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Financial Decisions to Make Your Future Self Proud 

Female college student sitting on floor of her apartment understanding financial decisions

It may not always feel this way, but your college days are a great time to start building a secure financial future. After all, studies show that the habits you build now have an outsized impact on how you live for at least the next few decades. So, let’s explore the financial decisions you can make now that you’ll thank yourself for later. 

 What We’ll Cover

  • Apply for Financial Aid 
  • Create a Budget (and Stick to It) 
  • Make Saving a Priority 
  • Establish Credit and Use It Wisely 
  • Think Carefully About Credit Cards

1. Apply for Financial Aid: Grants and Scholarships  

Most college students end up with some debt, but there are other types of aid that can lighten your load. And the less you have to pay back every month, the more you can put towards building wealth.

With the FAFSA complete and your loans figured out, you can start applying for scholarships and grants. Even small scholarships can help free up money for your car payment, phone, and textbooks. And unlike student loans, you don’t have to pay them back.

The less you have to pay back every month, the more you have to spend on building wealth. 

Work-Study and Campus Jobs 

Federal work-study jobs are also a great way to offset college costs. They allow you to work part-time in your field, earn money, and help you avoid debt. 

Even if you don’t qualify for work-study, you may find a campus job. Besides convenience, you’ll earn money, reduce the amount you need to borrow, and you’ll get to network. Your solid work history may even land you a job after college.

2. Create a Budget (and Stick to It) 

A budget is a plan for how you’ll spend your money, and a good one helps you see all your expenses together in one place. If you can balance a budget now, you can balance a budget for the rest of your life.

Making a personal budget will help you avoid overspending, coming up short, or missing payments. Some students using student loans find it helpful to start by listing expenses first so they don’t borrow too much and pay more than they have to. 

Budgeting is different if you’re a non-traditional student because you likely have more expenses to juggle, possibly including a family. But that doesn’t mean you can’t find ways to cut costs. You can also take advantage of additional funding opportunities just for non-traditional students. 

If you can balance a budget now, you can balance a budget for the rest of your life. 

3. Make Saving a Priority 

You may wonder if a savings account is worth it when your money is already spread thin. But even small savings will grow over time thanks to compound interest. Once you get used to seeing the number in your savings account rise over time, you’ll be hooked. Plus, saving is the best way to: 

  • Avoid unexpected debt 
  • Build personal wealth 
  • Have money for fun stuff 

Automating your saving will make it easier. So will using the right savings tool: 

  • Savings account: great for covering unforeseen expenses and short- or long-term savings goals 
  • Certificate account: offers a higher return than most savings accounts and is great for savings goals six months or more away 
  • Money market account: offers higher APY than savings accounts and is great for big, future purchases 

Once you get used to seeing the number in your savings account rise over time, you’ll be hooked. 

How to Level Up Your Savings 

You may be just starting out, but that’s no reason why you can’t aim for some advanced savings strategies now. Your college years are for absorbing a lot of information in a short amount of time. Strike while the iron is hot and make finance a part of your intellectual growth.

Build an Emergency Fund

An emergency fund is savings set aside to cover serious financial situations like job loss or medical expenses. It helps you avoid turning to expensive options like credit cards or loans. 

Strike while the iron is hot and make finance a part of your intellectual growth.

Cut Costs Where You Can

One way to save more is to cut your costs. Take advantage of student discounts, buy used instead of new textbooks, live with roommates, and utilize free school facilities and services instead of paying for them.

Save for Retirement?!

It may sound crazy, but opening retirement savings in your twenties can give you thousands of dollars more in your old age. That’s because compound interest grows your money over time, and the longer you save, the longer it has to work its magic. 

Compound interest grows your money over time, and the longer you save the longer it has to work its magic. 

4. Establish Credit and Use It Wisely 

You might have heard the phrase, “Cash is king,” but really, these days, credit is king. The better your credit, the better your chances for, well, pretty much everything. When you hear “credit,” you may think of credit cards, but there are other, cheaper ways to establish credit. For instance, you can use apps like Experian Boost to report to major credit bureaus when you pay for things like rent, utilities, phone service, or subscription services.

Pay Your Bills on Time 

The biggest factor affecting your credit score is your payment history. Late and missed payments hurt your credit score. If possible, automate your bill pay.

Understand How Credit and Credit Scores Work 

There are lots of myths about what affects your credit score and how it affects you. But sorting fact from fiction doesn’t have to be hard — PenFed has put together a short guide with everything you need to know. 

When you hear “credit,” you may think credit cards, but there are other, cheaper ways to establish credit. 

 5. Think Carefully About Credit Cards

Credit cards can be expensive, but they’re also flexible tools that can help you manage your finances better — if you know how to use them. Before opening a new card, ask yourself some questions about whether it’s the tool you need and weigh the pros and cons of having it.

If a credit card is right for you, then make sure you understand: 

If you’re getting ready to open your first credit card, check out PenFed’s tips for first timers

The Takeaway 

Managing money is one of the biggest challenges most college students face. It isn’t easy! But with a little know-how, you can make financial decisions you can be proud of — and set yourself on a good path for years to come. 

Similar Articles   

A Simple Method to Make Student Loans More Manageable 

https://www.penfed.org/learn/method-to-make-student-loans-more-manageable

How Does Student Loan Interest Work? 

https://www.penfed.org/learn/how-does-student-loan-interest-work

Do Student Loans Affect Your Credit Score? 

https://www.penfed.org/learn/do-student-loans-affect-your-credit-score

5 Things You Need to Know About Refinancing Your Student Loans 

https://www.penfed.org/learn/refinancing-your-student-loans

Disclaimer: This blog was written by our partner, PenFed. Ascent is not responsible for links to third-party websites where the security and privacy policies may differ. 

About PenFed Credit Union 

Established in 1935, Pentagon Federal Credit Union (PenFed) is America’s second-largest federal credit union, serving over 2.9 million members worldwide with $35.3 billion in assets. PenFed Credit Union offers market-leading certificates, checking, credit cards, personal loans, mortgages, auto loans, student loans, and a wide range of other financial services. Our mission is to empower members of our community to achieve their financial well-being. PenFed Credit Union is federally insured by the NCUA and is an Equal Housing Lender. To learn more about PenFed Credit Union, visit PenFed.org, like us on Facebook and follow us @PenFed on Twitter. Interested in working for PenFed? Check us out on LinkedIn. We are proud to be an Equal Employment Opportunity Employer. 

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