March 27, 2017

3 Ways to get your finances under control as a student

Managing your money during college can be tricky for a number of reasons. The financial burden of higher education has never been more of a pressing issue for young people, and many high school graduates are taking control of their finances for the first time ever. How much do you really understand about banking, credit, insurance, and understanding your taxes? Most universities have tools and options to help you get a handle on your financial aid and how much you owe, but there are plenty of other expenses, which can be hard to estimate before you really experience college life. Textbooks, rent, groceries, and gas can put you underwater long before you think about going to the bar with your friends. If you’re struggling with trying to figure out how to balance these expenses, along with planning your future, these are some fundamental skills you need.

3 Ways to get your finances under control - photo copyright Rick Sherrell

1. Assess your Budget and Make the Obvious Changes

You don’t have to plan your monthly spending down to the last cent, because usually you can’t, but you should have an idea of how much money is coming in and how much is going out. Look at your sources of income, which probably include financial aid, money from your job, and any help your parents are providing, and then look at what you’re spending it on. Chances are, ways to save money will instantly occur to you. If you’re spending too much on driving, think about using your car less or shopping for better car insurance rates. If your food bills are too high, try investing in a meal plan at your school or simply eating out less. And think before you go out drinking every night. Besides the obvious effects on your health and study habits, the U.S. Department of Health states that college students in America spend a whopping amount of money on alcohol – $5.5 billion every year, which averages out to $50 a month for every student. In most cases, you can improve your financial literacy simply by taking it more seriously.

2. Consider the Smallest Things

Many people of every age could improve their financial situation by giving a lot more credit to the tiniest money decisions you make every day. Whether it’s using ATM machines that charge $5 a transaction, procrastinating so you have to buy last-minute new textbooks, feeling like you need that Starbucks latte every morning, or driving to class when it’s two blocks away, these choices really add up. Young people often fall into the trap of procrastination which is normal and expected – in fact, Psychology Today finds that 20 percent of people deliberately look for distractions when facing difficult tasks. College is full of difficult tasks, but avoiding your responsibilities as well as hunting for distractions can be expensive in the long run. Think about it every time you are out spending instead of at home studying.

3. Think About the Most Cost-effective Way to Finish School

Understanding your finances also means looking at the bigger picture, such as how long it is taking you to get your degree. Your parents and the government are guaranteed to appreciate efforts to finish as quickly as possible. Financing a fifth or sixth year of college because you didn’t take a full course load is an unnecessary financial burden for everyone involved. Of course, it’s not uncommon for students to take longer to graduate because of tuition costs and the fact that more and more of them must work to finance their own education. Time Magazine estimates that only 40 percent of students graduate in 4 years, and that altogether, a public school university education runs $4,000 to $5,000 every extra year. You can’t fool yourself about these prices, and you need to have a plan for how you’re going to shoulder them. For many people, college is about more than parties and pledges, it’s about finding extra employment, starting a savings account, making smart decisions about credit, and applying for all the scholarships they can.

There’s a lot to think about when it comes to handling college life, and too much of it has nothing to do with your classes. The cost of higher education in the United States is out of control – a fact that nobody could deny. But getting your degree is also more essential to your financial future than ever before. It may be overwhelming, but it’s worth it, and the great financial habits you form in college can benefit you for the rest of your life.

About the Author: Amy Thomson blogs for Monkey.co.uk. You can follow her on Twitter @VroomVroomAmy.

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