships and grants. There are different types of scholarships available — some may be based on financial need, whereas others are merit-based. Check in with whatever schools you wish to attend, as they generally will provide their own list of partnered scholarships available for their students.
For example, you can find the University of the People’s scholarship options here. Plus, our university is tuition-free, so you’ll already be saving a ton of money compared to for-profit institutions when you earn a degree from our accredited, non-profit institution.
Buy Used
Another great way to take control of finance for students is to buy items, school supplies, and electronics used rather than new. You can leverage platforms like Facebook Marketplace, Craigslist, and social networks to source items you may need.
Additionally, there are opportunities to utilize OERs or online education resources rather than always buying textbooks, which add a lot to your expenses over your schooling career.
If you are moving into new housing to attend school, check in to see if any students or the departing student are selling electronics and supplies that you can buy off of them for a reduced price.
Saving, Spending, and Schooling: The Power is in Your Hands
When it comes to personal finance, college students are at an age to take the responsibility into their own hands. We’ve shared just five personal finance tips for college students, but by exercising some or all of them, you can dramatically improve your financial position.
These recommendations will also set up excellent money management habits as you grow older and incur even more expenses. Happy saving, spending, and (possibly) sharing!
