Going off to college marks the first time that many students will be living on their own, without Mom or Dad to help them manage their finances. It’s not surprising that a number of college Freshmen have difficulty managing a cash flow for needs and wants, or that some make poor financial decisions that can carry far past college. If you’re off to school this Fall, here are some tips to keep you in the black:
Know Your Cash Flow
While you may have totaled up the yearly expenses and income for college, do you know WHEN you’re going to have money (and when you have to scrimp and save)? Get a calendar and circle the payment dates for incoming funds like grants, bursaries, and part-time work income, as well as the payment dates for expenditures for tuition, accommodations, and books. Pay attention to where the gaps occur – that’s when you may need to borrow from family or other sources to make ends meet in the short term. Don’t forget, if family or friends have promised you monetary gifts towards your college education; ask for a specific payment date so that you can plan appropriately.
Set a Budget
“Budget” might sounds like a dirty word when you’re looking forward to the “freedom” of living away from home, but it’s a necessity. Because a student’s cash flow is often sporadic, it’s important to know what your monthly or even weekly limits are on spending, to avoid having to eat nothing but ramen noodles come December! Set a reasonable budget not only for your necessary items (i.e. bus passes, laundry soap, clothes, and basic food items) but also for your entertainment (i.e. restaurant trips, events, and late night pizza runs). Don’t forget to budget for seasonal items too, such as train tickets to go home at Thanksgiving or Christmas gifts in December.
Be Smart With Your Credit
Once a student is legally an adult, they become fair game for credit card companies, and many students make the mistake of taking on non-academic debt (i.e. consumer debt) simply because it’s so easy to get a credit card. Don’t be fooled by free t-shirts or “student special” credit card offers, or by banks that say “Well, you don’t have to USE it….” If you don’t need to borrow money to get through college, DON’T. And if you do need to borrow, consider friends, family and structured student loans with lower interest rates before you consider credit cards.