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Recently accepted to college? Congratulations! One in four adults currently are paying off student loans, with a collective total of around $1.5 trillion!
Sound terrifying?
Graduating college completely debt free isn’t possible for most of us, but there are a few things you can do to help avoid complete financial disarray at the end of four years.
Keep reading for eleven financial tips for college students that you may not know!
1. Limit Student Loans When Possible
The education system makes it fairly easy for students to borrow more than they actually need. Financial literacy isn’t a focus in high school, so many students don’t really understand what borrowing large sums means for the future.
Over one million people default on student loans every year, so be sure to understand what your payments will look like down the road.
Use student loans only for school-related expenses. This means tuition, housing, and school food plans.
2. Live Within Your Means
We aren’t suggesting living on ramen every day. But while in college, you likely aren’t working full-time or maybe even at all.
As such, money you do have should be used wisely. Don’t go out for fancy four-course meals or buy top dollar alcohol. Buy generic of as many products as possible. Maybe even make your own like this DIY hair conditioner!
If you don’t live on campus, live with roommates to decrease rent costs. When you do have some extra money, consider saving it or paying a portion of your loans.
3. Create a Budget: One of the Best Financial Tips for College Students
Don’t groan too loudly. You will have to grow from spending whatever you had in your account to accounting for bills very carefully. While your parents may help out in a pinch, you shouldn’t count on that.
Start by looking at bank statements. Categorize your purchases to see where most of your money is going. Common culprits? Daily coffees or lunch dates with friends.
If you need help getting started, check out online resources or an app like Mint.
4. Have an Emergency Fund
You can’t budget for everything, even if you try. What happens if your car needs to be repaired and your parents won’t help? Maybe your laptop gets stolen and you have a term paper due soon.
Enter an emergency fund. This should be an account that you have easy access to, but won’t accidentally spend. Start with about $1,000. You’ll be surprised at how much peace of mind you will have knowing you have just in case cash.
5. Use Credit Cards Wisely
Credit cards are controversial. They can be helpful to build credit during young adulthood if used smartly. Used incorrectly, they can lead to thousands of dollars of debt.
Using credits cards is especially dangerous because most come with interest rates above 20%.
If you do decide to get one, set a limit on how many times you will use it. Think about only using it for gas at first.
Research other personal loans extensively before applying. Companies like Bonsai Finance lays out helpful information on applying for online loans.
6. Avoid New Textbooks
Ask any current college student about textbooks and they will tell you paying for them sucks. Especially when a professor decides to not really use it.
One of the best things you can do is to always buy used books. Get over any weird feelings about not having a crisp new book for each class.
Search online for the cheapest options. Amazon and Chegg are popular sites many students use.
7. Work Part-Time
College coursework will likely keep you busy. Nobody is expecting you to work 40+ hours while studying for midterms and finals.
But consider seeking out an on-campus job. These often are only a few hours a week and are very understanding with student schedules. It won’t seem like a lot, but making a little money here and there can help keep loan interest in check.
8. Always Ask for Student Discounts
There is no shame in taking advantage of your student status. Many businesses offer discounts or freebies.
Restaurants and retail stores commonly will offer 10-20% off, which can be huge on a tight student budget.
Always carry your ID and just ask. Nobody will judge you for asking.
9. If Possible, Pay Loan Interest As it Accrues
As touched on throughout this list of tips, interest on student loans can be a killer. Understand your loan terms and keep tabs on your account through your college years.
When possible, from a campus job, summer job, etc., pay interest that has built up on your loans.
This will help limit the impact of capitalization when you graduate. This essentially means any outstanding interest will get added to the original loan amount and increase your minimum payments!
10. Take Advantage of Free Campus Activities
Schools often offer free or discounted music or comedy shows. Instead of heading out for a night on the town, consider getting a group together for one of these free events.
Some schools may even have museums or field trips you can partake in.
Finding value in on-campus activities will also keep you from the temptation of going out and driving. Drinking and driving can be devastating to your college experience.
11. Know How to Protect Personal Info
One last tip you may not have heard before is to be careful with your personal information. Don’t leave your social security number or checks laying out in your room.
Be wary of even sharing passwords with friends.
One slip up could be costly. Fraud cases often aren’t caught right away and can cause headaches for years to come.
Enjoy College While Being Financially Savy
College is an amazing time where you will meet new people and increase your knowledge. But it can also be a time where poor money decisions can haunt you for the rest of your life.
With these financial tips for college students in your back pocket, you will be prepared to succeed.
What are you most excited about for college? Let us know in the comments!
