College is a vital time for young adults. It’s a time to discover what you want to do with your career. It’s a time to meet new people and establish lifelong friendships. And it’s a time to create healthy financial habits.
Yet, building healthy financial habits can be especially difficult due to the ever-rising college tuition and costs. In fact, the average student loan debt a student accrues by the time he or she graduates is $37,172. With college prices on the rise, what can you do to improve your financial habits and decrease your student debt?
1. Establish a budget.
Managing your money may seem like the last thing you want to do after a long day of group projects, exams, and classes. However, if you develop good habits early, you will worry less about finances throughout college and may even have a nest egg available after you graduate and start your adult life.
While many people create an annual budget system, it might be helpful to start off with a semester-based system. Put together a budget of how much you need to spend each semester on tuition, fees, housing, food, gas, entertainment, medical, and miscellaneous expenses. Creating a budget will help you avoid running out of money before the semester ends.
To establish a strong budget, you should find a website or app to manage your budget. RentPlusMoney is a great personal management money solution. This tool can help you build credit, track spending, manage and reduce debt, and achieve financial goals. At RentPlus, our goal is to help you become financially smart, financially strong, and financially prepared. RentPlusMoney will help you on your way to financial freedom.
2. Create an income.
College is expensive. How do you plan on paying for all of the fees and expenses? Do you need to get a job, take out student loans, apply for scholarships or grants, or ask for help from family? Whatever you plan to do to pay for your expenses, make sure you have enough to get you through each semester. Keep track of how much you owe and try to limit expenses used from student loans. The less you have to borrow during your college years, the better off you’ll be after college when you need to start paying it back.
3. Cut expenses.
College can be a lot of fun. There are so many social, athletic, and academic opportunities available at each corner. It can be easy to get distracted by all of the fun and exciting events and parties happening each week. While it’s good to have fun and enjoy your experiences, don’t forget the reason why you’re in college in the first place.
Yes, it’s good to have fun in college – and you should! However, if you create a budget each month for entertainment and dining out expenses, you’ll be able to create lasting memories and avoid financial heartache after college.
There are some expenses you can’t really avoid in college like tuition, fees, books, housing, utilities, transportation, and phone bill. But you can control how much you spend on entertainment, food, and other personal expenses.
If you need help identifying what you should be spending your money on, you should check out the financial education program, FinStrong. FinStong will guide you through time-proven personal financial principles that will help you make financial decisions tailored to your values.
4. Start saving now.
It’s never too early to start saving. If you work part-time during college, you should put some money away each month towards savings. And, if you can save enough money to pay for the next semester, you’ll be much better off than trying to pay off your credit card or student loan afterwards. Be smart with your finances and save up a decent nest egg if you can, and, in doing so, you’ll give yourself a strong head start as you set off on your new career.
Paying for college can seem like a daunting task. There are so many fees and expenses. You have enough to stress about with classes, internship hours, and social engagements. If you create a budget now, you’ll be able to enjoy the exciting opportunities in college without the financial stress of how you’re going to make ends meet each month. Build healthy financial habits now. Your future self will thank you for it later.