Learning to integrate the right financial skills is a lesson best learned in your 20s. Not only are you more likely to take risks to achieve your goals but if you do happen to stumble along the way, it's much easier to bounce back in your youth.
One common mistake that many college aged individuals make is assuming that fiscal responsibility is something that you just wake up with one day. Unfortunately, that's not the reality. Sensible money management skills are learned and refined through years of practice. To ease the process a bit, we've put together a list of the five ways you can better manage your financial resources while in college.
Tread with extreme caution when it comes to credit cards. While you may be inundated with offers boasting a 0% interest rate for the first 18 months or a special low introductory APR, it's important to take a long, hard look at what you're really signing up for. Fine print is notorious for containing hidden stipulations, extra fees, and limitations. On the flip side, it's recommended you open a student credit card and pay it off in full each month to build your credit. This will increase your chances of qualifying for loans and other forms of financing later in life. The major lesson to learn, however, is to spend responsibly. By this, we mean not charging more than you can realistically afford and pay off each month. If you're concerned that you may not have the self-discipline to stop yourself from splurging, consider getting a secured credit card. These types of cards hold a cash collateral deposit which serve as the credit line for the account.
Make a Budget
Designing a personal budget can help you better funds for things like tuition, books, and housing. Do yourself a favor and start the process by making a list of your cash inflows and outflows. By tracking your spending each week and matching it to the amount you're actively bringing in, you'll have a comprehensive picture of where you may be overspending or where you have some wiggle room.
Control Impulse Purchases
Impulse purchases can get the best of even the savviest shopper. With that being said, there are a few methods you can employ to prevent splurging from taking over your entire budget. The next time you head over to a retail store consider leaving your credit card at home, and instead taking a set amount of cash. This limits your ability to splurge significantly since you won't be able to charge up to your credit limit. Another technique is to make a list of exactly what you're intending to purchase and get in and out of the store without deviating.
Opt for Used Whenever Possible
College comes with a host of costs not limited to tuition and housing. One of the biggest investments you'll make is in your textbooks. With some priced upwards of $400, you could spend your entire budget on textbooks alone which is why it's in your best interest to purchase used whenever possible. Check online with retailers like Chegg, Amazon, and SlugBooks. You can even find used bookstores in your local area by conducted a simple Google search.
Many eateries, restaurants, and boutiques in close proximity to universities and colleges will offer student discounts just to bring patrons through the door. Usually, the institution can tell you which establishments offer these deals and discounts otherwise there's no harm in simply asking the retailer.
In all, living on a tight budget while in college is achievable. Although it may not your ideal financial situation at this point in time, it's a stepping stone on the path to total financial liberation.