College is an expensive journey to undertake for anyone who attends. Following basic rules of frugality can help students keep their finances in order.
The basic concept required for managing money is discipline. It can be a difficult thing to teach yourself, but learning to make smart decisions about your money now can make you a much happier and financially stable person in the long run.
Learning when and how to spend money or when you should hold back is a skill often learned through trial and error. To save the cost of overdraft fees and overdue bills, learn how to create a budget and stick to it. Creating a tangible outline showing your budget helps students visualize what money they can spend.
Knowing how much money is available and what needs to be paid is a good feeling. Spending money fast is enjoyable in the short term, but leads to stress and anxiety in the future.
Budgeting doesn’t take much time or effort. It simply requires sitting down and taking the time to think of a realistic plan for spending money.
When you are low on money, the worst thing you can do is ignore it. If you think your bank account is dangerously low, check it. Ignoring it will only make you worry and can lead to expensive overdraft fees or your card being declined at an inopportune time. Keep an eye on your money and this is far less likely to happen.
Students who own credit cards should also be careful. While a debit card only allows spending what is in the checking account linked to it, credit card debt can add up fast and leave you paying it off slowly while interest racks up. Unless the payments are made by a parent, the money can stack up and become unmanageable fast.
Expensive credit card payments can be overwhelming and missing just one can mess up the credit score of a student just beginning to build credit.
It is generally advisable for students to avoid credit cards until they have a reliable source of income, but if proper discipline is used, a student credit card with a low credit limit can be a good tool for students to begin building a credit score. This can help you build the credit rating necessary to get loans for a car or house when the time comes.
Students who have student loans should be careful as well. Taking out the maximum amount is necessary sometimes, but all the money taken out has to be paid back with a big chunk of interest. What seems like a good idea right now will become frustrating and stressful when payments start.
Going out and having fun can still be a part of student life while being financially responsible. However, self control is a necessary part of the fun for students who want to be independent and mature.
Financial responsibility is a difficult thing to learn. Being good with money doesn’t come naturally for everyone, but it is something anyone can learn. In an economy still in recovery and a job market that is less than healthy, learning to handle money in college is an important skill for all adults to know.