How To Manage Your Money as a College Student

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As a college student, you probably already have a lot on your plate. While managing your money might not seem important now, even minor budgeting errors can be costly. Unfortunately, far too many college grads leave school with mounds of student debt and no clear plan for managing their finances. That’s why it is time to learn the right way to manage your money and make it work for you, not against you.

Create a Realistic Budget

Even if you’re a full-time student and your parents are helping you, you still need to know how to manage your money. First, create a realistic budget of how much free money you have each month. You need to account for housing, books, food, and any other costs associated with going to school. Take note of how much is being spent each month on necessities and how much is being spent on outside activities. Creating a budget is even more important if you’re paying for college on your own. Even with student loans, you need to know understand how much money is being spent on things that you really don’t need.

Look to Outside Sources

If you’re working part-time, it still might not be enough to make ends meet. At this point, you have a few options. You can ask your parents for help, or you could consider taking out a personal loan. While it may not be a good idea to take on additional debt as a freshman, getting a personal loan as a senior is a different story. Since you’re getting ready to graduate, you might even have an internship or job lined up. Using a personal loan to pay off outstanding debt can help you gain financial footing while building good credit. As with any type of loan, it’s always a good idea to weigh the pros and cons before accepting the offer.

Save Money the Right Way

How you save money and make your money work for you is just as important as how much you put away. If you save $50 a month but end up spending over half on non-essentials, you need to re-evaluate your financial picture. You can break the cycle by saving only an amount you know you won’t need. In addition, you need to be honest with yourself when it comes to your spending habits. If you like to spend money, only allow yourself a set amount. Put the rest in an account that penalizes early withdrawals or charges a fee after a set number of transactions.

Focus on Student Loans

Getting help paying for your education is great. However, the interest that often accompanies student loans is another story. If possible, only use student loan money to cover the cost of attendance and send the residual back. Speak to your financial advisor and let them know that you want to decrease how much you get when your loans disperse. They can then give you the form to change how much extra you’ll receive. That way, you’ll only be responsible for that money that paid for your tuition. You can always change the amount if you need the money later on.

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