Think about all of the exciting moments ahead of you – creating memories, establishing lifelong friendships, and introducing a new realm of learning. In the whirlwind of it all, it’s very easy to lose sight of some vital components. 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, yet simple ways to make your money work for you while you’re in college.
Spend your loan refund wisely
If you have to utilize any type of private or federal funding, please understand one thing: the excess money that is dispersed to you each semester is not “free” money. This is simply an overpayment back to you once all of your school expenses are paid in full. If you have to use this money for any personal reasons, be sure to stick to an allotment to avoid spending more funds than needed. To avoid any temptation, feel free to either send the remaining funds to a parent/guardian or directly back to the loan provider. Either of these can ensure the money is no longer in your hands to avoid any unnecessary spending and interest later on.
I know it may look appealing to go out to eat with friends, spend money doing some online shopping or enjoy a random road trip. While these are all memories worth experiencing – four-plus years from now a few hundred dollars can quickly turn into thousands over time with interest. Begin the harsh (but necessary) process of telling yourself no every once and awhile. I get it; it’s not the most glamorous feeling to deny yourself of anything. However, developing this habit in your younger years creates a mean muscle in your adult years and beyond.
Seek out opportunities to earn additional income
We never said college had to be all work and no play. To make sure you can have all of the fun your heart desires without spending too much money, consider various ways to earn some money in between your studies. For many Colleges and Universities, there are opportunities for work study – programs that allow you to work on campus and earn money in the process. This is the most viable solution, as no transportation is often required since everything is centrally located on campus.
If you’d like to find external employment, doing a quick search on online job sites can show you instantaneously who is hiring. Be sure that the employer is well aware that you’re a college student, so your schedule should easily align with your school demands. Remember, don’t overwork yourself to the point of exhaustion. While there will be an endless number of all-nighters, it shouldn’t be at the expense of a job at this point in your life. Excelling in your studies is the most important task!
Let’s not forget – this is a digital era. If work study or a traditional part-time job doesn’t sound too appealing, think about any products/services you can offer virtually. Freelancing is always an option for writers, photographers or any creative person by nature. Think about some skills that come naturally to you or skills you’d like to build and improve upon with time. This way, you can beef up your resume while also earning some weekend money. The ways to earn are limitless – leverage your ever-growing network and make it work for you!
Create a loose budget and stick with it
A budget isn’t meant to stifle your fun, it’s simply put in place to provide some guardrails for your spending. The number of financial responsibilities you have at the moment are hopefully minimal. This is an ideal time to create a budget that doesn’t abandon the basic goals such as saving or investing. If you are unsure of how your money is being dispersed, leverage the Mint app for a holistic view. From there, you will be able to see the best way to tailor your budget. If you are responsible for bills such as a phone or car insurance, these should be at the top of your budget. Thereafter, focus on getting in the habit of having a savings account for emergencies – such as car repairs. The goal is to be remain prepared no matter what happens.
Save as much as possible
Saving isn’t limited to something older adults do – it’s a vital practice that should be implemented as early as possible. Not only does it help prevent in panic as emergencies occur, but it also provides overall peace of mind. Since saving will look different for you in this season, use your budget to help determine how much can be saved while covering any necessities. Determine a set amount and commit to saving that based on what works for you; this could be weekly, bi-weekly or monthly. Develop this good habit now so you can master it in your latter years. While you have a break from classes during winter and summer, earn as much as you can to alleviate the pressure to earn when classes are heavy in session.
Avoid credit card debt if possible
While it’s important to build your credit during this time, it’s not ideal to get deep into credit card debt without reliable, steady income. The best rule of thumb for credit cards is to charge 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 your credit is used; as well as developing a positive credit history.
Make interest only payments on your student loan
I know this means nothing to you (now), however – strongly consider making interest only payments while in school. While you’re a current student, there should not be any interest accruing during this time period. While repayment options vary based on the terms of your loan, help your future self by throwing whatever monies you can to lessen your debt.
Marsha Barnes (22 Posts)
Marsha Barnes is a finance guru with over 20 years of experience dedicates her efforts to empower women worldwide to become financially thriving. Financial competency and literacy are a passion of Marsha’s, providing practical information for clients increasing their overall confidence in their personal finances.