8 Money Must-Knows for College Freshmen
With back-to-school shopping season in full swing, kids are gearing up to go away to college and start a new way of life with new friends, new hobbies, new classes, and teachers. But there is one more responsibility that 18-year-old college freshman need to prepare for: managing their money on their own.
Living independent from home, freshman need to make sure they don’t accumulate debt and pay their bills on time and consistently to start building their credit history. Whether you are a entering college as a freshman this fall or one of your kids or family members are, check out this simple yet vital list of tips to becoming a financially successful student:
1. Learn how to budget and then actually use it each month! — This is imperative to being money smart! You need to know how much books, school supplies, college credits, dorm/apartment fees are going to cost you per month. Once you have the big ticket items covered, you need to budget how much money you need for food, transportation, cell phone bill, clothes and fun stuff that ALL college students partake in. This way you will know how much of your scholarships, grants, loans or money from parents you should spend each month. You don’t want to blow all your money your first two weeks and then be broke and hungry for the rest of the month. I promise you it won’t be fun calling mommy or daddy begging for more money.
2. Get a part-time job – Most college students have some type of job to help cover extracurricular activities. See if you can get a job on campus at the book store or check out the nearest mall. Any additional income besides your primary money for school costs will help you from feeling the restraints of your budget.
3. Get a checking account– If you haven’t already done this, you need to open a checking account. This way you will have a secure place to store your financial aid or money you make from your part-time job. This will also help you keep track of what you are spending your money on and how to better budget.
4. Be wise about credit – Luckily with new credit regulations credit card companies are restricted from offering young and naïve college freshman thousands of dollars in credit without a parent co-signing. But if you do decide to get a credit card with the permission of your parents, which probably won’t exceed $1,000 credit limit, make sure to pay off the balance in full every month. If you don’t have the cash to pay the credit card off, don’t charge anything to it! Using a credit card for small purchases over time will allow you to build a credit history and improve your credit score. Although a credit score doesn’t mean much to college freshman, in a few years it will determine what car, house/apartment, and lines of credit they will receive.
5. Buy a meal plan – For those college freshman that opt to live on campus, and the majority of freshman do, get a meal plan. A meal plan can usually be purchased for $500 – $1,000 and will be worth dozens of meals at the local cafeterias and eateries on campus. This will save you money in the long run and will prevent you from spending $10 here and $15 there for lunch and dinners.
6. Get a mini fridge – Instead of eating out ALL of the time, buy a mini fridge for your dorm and stock up on easy to make snacks and meals. This way you won’t starve and you’ll save you a few bucks as well.
7. Define needs vs. wants – Your freshman year in college is, for most people, the first time to establish independence in many different areas. You can establish great financial independent by identifying what you need to make it through college compared to what you want. This may mean that you aren’t going shopping every time there is a new party to go to.
8. Save for a rainy day – If you get extra money from your parents or have left over funds from your financial aid, put some of it in a savings account for a rainy day. You may need additional money for a huge school project in the future, or if you are a business major, your professors will most likely require you to dress in suits for certain class periods. It is important to be prepared for future expenses – this will prevent you from feeling stress over money issues.