How to Manage Your Money in College: 5 Tips for Students
At Ascent, we provide free resources to help you throughout college, which may include links to third-party websites (where security and privacy policies may differ from Ascent’s). For our disclaimer, please click here.
While personal finance should be a required subject in school, most students lean on family and friends to help them learn healthy money habits. Even with the support of family and friends, you might be left with questions about managing your money in college, applying for credit, and staying out of (or at least minimizing) debt.
Whether you’re a seasoned personal finance pro or afraid to check your credit score, incorporate these five tips into your routine to help shape your financial future.
1. Create a budget.
If you haven’t already, one way to start managing your money in college is to create a budget. Sticking to a budget in college might seem like a challenge at first, but it ends up paying off in the long run (pun very much intended). Budgeting helps you get a better look at your financial situation every month or every week, which is key to managing your money.
- Step 1: The first step in budgeting is keeping track of your total expenses, which might include things like tuition, housing, books, school supplies, groceries or meal plans, and transportation.
- Step 2: Next, it’s crucial to focus on how you’re getting the money to cover these bills, such as applying for a scholarship, loans, savings, credit or debit cards, support from family, or a paycheck.
- Step 3: Lastly, it’s important to identify the gap that might exist where your available money doesn’t fully cover your expenses. How do you plan to fill this gap? You may consider starting a side hustle.
2. Download a personal finance app.
Swipe out of Instagram and download one of the many personal finance apps on your phone. These apps make it easy to see how much you’re spending and can even help encourage you to save money. Not sure which one to try?
Here’s our list of the best personal finance apps and how they can help you:
- For the Budgeting Master: YNAB (You Need A Budget) based around zero-based budgeting (30 day free trial)
- For the First-Time Users: Mint syncs with user’s accounts to track spending (FREE)
- For the Subscriptions Lovers: Clarity Money identifies your recurring expenses and helps to cancel unwanted accounts (FREE)
- For the Math Pro: Albert analyzes your income, spending, budget to decide how much to save each month (FREE)
3. Understand your credit and credit cards.
Are you considering a credit card? Finding the right credit card can be tricky to navigate when you start managing your money in college, and you don’t want to learn about interest and fees the hard way. Some credit card companies offer college students the option to sign up for a card while still in school. It can be normal for students to spend quickly before thoroughly understanding all the responsibilities of managing your credit and credit cards.
So, how do you use a credit card responsibly? Here’s a few quick tips:
- Limit how and when you use your card: Some might argue that to avoid interest, you should avoid using credit cards altogether given it’s the costliest method of payment when you incur interest charges. However, sometimes real life can sneak in and you may find that you need to use your credit card, so another strategy is to restrict your card usage. For example, you could only use your card to pay for gas and make a habit of paying off your bill right after leaving the pump.
Tip: Know you’ll be too tempted to use your card? Leave it at home (in a safe place) so you can resist the impulse to buy something you might not actually need.
- Try to pay more than the minimum balance: To keep your interest charges at bay, you should try to always pay as much of your balance as possible each month. Making the minimum payment can result in the maximum interest charges over time.
- Schedule your payments in advance: Almost every credit card issuer gives you the option to schedule your payments in advance. Usually, you can automatically pay your minimum balance, your entire statement balance, your current balance, or any other amount you choose. After you schedule your payments, carve some time out to set payment reminders in the form of emails, text messages, or calendar alerts. Most credit card companies send out these reminders of your statement being available, or when your payment is due.
- Keep your card safe: Another vital aspect of maintaining your credit is guarding your card’s security. Avoid leaving your card in your car or on your desk at work. Also, (this may seem like a no brainer) don’t take pictures of your card that include any identifying information such as your card number, security number, etc. Worried about using Apple Pay with your credit card info? Turns out, Apple Pay (and other similar platforms like Samsung Pay) is actually safer than physically using your card. Apple Pay requires another level of security before you can use it. You have to enter your passcode on your phone or use face or fingerprint technology to access any info. Also, Apple Pay uses several layers of encryption to protect your information and they don’t store your full account number, meaning a potential fraudster cannot access your credit card number using Apple Pay.
4. Research your options.
How much money do you actually need to borrow? Take time to consider different ways to lower your education costs, whether that’s applying for scholarships, grants, or federal aid. At Ascent, we’re invested in your journey to academic success and financial wellness by offering benefits beyond just a student loan. Using our Bright Futures Engine™, you can visualize your college choices’ potential financial outcomes (based on school, major, years in school, cost of tuition/living expenses, etc.) to help you make a more informed decision and maximize the return on the investment in your education.
5. Save money (where you can).
Make saving money in college a priority. It can help keep you from overspending, and you’ll be able to put a few dollars aside for future unplanned expenses. You can start by saving for your tuition each quarter or semester. Whether you’re working summer jobs or have a part-time job during the school year, saving toward your education now can help in the amount you end up borrowing, which will make a difference later when your payments and interest add up.
Things happen, and it’s always good to be prepared, so work on saving up for an emergency fund. If an unexpected expense arises, like your car breaking down or having to replace a textbook, you’ll be able to tap into that fund without stressing about where you’ll find the money.
While you may be getting started on your higher education, it’s important to remember that you don’t need an extensive background or degree to master the art of managing your money in college. Whether you set up a savings account today or download a budgeting app, taking the time to invest in your finances can really pay off.
For more tips on how to budget your money, please visit the link below.