College is the time where we depend on scholarships, grants, loans and our part-time jobs to get by. But while we’re working so hard for our future career, we can forget to put away money now that we’ll need once we’re thrust into the real world, diploma in hand. You may struggle to pay for basic amenities now, or have a difficult time divvying up your budget in a way that covers the necessities such as books, supplies and food and still leaves you some cash in your pocket for fun.
These five tips are ways that you can start keeping track of your income and begin not just living better with what you have, but also put away money for your future that will make the transition into full-blown adulthood much easier post-graduation.
1. Create a Budget
It sounds like a pretty unnecessary tip to mention, but there is a vast majority of college students and even adults who don’t actually have a real budget. They know approximately how much they’ll earn each week or month, take as much as is needed to cover their immediate bills and expenses and are then left pinching pennies to get buy until Pay Day rolls around again.
The key to crafting a budget isn’t just knowing how much you earn, but also how much you need. Rent. Food. Utilities. Phone. Cable. These are all bills that, if you don’t have now, you will sometime in the future. What are the bills or financial obligations that you owe each month? Write them down and calculate an exact amount rather than an estimate.
Now approximate how much money you’ll need for food. And this doesn’t mean eating out. Restaurants, food trucks and the on-campus cafeteria are easy and tempting for busy college students, but they’re also expensive. Your money is much better well spent at a supermarket. And if you don’t know how to cook, there are loads of simple recipes you can find online that are simple and satisfying for beginners.
2. Start Paying Loans Now
A lot of students are shocked by the massive payments they have to make each month on loans. One way to make sure this amount won’t break the bank later is to make small payments each month, even in increments as small as $10-25.
3. Use a Banking App
Nearly all of today’s major banks have mobile applications that you can download for free and use to keep track of all your transactions. We’re all connected to our smartphones practically 24/7, so why not take advantage of the opportunity to keep on top of our finances? When your balance, withdrawals, deposits and more just a few taps away, there won’t be any need for guessing what you have left and running yourself into the negative.
4. Avoid Credit Cards
If you qualify for a card, it can be awfully tempting to treat yourself left and right, especially when you’re in college and so used to living on a budget. But the thing about credit cards is they come at a massive cost, often in the form of exorbitant interest rates that will leave you paying triple what you actually charged. Using cash and checks can keep you from overspending, and it can help you keep better track of your finances. You can find designer checks online to save money too.
As wonderful as weekend trips, new clothes and the latest gadgets are, it’s much better to wait a few years and save up to buy what you want rather than potentially ruining your credit at a young age and sabotaging your future. Your credit score plays a large rule in renting an apartment, buying a house and even getting a job. It’s not something to be taken lightly.
5. Start a Savings Account
You may think of your savings account as the place to keep the money you aren’t supposed to use unless there’s an emergency, but in actuality, a savings account is a way to keep your monthly budget intact, prepare you for your future and serve as a financial disciplinary tool to keep you on track with your spending.
Keeping a tight budget in college is often a necessity, but it doesn’t have to be impossible. Taking simple steps can help you better track your finances and stay within your budget.