As exciting as it is to be a freshman at university, it’s also probably the first time that you have experienced living on your own. That can present more than a few challenges when it comes to managing money. Fantasy and reality tend to come together during freshman year, at least as far as money is concerned. You need a plan.
In order to properly navigate university from a financial standpoint, there are some tips and practices you can implement that will make your time in school less expensive and more enjoyable.
You’re Not On Vacation – Budget Your Funds Carefully
Related: Interactive Excel Budget Template
Set up a budget that will allow you to spend a certain fixed amount of money each week. By doing this, not only will you keep your expenses under control, but it will also force you to develop skills that will enable you to buy what you need for less than the going rate. For example, you’ll develop methods of saving money on food, entertainment, and transportation. That will enable you to do more with less, and that’s a skill that will benefit you all of your life.
Don’t Overpay For Textbooks
When you go to university you know that you will be paying for textbooks. What you aren’t always certain of is how much you’ll have to pay. The answer is usually more than you think, at least if you are buying your books at the university bookstore. This can cost you many hundreds of dollars each and every semester, and that adds up.
Related: 10 Ways to Save Your Money From the Textbook Black Hole
As soon as you get your list of required textbooks, first check online sources such as Amazon.com to see if you can get the same textbooks for less money. You can quite literally save hundreds of dollars by buying your textbooks online rather than through school. That will leave you more money for everything else.
Related: How Does Chapters Compete With Amazon?
Some Day You’re Going To Have To Repay Those Student Loans – Tread Lightly
When you are in school it is quite easy to pay for whatever you need using student loans. But understand that the day will come when you’ll have to pay those loans back. They are not a gift or grant, but obligations that will require repayment. Embrace that reality.
Your best chance at keeping student loans to a minimum will be to start working on it right now. For example, make sure that you can finish your degree in four years – adding another year or two will also increase the amount of student loan debt you have.
Pay for as many of your expenses as possible without using loans. The less you borrow now, the less you’ll have to pay back later – and you’ll have plenty of other obligations when that day comes.
Related: The Canada Student Loans Centre Problem Solving Flow Chart
Be Careful With That Credit Card!
Chances are, freshman year is your first serious exposure to using a credit card. If you have never used a credit card before, it’s much easier than you think to run up a huge balance that neither you or even your parents can easily pay off.
Use any credit cards that you have as either emergency- or no-other-way- purchases. That will help you to keep your credit card usage to an absolute minimum. You should never think of credit cards as being an extension of your financial resources. That means you should avoid swiping your credit card for everyday expenses, like food, transportation, and entertainment.
Now Is An Outstanding Time To Get A Part-Time Job
Admittedly, recommending minimal use of student loans and credit cards is easier said than done. And getting that done is best accomplished by combining limited spending with a source of income. By getting a part-time job – even just a few hours a week – you can at least avoid relying on a credit card. You may even be able to take a dent out of your student loans by paying for least some expenses out of earned income.
Obviously, classes and study time need to be your priority. But working in a 10 to 15 hour per week job could make a big difference in your finances, both now and after graduation. This is especially true if you start right now, in your freshman year, and carry it through to graduation. It will give you an income throughout your time at university, and allow you to develop better financial management habits, as well as gain some valuable work experience that will come in handy after graduation.
And there’s yet another less obvious benefit to having a part-time job: the time that you spend working is time that you will not be out spending money. That is a budgeting strategy all by itself.
The better that you become in handling money in your freshman year, the less financial stress you’ll have throughout your time in school – to say nothing of your life after graduation. Embrace it like the life skill that truly is.
I think you really hit the nail on the head about student credit card use. Lenders know students likely don’t have the money management experience to handle using credit, and that they’ll build up a balance and carry it for years. We need to remember – credit cards aren’t free money – they’re funds that you pay a premium to access!
Nice seeing you over here Penelope! We’re working on the whole student experience thing… one book at a time!