Managing your money in college can be tricky. While most college students have one or more sources of income, their cash flow may be irregular. This is a financial situation that requires careful planning.
One of the most powerful ways to practice good financial habits in college is by setting up a budget. People with full-time jobs may have a monthly budget, but for college students, it works better to plan for income and expenses by semester.
If a major source of income is financial aid, you'll receive a lump sum of money that must last several months. It's helpful to deposit that money into a savings account and withdraw a set amount each month as if you are giving yourself a paycheck.
Paying Bills on Time
To avoid expensive late fees and to keep your credit in decent shape, it's crucial to pay all your bills on time. To make sure you have enough money to do so, write down all your living expenses for the semester. Subtract the amount of financial aid you'll receive and include any funds you'll get from education savings plans or relatives.
You'll need to make the amount that's left by working on campus or getting a part-time job. Take that amount divided by the number of weeks in the semester to figure out how much extra money you'll need to bring in every week.
Getting an On-Campus Job
There are many advantages to getting an on-campus job. Many schools make a special effort to hire college students. Check with your financial aid department for open positions.
Getting an on-campus job is a great way to network while attending college. It also gives a valuable source of added income while offering college students the flexibility they need.
Keep Credit Card Balances Low
For college students, it's easier to spend less money than it is to make more money. For this reason, keeping credit card balances at zero is a smart plan. Many college students have a credit card to use in emergencies, but for day-to-day shopping or impulse purchases, it's best to resist pulling out the card to handle payment for something you can't afford.
Keeping credit card balances low will also help you maintain a healthy credit score, which is crucial for overall financial health.
Ideally, every college student would have the ability to save money, even while working a part-time job and attending classes. It may be difficult, but setting aside even a small amount from each paycheck is a smart way to guard against unexpected expenses that may otherwise ruin a budget.
If possible, have 10 percent of your take-home pay automatically deposited into a savings account.
Start the Search for a Summer Job Early
For many college students, summer is a time to work hard and save money. If you plan to stay on campus and take a few classes, look for an on-campus job. Start your search early and make sure your financial aid counselor knows that you'd like to work on campus during the summer months.
If you find a great summer job and can pay ahead on your car loan or pay down credit card balances, you'll save interest charges and help improve your financial situation during the school year.