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5 tips for college students who want to ace personal finances

Early financial responsibility while in college teaches a student on how to wisely spend money resulting to prudent financial decisions in the future.

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You say you don’t have enough financial aid to cover the cost of college? You figure that the grants are enough to get by on? Actually, it might be time to think again. According to this article in U.S. News, parents and students rarely budget enough for personal expenses, such as rising gas prices and extracurricular activities. Plus, the higher the cost of attending a particular college, the higher the budget necessary to cover those expenses.

College is already expensive enough, right? That being the case, you’ll no doubt be interested in these five tips designed to help students stay smart about personal finances.

1. Budget month by month

This is one of the most important skills/habits a student can develop, and one that will serve them well throughout their life. Happily, budgeting while in college isn’t all that complicated, seeing as how income and outlay are fairly limited, and budget templates designed especially for college students are available for free on many school websites, as well as from Microsoft.

Smart budgeting includes the ability to separate wants from needs; you take every opportunity you can to cut expenses. Consider, for example:

• Eating out versus eating in, and/or limiting the number of times you eat out in a month

• Buying used textbooks instead of new ones

• Living with others in order to split rent and utilities

• Taking notes on your laptop instead of buying pricey notebooks

• Choosing the least expensive meal plan that will meet your needs

Even if all you’re paying for is your recreational expenses, those can quickly add up. Check out one student’s freshman-year breakdown, and you’ll get a ballpark.

2. Make every dollar count

Financially smart students don’t jump at the first deal that comes along, but shop around for the best possible. You might be surprised to learn where you can get more for less.

• Housing—Will you save more living on campus, or off?

• Transportation—Bus, bike, or car? If you plan to use your car, it pays to get a few auto insurance quotes to help keep the costs down.

• Credit Cards—Not all bad, because they help you build up a credit rating, but you have to use them wisely—go for a low limit, never use them for an impulse buy, and only charge as much as you can pay off in the same month to avoid interest charges.

Tightening one's belt by cutting down on college extravagance is one of the best ways to increase your savings.

Tightening one’s belt by cutting down on college extravagance is one of the best ways to increase your savings. (Source)

3. Trim luxuries

One of the great perks of college life is the fact that there are so many fun, free things to do: movies, museums, and campus fairs, for example. Take advantage of them! Plus, did you know many colleges and universities offer spring break service trips that allow you to visit exotic locales while helping others? Big savings over a spring break junket you finance yourself.

There are other ways to save on nonessentials, too: opt for a streaming box over cable, listen on Pandora or Spotify instead of buying tunes, use the campus gym instead of a local health club.

4. Set some aside

The thing about rainy days is, they always come, sooner or later. Financial security means setting something aside for the unexpected. This should be part of your monthly budget, and it doesn’t have to be a lot. Set a percentage or dollar amount and stash it in a savings account. You may want to choose a credit union rather than a bank because the latter tend to have fewer fees.

5. Be school savvy

Finally, research the financially advantageous possibilities of your education thoroughly. Can you test out of some classes, rather than paying to take them? Are work-study jobs available? (Working on campus saves transportation and meal costs.) Do you qualify to be a Resident Advisor, thus obtaining free room and board? Have you applied for all available financial aid and fill out the FAFSA (Free Application for Federal Student Financial Aid)?

College student personal finances aren’t rocket science, but they do require thought, planning, research, and self-discipline. No worries, though. You got this.

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

Robert Cordray is a former business consultant and entrepreneur with over 20 years of experience and a wide variety of knowledge in multiple areas of the industry. He currently resides in the Southern California area and spends his time helping consumers and business owners alike try to be successful. When he’s not reading or writing, he’s most likely with his beautiful wife and three children.

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