College is starting up around the country right now. My sister just began her freshman year of college, and like many people her age, this is her first time living away from home. For most people, going away to school is an eye opening experience. In a lot of ways, it’s sink or swim. Hopefully you already have a strong financial foundation. If I had to boil it down to just a few tips for how to financially successful in college, I would recommend these tips:
Live within your means
The most important thing you can do for your finances is live within your means. If you spend more money than you earn, you will always have financial difficulty. No amount of credit will erase the problems you can bring upon yourself. The key is to stay out of debt from a young age.
Use credit responsibly
A key to living within your means is using credit responsibly. There is nothing wrong with using a credit card as long as you pay it off every month. If you decide to get a credit card, you should have a basic understanding of how credit scores are determined and how to improve your credit score. And stay away from those credit card booths that give away t-shirts and koozies for signing up for a card. You’re better off getting a cash back rewards credit card, a card that will give you cash for signing up, or one of the best student credit cards. The rates for these cards are usually better and you get rewards for using them. Again, be responsible with credit!
Set up an emergency fund
An emergency fund is important to keep you out of debt in an emergency. How big it needs to be while you are in college depends on your situation. If your parents are supporting you, you may only need $100 to catch the bus or train home. If you are completely on your own, you might want to have a thousand dollars or more. Try to save until you have sufficient funds to cover your situation. You can save yourself a lot of money and heartache by staying out of debt.
Hopefully you have some form of income – maybe from a part time job, a monthly allowance, or something else. If you paid attention to the first few steps, you are living within your means, using credit responsibly, and have a little extra saved up for a rainy day. Now you need to try to find a little extra to save if you can. Even if you can only save a little bit of spare change it is worth doing. It adds up quickly!
There are many ways to save money, the key is finding something that works for you. Actively seek out deals like saving money on back to school computers, try to find ways to make free money, etc. A little extra money in the bank gives you security and allows you to splurge once in awhile.
Invest in yourself
You are more than your bank account. Invest in yourself. Your career and your ability to create income is your greatest asset. There are many things you can do to enhance your career opportunities. Learn a language, learn some sales and marketing skills, and above all, chase opportunity. You are young and now is the time to see, do, and experience many new things, both personally and professionally. Do it.
Don’t put too much stress on yourself. College is a time to live and learn, and once you graduate, you are the only person who is ever going to care what your GPA was. You will thank yourself later if you go out and experience life instead of sitting in your dorm room studying every weekend. And you don’t need to spend a lot of money to have fun. There are literally hundreds of free ways to have fun in and around college campuses. Find them!
Good luck, and enjoy your college experience!
This article is part of the College Money Network’s Back to School Giveaway.