In 2017, the average student graduated already $40,000 in debt. That’s a large deficit to start your career with. Because of this, smart money management for college students is crucial. If you want to feel financially free, start working on it now.
Here are 4 tips to help manage your money in college to avoid financial minefields.
1. Leverage Your Student Status
Businesses and services alike often offer hefty discounts for college students. From free checking and savings accounts to discounts at movie theaters, your college ID can save you a bundle.
Don’t forget to research scholarships and grants to apply for. Unlike loans, scholarships and grants do not have to be paid back, so always try for those first.
Student loans should be your last resort, but they are still preferable to using credit cards with much higher interest rates.
2. Change Your Attitude Toward Debt
Taking out a loan to pay for your education can be a smart investment that will pay itself back several times over, but it is not “free” money. It is an immense financial obligation that has the potential to become a huge burden down the road.
No matter how much money you are eligible to borrow, you need to always be careful to only borrow the absolute minimum amount necessary to get you through school.
If you already have student debt, make paying it off a priority in your budgeting.
3. Fight the Fear of Missing Out
In college, you will regularly come into contact with people who have the means to spend far more money than you do. This can make their lives seem very exciting and you may want to feel the same way by trying to keep up with their lifestyle.
While it’s not as glamorous, a better course of action is to find friends just as strapped as you are. The challenge then becomes to find fun things to do for free rather than going to expensive events or engaging in an extravagant lifestyle that can land you deeper and deeper in debt.
4. Take Control
Wealthy people become wealthy in the first place because they developed good money management skills when they had little to no money.
They often say the key to their financial success is living below their means, which they continue to do even when they no longer have to.
Here are other tips to help you take control of your finances:
- Keep a log of every dime you earn and every dime you spend: It can surprise you how much small purchases can add up to over the course of a month. By tracking your finances religious, you can cut a significant amount of wasteful spending.
- Use cash instead of plastic: Research shows that when you swipe a card to pay for purchases it doesn’t seem as “real” as when you are spending cash. You may not think twice about putting an $80 meal on a card, but when you have to lay down cash, that purchase can be far more painful.
- Set a budget and stick to it: When the money for certain expenses is gone for the month, it is gone. Discipline yourself to not turn to a credit card when the cash for the month runs out.
The less money you have, the harder it is to live below your means – but that is also when it is most important. Debt is a trap that can sometimes take young people decades to dig themselves out of if they ever do.
While more young people are declaring bankruptcy, that doesn’t discharge student debt. The best way to avoid the debt trap is to borrow the least amount of money possible and make paying it back your priority.
Do you have any other tips for managing money in college? Let us know in the comments below!
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Lisa Michaels is a writer, editor and a striving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in business and she always seeks success. She loves sharing the lessons she learned with others. Feel free to connect with her on Twitter @LisaBMichaels.
