Students probably aren't thinking much about the academic year during the summer, but there are a few things they should consider before they tackle the college experience. Living and working on a college campus will be an entirely new experience and present a unique set of challenges for students to tackle in order to be successful. One of the things college students don't have a lot of experience with is managing money and dealing with financial topics in general, but there are definitely a few things they should know before they start managing their own money.
1. General personal finance
Some students will have had a job in high school, so they might already have a student bank account and know the value of a dollar. Other students will be dealing with their own money for the very first time as new adults. It's essential for college students to learn a little bit about personal finance so they can choose the right student loans, work the appropriate amount of hours at their part-time job, and balance their financial and academic obligations. Students who know a little bit about how to manage money will be a lot better off in the long run and have fewer unpleasant surprises waiting for them upon graduation.
2. Opening a bank account on campus
Most college campuses have a bank branch on campus utilized by teachers and students alike. Students should consider opening an account on campus or working with a financial institution that has a bank branch and ATM access on or very close to campus. Most students will not have a car their first year of college and will need access to their bank or credit union within walking distance of their dorm. It's also important to avoid unnecessary ATM charges when taking out money from a competing bank branch, because every dollar counts when it comes to student living.
3. Avoiding unnecessary fees
Students learning about finance for the first time often get stuck with totally unnecessary charges because of a lack of planning. Although they can certainly learn through trial and error, it’s better to learn the easy way—through organization—how to avoid the most basic financial pitfalls. For instance, students can purchase overdraft protection or check their account balances regularly to avoid overdrawing funds they don't have. Another issue for students and graduates alike is dealing with credit card interest charges. It's best to avoid paying the minimum on a credit card whenever possible. However, not all credit cards are equal, and students should learn which card will give them the best deal for their personal circumstances.
4. Creating a reasonable budget
Creating a reasonable budget is one of the most difficult things a new college student will do, but it's also one of the most essential. Students need to be able to balance their financial tasks with the number of hours they will work at their part-time job and the amount of debt they are likely to incur once they graduate. Students also need to eat, purchase books and other learning materials, and live in student housing while they're at school. There are a lot of financial planning tools available that can help students create a budget that meets their personal circumstances and allows them to focus on learning and getting good grades.
5. Credit management and avoiding debt
Although a few lucky students will be able to avoid student loans altogether, most students will incur some amount of college debt. However, some loans give students very reasonable rates, while others charge an arm and a leg in interest rates. Students can also get into trouble with credit card debt, so it's important to learn how to manage credit and avoid unnecessary fees whenever possible. It's much easier to learn how to cope with these issues before going into debt rather than waiting to deal with it after graduation.
The only way to ease yourself financially is to be smart, do your research, and actively look for ways to save money. Budgeting and money management are skills you can have at your fingertips just by putting in a little bit of effort. And that little bit of effort will go a long way in saving you money and energy.
Practice your organizational and money-calculating skills by using our Scholarship Search Spreadsheet Template to ramp up your scholarship search for college!