For many young adults, the college experience represents a new transition into being independent. Moving away from home, taking care of your own errands, and balancing your bank account can make students feel overwhelmed and unprepared. In most cases, this point in time represents the foundation of your future money managing habits.
Student financial education has become an important topic of debate amongst universities. Most parents recognize the need for this knowledge, but many do not know how to communicate this information properly.
Financial stress is one of the main reasons that students drop out of college. By learning how to apply good money management skills to their everyday lives, students can feel more comfortable about their spending habits, which translates into better performance overall during college.
For these reasons, our crew here at Zinkerz has taken the time to design several strategies that will help you manage your finances properly during your college years. These skills will also help you form good habits even after graduation.
Create a budget that includes all your spending
Most people do not keep track of how much money they spend every day. While we usually keep track of major purchases and expenses, most minor expenditures go unaccounted for. Guess what: these minor expenses usually add up to considerable amounts by the end of the month. You would be amazed by how much those daily Starbucks Lattes and late McDonald’s meals take out of your budget.
The first major strategy you can apply for keeping track of all your expenditures is to plan ahead of time and design an organized budget. This budget should also include your sources of income, whether it be an allowance from your parents, a part-time job, and/or savings.
Once you determine how much money you have available to spend each month, you should estimate how much you spend on rent, school supplies, personal care items, food, eating out, recreation, etc., and allocate a fixed portion of your available money towards these expenses. Finally, you should also set up a savings account so that you can save a percentage of your income in case of an emergency or an unexpected expense.
There are many online tools and apps that can make this process very simple. The key lesson with this strategy is that your expenses should never be more than your income if you want to stay out of debt. If you are careful and consistent in keeping track of your expenses, you will also gain great insight into your spending habits.
Learn to control your spending habits
Learning how to exercise restraint overspending money is a skill that most of us have to develop the hard way. Online shopping has made spending very easy since you don’t have to leave your house to buy stuff. If you want to control your expenses and save money, it is important that you learn to differentiate the things you need from the things you want to avoid impulse shopping. You don’t need to have the most expensive laptop or clothing to get you by in college.
Learning how to control your spending habits as a student will save you many headaches in the future. Saving money and living a modest life during college will allow you to pay your student loans earlier in life.
Use credit cards with caution
Using credit cards can be very convenient in most cases since we don’t have to carry cash around and we can use them to buy things online. The problem with credit cards is that they make you more susceptible to impulse shopping, and if you don’t keep track of your expenditures, you could potentially find yourself with an unplanned amount of debt.
Some tips that might help you prevent overspending on your credit card is to keep careful track of the things you use it on so that your debt does not come as a surprise. You should also be weary of automated payments and subscriptions such as Netflix and Spotify. Using cash to pay for things is also a good option since we tend to spend our cash more wisely.
Final tips for saving some extra money
In this section, we will share some final tips that will help you save money during college.
- Rent or purchase used school textbooks: Brand new textbooks cost a lot of money, and they are usually required for most classes. Renting books online or purchasing them from another student can help you save a considerable amount of money over the course of your college career. You can also sell your textbooks once you have no further use for them.
- Cook your meals at home: Eating out is very convenient. However, you would be amazed at how much cash you could save if you cooked most of your meals at home. You can organize your schedule so that you plan on eating out once or twice per week and cook the rest of your meals at home. Stocking up on ingredients from your local supermarket is healthier and does wonders for your budget.
- Plan for free recreation: Going out every weekend can be expensive, so you can start planning social activities that don’t revolve around spending money. Plan for at-home entertainment such as movie or game nights. You can also take advantage of your university’s amenities such as the swimming pool, sports areas, or theater. Many of your friends will be in the same situation as you are, so finding some friends who are on board for money-saving fun should not be hard.
The bottom line with college is that it’s expensive, but there are many ways to reduce the cost burden. Being organized and taking control of your financial life early during college will set you up for success in the future. We have included some online sources that can help you with budgeting and renting/buying textbooks.