Oct 12, 2015 | Harrison College
It is no secret that college can be expensive, and we are not just talking about tuition. You have to buy textbooks, school supplies, groceries and clothes. You might be responsible for paying rent or covering the costs for a car, including insurance and gas, and you may even have family members to support.
Even with all of these costs adding up, you can still successfully manage your finances to make sure you graduate without fiscal problems to solve. View the tips below to discover how you can manage your money while you get an education.
One of the biggest mistakes people can make, even when they have a lot of money, is thinking they do not need to monitor how they spend their money. Creating a budget solves that problem. Start with your fixed costs (i.e., what you know you have to pay). These include rent, bills, car payments, groceries and other expenses. List those items and how much they cost (or how much they cost on average). Add them up, and subtract them from how much money you make. This will give you an idea of how much you can spend on other things—or how much you can save.
Above, we mentioned fixed costs, such as rent and groceries. Those can be classified as needs. Additional costs can be classified as wants. These might include a Netflix or HBO subscription, an extra pair of shoes, a new pair of sunglasses, a budget for ordering food at restaurants or going bowling with friends. Because you do not necessarily need those types of things, you should make sure to consider how you allocate your money. Wasteful spending can be a big problem, especially when you use a credit card.
Having a credit card has its pros, but it can also be a negative if you are not careful with how you use it. For example, if you use your credit card to pay for a weekend vacation that costs $500 but know you will not be able to pay off your balance by the end of the month with your current income, this may harm your finances. Building credit is beneficial when you pay your credit card bill on time and use your credit card only for things you know you need and can afford. You might try using it for one or two main purchases, such as a car payment or groceries, but make sure you pay your bill on time, every time. Building credit can eventually help you make larger purchases, such as buying a house once you have more stable income after graduation.
Even though we mentioned paying your credit card bill on time to avoid incurring additional fees and debt, you should also pay your other bills on time for the same reason. When you do not pay bills on time, you may be charged a penalty, which could increase the amount you have to pay. Stick to your budget, and make sure to pay your bills on time.
Sometimes, you may spend a lot of money, and you might be scared to check your bank account balance. Do not be! You should always know how much money you have to spend on your needs—and, occasionally, your wants. By avoiding checking your balance, you may enter into dangerous financial territory. One of the best things you can do is understand how much money you have.
One activity that many people have trouble doing is saving money. Open a savings account if you can, and set a goal—even a small goal, such as $25 per month—for how much you will save. If you save $25 each month for one year, for example, instead of spending it on your wants, you will have $300 to spend on a larger purchase after you graduate. This money could be put toward buying a house, supporting your family’s needs or investing in a new car. Saving money is one of the most beneficial financial activities you can engage in.
Even though this seems like “social” advice, it is also financial advice. If you hang out with friends who go out to eat every night, you might also find yourself spending money at restaurants many times per week. However, if you decide to socialize with friends who enjoy cheap or free activities, like hiking or going to complimentary concerts, you will be able to save more money to use on your needs in the future.
Understanding your finances can be difficult, but we are here to help you while you are on your journey to academic success. If you would like to find other information about managing your finances or helping you pay for college, such as enrolling in the federal work study program, please visit our financial aid page, or contact a financial aid analyst at 888.544.4422.< Back