Here’s something many college students may not know – money management during your college years has a direct impact on your employment opportunities after college. No matter how high your GPA is, potential employers will pass you by for another job candidate, if you have a dismal credit history. And it’s not just about excess debt hanging over your head but the message it sends of indifference and poor management skills.
For many young people, college is the first opportunity to live independently. The temptation to enjoy that independence should not include borrowing to fill your every desire. It doesn’t matter if you’re a student enrolling for the first time or returning to complete your graduate degree, good money management should be a top priority.
Establish a Foundation
Start by planning ahead and figure out how you’ll make ends meet while still being able to enjoy your college years. Without some forethought about your future you could easily end up with money troubles that plague you for years to come. A realistic, workable budget is essential – one that lists all sources of income and expected expenses. Track your spending by writing it down or using a budgeting app; this way you can spot patterns and make changes to better manage your money.
If your expenses exceed your income, you’ll need to be creative in finding ways to balance your budget. Learn to live frugally by eliminating those things that you can do without, while finding ways to cut on the necessities.
- Borrow (and lend to) your friends,
- Combine your buying power with others by purchasing in bulk.
- Scour garage sales, resale and consignment shops. Buy used textbooks.
- Use generic and off-brand products – upwards of 25% in savings.
One area young people often overlook, not only students but Americans in general, is in banking. Just like any consumer product, different banks will have different charges for their services. By taking the time to compare, you could save hundreds of dollars in fees each year. Check out the credit unions in your area – they often have the lowest fees for services. Here are some other tips to keep in mind:
- Stick with cash. If at all possible, avoid getting a credit card. This is often the first step to a long fall into debt for many people.
- Make your payments on time. Just one or two late payments can have a negative effect on your credit history and make it more difficult to secure the credit accounts you need in the future for a home or car.
- Review you account at least monthly and report any errors immediately.
- Save a little something each month for emergencies and unexpected events.
Although these tips don’t even scratch the surface of things you can do to better manage and save money, they will help you establish a firm foundation that will change your focus from uncontrolled spending to structured money management.