When it comes to college and money, they do not go together as well as you may think. In fact, many college students have trouble affording some of the things they need while they learn to better manage their finances and learn how to appropriately spend their money.
One of the best things you can do for yourself is make a plan for the future before you enter college. Below, we will go over some tips to help you better manage your finances in college.
Decide between Necessity and Want
There is a fine line between what you NEED to have and what you WANT to have. For purposes of being able to manage your finances in college, you need to decide what you NEED and not what you WANT.
For example, you need to pay for rent if you live off campus and you need to eat food. But, you do not need to eat out at the local restaurants every day and you do not need to go out to eat and drink with friends. You can easily spend $50 – $100 per week at the grocery store and have enough meals to keep yourself sufficiently fed.
Avoid Credit Cards
When you can, you should avoid credit cards. These pieces of plastic will get you into more debt that you can wrap your head around. In fact, it is not wise to use a credit card unless you have the money already in your checking account and can pay it back immediately.
Often times, people use credit cards to live outside of their means. What this means is that if you make $500 per month, but you spend $1,000 on your credit card, you are living outside of your means. You will quickly find yourself in a lot of debt and struggling to stay afloat.
Consider Other Alternatives for Your Textbooks
Textbooks are expensive. Did you know that you do not have to purchase your books through the bookstore? In fact, if you have the funds available, you can purchase the textbooks you need from anywhere you can find the books. It is possible to find your school books on sites such as eBay and Amazon for a lot cheaper than the school bookstore. You could save yourself hundreds of dollars per semester by purchasing your books elsewhere.
Minimize the Amount of Debt You Will Have
When it comes to debt, you do not want to have massive amounts when you graduate. The average amount of debt a student graduates with is $30,000 for a four-year degree. This is a lot of money and will be a lot more by the time the loan amount is paid down.
To help you minimize how much debt you take on, always consider alternative means to loans FIRST. For example, find out if you qualify for any grants or scholarships. Both of these options do not have to be paid back and can significantly cut down the amount you need to pay out of pocket for school.
Once you have exhausted grants and scholarships, you can look into student loans. One thing to keep in mind is that you do NOT have to borrow all of the money that is offered to you when it comes to your student loan. In fact, you can elect to borrow however much you want and you should only borrow what is required to pay for your classes and books. For example, if you are offered $8,000, but your classes will only cost $3,000, only borrow $3,000.
Set a Financial Limit for Yourself
When it comes to spending money, it is easy to overspend and you may find that you have minimal money left over each month. To help combat this, you should set a spending limit for yourself each month. For example, do not necessarily place an amount on activities or food, but instead, give yourself a $100 or $200 spending limit for the month. You can use this money for whatever you want throughout the month and when it is gone, it is gone until the next month.
The tips above can help you better plan and manage your finances in college. Remember, the more you save now and the more you put toward your current debt, the less you have to worry about in the future.