Transitioning to life as a college student is exciting and challenging at the same time. You have more freedom and plenty of new things to try, but you also have to be responsible for your actions and be more meticulous when it comes to managing your personal finance. After all, life as a college student is also a transition to adult life, and financial independence is something that is best achieved early.
As a college student, you have more tools and resources to use when it comes to managing your persona finance. There are countless apps to help you keep track of your expenses and more investment opportunities to try. In this article, however, we are going to focus on the 5 essential financial tips to help you get started. Let’s have a look, shall we?
Build a Credit History
If you are lucky enough to get a credit card from your parents, you are already well on your way towards building a credit history. If you don’t have a credit card just yet, you also have several student credit cards to choose from.
Using a credit card to manage your expenses is handy for two reasons. First, the credit card allows you to keep track of your expenses and practice responsible personal financial management early in the game. At the same time, responsible use of your credit card is also a great way to build a strong credit history.
Having a spotless credit history will give you an even bigger advantage in the future. Lenders are more likely to work with those with a good credit score, so maintaining proper use of your student credit card allows you to get more affordable loans in the future.
Separate Needs and Wants
I know how tempting it is to buy everything you want and have as much fun as possible as a college student; I’ve been there myself, and I know how everything seems easy. While you can still have a lot of fun in college, knowing how to separate needs and wants is a crucial skill to have.
You need to keep your expenses under control, and the only way to do that is by knowing the essential expenses and having the ability to separate them from the non-essential ones. you can budget for entertainment and non-essential expenses once the basic expenses are covered.
Start with a Budget
Speaking of budgeting for entertainment, having and maintaining monthly budget is another must-use tip to keep in mind. With a budget in mind, it is much easier to know how much you can afford and plan for the expenses you need to cover.
Setting a monthly budget is not as difficult as you think, especially since you now have mobile apps and websites to help you. You can budget for rent, utilities, entertainment, groceries, and other expenses, and then keep track of your personal finance as you make those expenses.
Budgeting lets you see if you are sticking to the plan in real-time. If you spent too much on eating out, for example, you don’t have to wait until you run out of money before making corrections and adjusting how you spend your money.
Explore Your Options
As a college student, you also have access to more loans and financing options. Anything from student loans to personal loans are only a few clicks away now that you can get quotes from multiple lenders online. What’s important is that you understand the available options and when to use them.
Personal loans, for instance, are great for coping with larger expenses without putting too much stress on your personal finance. Short-term loans, on the other hand, are more for emergencies and expenses that you can cover upon receiving your next income.
Only borrow the amount you need and avoid borrowing for non-productive and non-essential purposes. While you can always use credit cards and loans for partying and buying stuff you don’t need, doing so will only lead to more financial problems in the future.
More Ways to Save
Another habit you want to pick up when you are in college is saving on everyday expenses. Once again, technology is on your side when it comes to finding deals and special offers. There are always coupons to use and discounts to claim, and they are only a few taps away.
You can take saving money a step further too. Rather than buying new textbooks, get a Kindle and search for digital copies; alternatively, search for used textbooks and resell them once you have completed the course.
These moneysaving tips are easy to find. As mentioned before, there are so many ways you can save. The money you save can then be allocated towards investments, allowing you to generate more income and strengthen your personal financial state. You will be financially independent in no time.