Oh, college. It’s the time where many new adults gain a semblance of independence from their parents. College is synonymous to everything young, with education pretty far down on the list.
In many instances, it is the time to make mistakes and form your adult habits that, whether good or bad, tend to carry on into the latter years. One aspect about college that is often overlooked is the complete lack of financial responsibility among college students.
High schools across the world put an emphasis on classes such as trigonometry and advanced placement literature. Very little of their time and resources are spent giving practical knowledge like how to save and how to balance a checkbook.
Financial education is nonexistent. We tend to just accept the fact that these kids are going to completely screw up their accounts and credit scores until they can find a way to make it better sometime in their thirties.
That lack of foresight is instrumental to so many predatory lending schemes and bad decisions while in college. Students are expected to think smart. They’re expected to push their minds to limits never seen before. It’s about time that same thing applies to money. Here are a few tips as to how it can.
Avoid Orientation Credit Cards
Do not accept credit cards on orientation. That’s the number one rule. A lot of students already know this, but the convenience aspect is often too good to pass up. Why go out and shop around, figuring out what options are best for you, when there’s the answer right in front of you?
Here’s a common scenario. You’re outside of mom and dad’s house and off to the ornate halls of a safe, expensive environment. It’s orientation day. Everyone is young and the sun is out. You can’t believe you’re free. You go past the student store and find out that a t-shirt costs half your after-school job paycheck. Guess who has stalls set up along the walkways to the dorms? Money lenders.
Avoid those predatory lenders at all cost. Their only job is to get students to agree to high-interest credit options with low limits. To them, two thousand dollars is chump change. To the average college student, that, plus thirty percent on top of it means countless hours working.
Save, Save, Save
Save as much as you can. It may be fun to go out like an adult and spend all the money you can, but the reality is you’re not in the financial position to do so. Even those self-proclaimed “college entrepreneurs” with their online event promotions pseudo-businesses are going to lose every cent if they don’t save it. If you have a job, save a certain percentage of every dollar that you earn in a separate account. Then lose all the information regarding said account. Forget the pin number, the account number. Make it so that the only way to access that money is to go to a physical branch or call their customer service hotline. This ensures that you save without having to look at the amount and relate it to some frivolous purchase.
Avail of Student Discounts and Perks
As a student, you have a whole world of services and discounts online. Most personal tech companies have big discounts if you have a valid student email attached to your name. You can get software and access to research journals for free. There is every advantage being given to college students in terms of saving money. And if you have any questions, you can consult online experts regarding virtually anything. If you want to learn more about how money moves, Money Task Force has an amazingly tailored blend of information and insight. If you want to get into stocks and bonds, every search engine sidebar has an app for that. The point is, there’s no reason to think that you can’t get great access to deals and information as a student. Even books, the green-eyed monster of the education world, can be found at half off. And with today’s world, eBooks are often sold for a fraction of the physical cost.
Make a Budget
Have a budget. Everyone needs one. Everybody who is successful in terms of finance has a budget.
A good college budget makes one totally aware of how much they’re spending, and on what. The visualization of that alone is enough to make one change their mind on future spending habits.
This is where the empirical learning process comes in. Sign up for one of the many free finance apps and link it to your account. Set up categories and, if you can, do not add a miscellaneous section.
The more things can be categorized, the better the idea one is keeping strange spending at bay. This is the next step, after saving your money, to building great personal finance habits.
Consult Experts Before Getting a Credit Line
If you absolutely need a credit card, talk to someone who knows what they’re doing. Don’t look at the plastic as a means to buy the latest anything. When it comes to young adults, credit cards often go the way of “emergency only” cell phones.
It will always end up with a big bill. So ignore the college-centric offers like music festivals and food delivery points. Find one with a solid company behind it, with a decent interest rate that a student can build their credit score off of. That is, once again, a good way to instill good financial habits.
All in all, the world of personal finance is one that even many adults do not understand. It is important that we go into this with a good head on our shoulders and enough foresight to say no to a great many things.
The experience one may gain in college may be fun and exciting, but know that it is rarely worth the price that it comes with. So with that, be smart, save your money, learn personal finance for college students, and set up boundaries to ensure that college is a pleasant exploratory journey and not a complete financial liability just a few short years down the line.