Managing expenses as a college student can be challenging. From nights out with friends to sudden coffee plans, the temptation to spend money is always present.
If you’re starting college soon, here are some tips you can follow to manage expenses:
Create a Realistic Budget
Creating a comprehensive budget as a college student can help you manage finances, prevent overspending, and develop good financial habits.
First, write down all your income sources, such as loans, scholarships, or part-time jobs. Then, note down the necessary expenses, such as rent, utilities, food, books, and transportation. Don’t forget to consider optional spending, like movies, eating out, travel, or gifts.
You can follow the 50-30-20 rule, where 50% of your budget goes to necessities, 30% is allocated to discretionary spending, and 20% is used for savings and debt repayment.
Open a Bank Account
Now that you’ve a robust budget, it is time to open a bank account to track your spending. College students can open two types of bank accounts:
Checking Accounts
A checking account is ideal for day-to-day expenses. You can get additional credit cards and debit cards to pay bills, withdraw cash from ATMs, and make purchases. Open a checking account that offers little or zero fees to avoid unnecessary expenses.
Savings Accounts
If you have enough funds to support your college journey, consider opening a savings account for long-term planning. Choose one with low fees and high interest rates.
Assess your needs and long-term financial goals to find the best bank for college students.
Use Credit Cards Wisely
Having a credit card allows you to build a credit score, which can be beneficial in the future. However, it is vital to adopt wise credit card habits. Here are some tips you can follow:
- Maintain a low balance on the card (ideally less than 10%).
- Pay at least the minimum credit card payment on time.
- Be mindful of your spending. Don’t put things on the credit card that can be easily paid off using your monthly budget.
The last thing you want is accumulating credit card debts in your early 20s. Therefore, use your credit card wisely or choose one that offers rewards.
Utilize Student Discounts
Student discounts can significantly reduce the cost of everyday living. You can get discounts on:
- Movie tickets
- Concert tickets
- Event passes
- Technology items, such as tablets, mobile phones, or other tech gadgets
- Public transit fees
- Restaurants and clubs
Student discounts are easy to access; a valid ID is all you need.
Don’t Waste Your Meal Plan
Most college students buy a meal plan and forget about it. There is no harm in eating out once in a while, but don’t make a habit of it. College is expensive, and buying individual meals every day can max out your budget in the blink of an eye.
Meal plans also eliminate the hassle of planning or shopping for every meal and help you stick to your budget.
