If you could go back and tell your “past” self one thing, what would you tell him? Would you tell yourself to go a little easier with credit cards? Do you wish that you had started investing at a young age? Have your parents tried to give you advice and money tips for first-year college students? Here are some of the best money tips for college freshmen to know as they head off to college. What you learn can help you for a lifetime.
With college students about the flood of our nation’s colleges and universities in the coming weeks, there are several money tips for college freshmen, and the rest of the student body should heed.
Three Money Tips For College Freshmen And Students
Go Easy on the Credit Card Debt
Recent consumer protection laws have made it more difficult for college students under 21 to get credit cards. Many will find that they will need a cosigner to help them qualify for a new credit card. College, of course, is a time of great independence, growth, and learning.
Many college students mistake racking up credit card debt because they assume they will not have trouble paying the bill when they graduate. This is a hazardous plan, especially with the job market continuing to be volatile. But, you are never too late to understand money tips for college freshmen.
While a little use of credit cards and building your credit bureau file may be a good game plan, racking up extensive credit card debt while in college is a bad idea. You can consider consolidating your credit cards together, cleaning up some small debts with a payday loan lender, or consider a consolidation loan through a service like Lending Club
.
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Keep Your Budget in Check
Everyone should have a monthly written budget, even college students. College students may need a budget more than anyone else, in fact. Most college students have very little income that they receive. So, college students must watch their spending wisely in order not to be overdrawn. Spending more than you earn or bring in is a dangerous cycle that can be difficult to break.
There is a danger that spending more than you earn, dipping into an overdraft protection account, or racking up overages on credit cards can lead to a spiral of debt that will be difficult to dig out of without sufficient income coming in. A budget will help keep your spending on track.
Keep from Making a Catastrophic Mistake
My mother has a theory about car accidents, and this is just one example and can be extrapolated to other areas of a college student’s life. But, young drivers will inevitably get into some accident. Your goal and the goal of your parents’ should be to help you mitigate that risk so that the accidents you have are small fender benders instead of one that results in a serious injury. Learn your lessons on small errors in judgment. Ding cars stopped at a red light instead of smashing cars together while driving 100mph on the freeway.
The same can be said for your finances. Make small mistakes with your personal finances. If you bounce a check, learn from that mistake and never repeat it. Don’t repeat it on a grander scale. Don’t buy small things that you cannot afford. Not only will it add up to a lot of money eventually, but it will also instill bad habits in the future where you will be much larger items like a house or a car when you cannot afford it. Make small mistakes and learn from them instead of devastatingly big mistakes that are much tougher to come back from.
As a college student, the choices that you make will set you up for success early in your adult life and your career. You do not want to be saddle with an enormous credit card debt that you continue to struggle to pay right after graduation. You should be focused on other things when you are applying for colleges like scholarships: need-based aid, merit scholarship, sports scholarships, and many others. There is more to focus on than debt when you finally get to college as well. Smart decisions now will help you in the future.
Ahhh, the back to college posts… make me yearn for 2000 every time! My parents emphatically told me as they kissed me goodbye at the front door of my freshman year dorm that I wasn’t, under *any* circumstances, allowed to get a credit card. I listened, and emerged from college four years later with a degree and stellar credit.
Another piece of advice that I wish I followed: keep applying for scholarships! I stopped looking after I started college, but students tend to need even more financial assistance after their freshman year (when their financial aid packages are typically the highest).
I would have to agree with Stephanie. I think that most people forget that scholarships aren’t only for when you first get into college. Keep applying for them because otherwise they just go unused!