How to Manage Your Money as a College Student
Miriam Caldwell has been writing about budgeting and personal finance basics since 2005. She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina.
Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.
If you are a college student, then you have a great opportunity to set yourself up for financial success later. It is important to take these times seriously because the mistakes you make in college can follow you for a very long time—even the rest of your life.
Too many students are graduating in the red and facing difficult financial choices when they are just starting out. Take steps to avoid this by focusing your attention on five areas that have the potential to influence your financial future.
Create a Budget
Your first step is to create a budget for college. Even if your parents are paying for everything, you should still create a budget for your anticipated expenses and then stick to it. It will keep your spending on track and get you into the habit of planning your purchases. And if you’re paying for your schooling yourself, whether with the use of student loans or by working, it’s even more important to create a spending plan for your money.
As long as your essentials are covered—rent or room and board, food, tuition, books, supplies—you can still enjoy your college years. Putting off some of your wants until you’ve got your first real job (and real paycheck) may be necessary in order to abide by your budget. Still, if you can make a little room in your budget for fun, do so! When you’ve made a plan for the money you have, you can rest easy knowing your priorities are covered.
It’s not always easy to live on a college student’s budget, especially if you’re paying your own way. But by setting realistic limits on your spending categories and then sticking to them, you’re setting yourself up for good spending habits.
How To Manage Money Effectively
Know your financial goals.
The very first thing to consider when getting started with managing your finances is your financial goals. We can give you all the quick financial tips you could want, but if you don’t have your goals clearly defined it won’t matter because you won’t know which tips might apply to you and which would send you in the wrong direction.
Do you want to retire early? Do you have debts to pay off? Are you a parent who intends to pay for your kid’s college degree, or are you wondering if that’s even remotely possible? The specifics for how to manage money in your 20s are far different than in your 60s.
Have a rough path forward.
Generally speaking though, you’ll want to go into all these steps and any calculations knowing the big picture of how you want to proceed, which in turn tells you which financial planning tips you need.
Stay motivated.
Try to remember that every step you take and every milestone you can check off (even if it’s just one $300 credit card balance) is still progress and another step in the right direction!
Know when you’re out of your element and don’t be afraid of asking for help or advice.
If you truly are struggling to figure something out for yourself, consider hiring a professional to help you manage your finances and learn for yourself, and also look into some “DIY” options, such as robo-investors like Betterment or even Acorns.
Use the tools you need, and find new ones as necessary.
If you’re looking for a simple pen and paper solution, try some of these budget templates. If you want a paper tool that’s a little more thorough/complete, you’ll definitely want to check out our Budgeting Binder, to cover just about all of your financial needs!
Some things really do need to be done a little more particularly. While pen and paperwork just fine for budgeting, if you’re the type to be a little less strict about actually using the paper, you might find that you need a budget app, purely for the purpose of having it on your smartphone, always in front of you, and even notifying you of changes in your accounts.
If you choose not to work with a professional for some of your personal financial management needs, you’ll definitely want to consider investing in some quality money management software, such as Quickbooks.
Resource:
https://www.thebalance.com/managing-your-money-while-in-college-2385965
https://thesavvycouple.com/how-to-manage-money/
https://www.self.inc/info/learn-money-management/