6 Practical Money Management Skills Every College Student and Recent Grad Need to Know
College life is a hell of a roller-coaster experience, and every current student or recent grad can relate. From attending lectures, living alone possibly for the first time in one’s life, being the sole custodian of one’s finances and, of course, enjoying the newfound freedom, it is an experience one will forever remember.
But as they say, freedom comes with responsibilities. For a college student, one among these responsibilities is how you prudently manage your money and steer away from screwing up. It is in college where both the money-savvy and the extravagant chart the course of their lives.
Why Every College Student and Recent Graduate Needs To Be Smart With Money
See, not everyone exits college being good in money management, even though such skills ultimately come in handy later in life. If, for example, someone graduate and immediately gets a well-paying job, but doesn’t have the all-important hands-on experience on finance management, he or she will find it hard to succeed.
The essence of it is also evidenced by the lack of proper credit card management among the recent crop of college grads. They are finding it hard to pay off their student loans and still live a decent life. Among those still in college, many even have no idea what budgeting is, let alone the whole concept of being judicious managers of their finances.
Moreover, what they often don’t understand is how important these money management lessons go, not just while in college, but later in life. Frequently, anyone who starts on the right footing with all-things finances does have a great chance of being a success financially in the future.
Money management is all about discipline and being accountable with every coin that’s in your wallet. And so, to set a proper foundation for your future, you need a firm understanding of the whole art of money management while you are still a college student.
Here are some of the most critical money management skills for college students to understand today:
Learn the difference between a ‘Need’ and a ‘Want’
Before going to college, you might not adequately tell the difference between the two, mostly because it is your parent who funds you. But at college and rightly so once you graduate, you will need to tell the difference between these two concepts. Your understanding of them will help, both when you are budgeting and also once you are about to dedicate your time and money on a specific cause.
Needs are all those things you can’t be without – food, clothing, shelter, and so forth. Wants may come later, perhaps once you’ve paid off your student loan or when you’ve firmly established your financial future.
Be responsible with your Credit Card
You must have already obtained your first credit card; after all, you are now an adult. But that doesn’t mean you go about taking three, four or more of them. Be careful with credit cards – they might ultimately burn your ass!
Your credit card should only come in handy when you are at an emergency, and there’s no other source of cash. Basically, the card should teach you the essence of financial discipline while helping build your credit score. For your everyday errands, you should instead opt for the money lying idle in your savings account.
Make a practice of budgeting and to sticking to it
You’ve got the freedom to spend your cash on whatever you would wish, and enjoy college life like anyone else. But a carefree lifestyle is expensive to maintain, not to mention the consequences it often has on the present and future wellness of a student. You might get into debt with far-reaching costs if you ignore the basic principle of managing your expenses well.
Whether you are still a student or you’ve just graduated, start teaching yourself the importance of being shrewd with your money. Basically, learn how to budget for your everyday expenses as this will help seal all the loopholes that often steal your money. You will also start getting conscious of your net worth and what you could do to save more.
Budgeting isn’t complete until you consistently stick to the laid-down costs. You will adjust your lifestyle until it suits your limited resources while adopting proper habits with your money. All these behaviors will later be of importance later in life when you need to structure your expenses to suit your incomes.
Some of the best tools to augment this endeavor are a host of student budgeting apps. Download and install them on your phone – they will ease it.
Start living on a shoe-string
College life is expected to ‘harden’ you in readiness for life in the harsh, brutal and unforgiving life out there. And one among the skills it should teach you is how to live on a budget, not just for the mere glamour of it, but more so because of the little you have at that particular moment.
With lots of bills and expenses to meet – tuition, books, food and accommodation, and other sundry costs, you must learn to budget for everything. And all that won’t come in vain since, if you leave college knowing the harsh realities of life, your first and subsequent paychecks will undoubtedly get a prudent use. So, start living on a shoe-string and embrace it!
When buying textbooks, don’t always go for the ‘brand-new.’
Not just textbooks, but anything that could be a perfect budget-breaker. Some college textbooks are mandatory to have, yet extremely expensive if bought off the college bookstore. In this case, go for what’s sold by fellow students instead.
If you can’t find one from within the campus bulletins, try your luck on eBay or Amazon instead. Lots of them are often listed there at more than half the original price. Some websites even rent textbooks at a much cheaper cost. Therefore, be smart with your money in college and buy from a more affordable source.
Always be on the hunt for cheaper deals and discounts
Your money management expertise isn’t all about saving and living on a budget. It also entails being on the lookout for more competitive deals and discounts on various necessities.
Students typically are the masters at discovering different coupons and discounts. You too shouldn’t hesitate to explore the various ways of saving on your shopping. You can check out whether the local stores have discount programs or scour the web for student discounts. Use them to save more money on your everyday expenses.
Be tight-fisted with your dollars, even when you are on the frugal mode. Don’t deviate from the ultimate goal of managing your money and never let anyone, not even your roommate, to coerce you into splurging extravagantly. Keep a budget, work on building a good credit score, and let all these be a habit. You will definitely look back, ten years from now, and thank the sacrifices you made, having established a solid foundation for your finances.