For many students, college is a time when individuals express their independence away from the rule and reign of their parents. Some may push the limits of what they have been taught, and can get into trouble if they aren’t careful. One of the ways that students get in trouble is with their finances.
You want to finish college to earn your degree, but should strive to accrue as little debt as possible. If you’re not careful with the money that you spend and borrow, you can be stuck with debts that can be difficult to pay off. Here are some tips to help you be in control of your college finances.
Student Loans: Between grants and loans, financial aid awards allow students to get the education they would otherwise be unable to afford. Financial aid is need-based, and there are several types of awards. When you apply for financial aid, try to submit your FAFSA before the priority deadline, usually in early March. You will get preference for the best types of financial aid, such as Pell grants and subsidized Stafford Loans. Although private student loans are available, the terms are not as favorable as with federal funds. As with any loan, be wary to accept more than you need.
Credit Cards: Credit card companies often solicit students on campus, giving away free swag like t-shirts and water bottles if you sign up on the spot. These cards typically have poor terms, and it’s difficult to make an informed decision on the spot. If you are considering a credit card, spend some time comparing the different cards available. Look at the annual percentage rate (APR), annual fee, penalty fees and grace period. Choose a card with a reasonable credit limit (such as $1000) to avoid getting into too much debt, and make your payment on time every month.
Budgeting: In order to be a good steward of your finances, you need to establish a budget. It doesn’t need to be complex, and there are many apps and websites that can help you keep track of the money you have and how you’re spending it. If you find yourself running short on cash, it’s helpful to review your spending habits and prepare a budget. If you have a daily habit of a $4 cup of coffee, it’s easy to spend over $100 per month. Budgeting can help you be aware of where you need to cut back, and how much money you can bear to splurge.
Student Discounts: Merchants know that students are strapped for cash, and many offer student discounts to help bring students in the door. Many schools have a page on their website listing local deals available to students. If you have a 2-for-1 deal, grab a friend or roommate and split the cost of the item or activity. In addition to student discounts, there are websites that offer printable coupons and mobile apps that offer specials when you “check-in.”
Weigh Your Options: Choosing the college or university that you will attend is not the only big decision to make when planning for college. You will need to determine a place to live, decide if you’ll live with roommates, and whether you will have a car or use public transportation. If you’re attending a school near home, it may be most cost-effective to live at home. Transferring schools can be very costly, and you may lose credits in the process. Do your homework about the school you attend to make the best decisions possible for your future.
Consider a job: If your course schedule permits, a part-time job can help cover living expenses and keep borrowing to a minimum. Look for on-campus jobs, which may give you more flexibility with your class schedule. Aim for 10-20 hours per week to assure adequate time for study, recreation and rest.