As a college freshman, your parents and the world in general consider you a responsible adult. What this means is that no one will tell you when to attend classes, when to study, what healthy or unhealthy foods to eat and finally, how to spend money wisely.
What you ought to know is that college is a turning point for every freshman especially when it comes to finances. If you make wise financial decisions at this time, you are assured of financial security as you grow up but if you make poor financial decisions, you are doomed.
Here are vital finance management tips that will let you take control of your college student finances.
Budget! Budget! Budget!
Majority of college freshmen usually get excited when it comes to spending. They end up spending all they have in their bank account as well as money from their parent’s generosity. By the time they realize that they are in a bad financial situation, it is too late.
As a college freshman, the first thing you need to do even before stepping in campus is to learn how to budget. A budget basically allows you to map your income and expenses. For example, your income may be generated from a part time job, student loans, grants and other forms of financial aids. Your expenses will cover both personal and education needs and wants.
Yes, you want to own the latest iPhone or Samsung Galaxy phone but are they priorities at the moment? By creating a budget, you will learn to live within your means and avoid overspending on stuff you don’t need.
Use smart technology to manage your finances
Today, mobile technology has advanced so much such that there is an app for everything. For example, if you want to monitor how many glasses of water you have consumed in a day or how many lunges one has performed, you can do so with a smartphone app.
Using the same mobile technology, you can also manage your college student finances properly. For starters, most banks have gone mobile too providing mobile access to customers. As a result, one is able to save and even pay off their debts via mobile.
That is not all. There are apps that can help you organize your spending into categories. One such app is Mint. As a personal finance and money manager, the app allows you to get alerts and schedule payments on the spot. Furthermore, it allows you to say goodbye to late fees as well as deliver payments fast.
Be smart with your first credit card
It is important to know that poor management of your first credit card will affect your credit score especially as a college freshman. This will definitely lock you out of financial opportunities. In my opinion, you really don’t want this.
To manage your first credit card properly, use it for emergencies only. Avoid making purchases just because the vendor is promising you a free T-shirt or large pizza. By doing so, you will build credit and as a result, your credit score will remain in good standing.
Remember, when selecting your first credit card, always read the fine print. You can request for explanation on issues you are not clear with.
Use public transportation or ride sharing
Majority of college freshmen own a car because it makes them look cool. What they seem to forget is that a car is not an asset unless it’s making money for you and your business. As a result, one will end up paying for insurance, gas and other charges during the course of owning the car. This is quite expensive especially when you are trying to manage your finances effectively.
To avoid these unnecessary expenses, opt for public transportation or ride sharing. This will allow you to save money which can be used to purchase personal or educational items. The good news is that you can still buy a car once you graduate and have a job.
Cultivate a culture of saving every month
As said earlier, college freshmen are at a vital point in their lives. If one ends up spending the money they have without budgeting, the result is a cash strapped college student. As a result, one may be forced to pawn of their stuff or engage in illegal money making activities on the side.
The good news is that you can avoid this situation entirely. All you have to do is cultivate a culture of saving every month. When you purchase something with cash and you are given change in form of coins, save them. At the end of the week, deposit the amount in your savings account. If you are working a part time job, set a fraction of your wages as savings.
You will thank us later.
Managing your college student finances is an important exercise not only when you are a college freshman but as an adult too. The reason why it’s important to start managing your finances when you are a college freshman is because it allows you to set a strong financial foundation. Not only will you learn how to budget but how to spend wisely, save, open a checking account and invest.
This will ensure that you are financially secure as you grow.