Start On A Strong Foundation!
Whether you’re going back to school or you’re about to send your oldest to university for the first time, it’s important to remember that good money management is one of the biggest keys to success both in school and after graduation.
Although nearly everyone comes out of school with at least some debt, keeping that debt to a minimum is one of the best things you can do for your future.
Helping your kids to understand not only the value of money, but ways to minimize what they must borrow, will help set them on a firm financial foundation, long term.
Minimize Student Debt
There are several ways to minimize student debt. Make sure you cover all the bases before sending your freshman off to school.
- Spend on the Right Things. Naturally, college students shouldn’t use financial aid to fund pizza night in their dorm rooms, but temptation is a powerful thing. Take the time to impress the importance of using debt wisely. Even if loans look like “free money” now, they do come back to bite you. It’s your job as a parent to define what is and isn’t okay for your child to use loan money for. Tuition, books, housing, and maybe food plans – not social outings, new clothes, or pitching in for a party keg.
- Borrow Only What’s Required. Not every student heads off to school with a fully-funded college trust. If your child needs to take out student loans, remind him or her that the amount borrowed should be commensurate with the type of salary available once a degree is obtained. Even if your student does choose to borrow money for school, it should be for school. Taking out more cash to fund an extravagant campus lifestyle might seem important now, but could be a serious problem later. Freshmen should start a pattern of living frugally now so that they’re not paying interest on things like a bigger dorm room or fraternity fees later.
- Fund Extras with a Job. If your coed wants to fund a social life, it should be done with a part-time job, rather than student loans. Work-study positions usually offer the flexibility a student needs with the convenience of location, while off-campus positions frequently pay more. Either way, teach your child to have a “pay now” policy for nonessential purchases so that he or she doesn’t really pay for them later.
- Funnel Extra Earnings to Loan Payments. Try to add extra loan payments into your child’s budget by using funds from a part-time job or from monetary gifts to help pay down student debt. While loans technically aren’t due until after graduation, paying them off while in school can help your student save serious money when it comes to long-term interest.
– via www.moneycrashers.com
Small Tips Add Up To Big Differences
Once you understand the value of a dollar, it gets easier and easier to find the small changes in your daily life that quickly add up to major savings. Making coffee at home rather than running through the shop on your way? $3-$5 per day still in your pocket!
There are tons of ways to make these changes, and below are a few great places for anyone in school to save a few extra pennies and put yourself on better financial footing. Money management doesn’t have to be a pain – in fact, once you get in the habit it can start to feel like a sport!
Budget for everything
It can be easy to assume bills are the only thing you need to include in your monthly budget. Wrong! Those Starbucks coffee runs can add up fast.
“The biggest thing I’ve learned is to have a budget for practically everything,” says Yogin Patel, a sophomore at Arizona State University. “That means dedicate funds every month towards eating out, going to the movies, late-night snacks, books and supplies, socializing, etc. Keep in mind these budgets should let you save a portion of money every month, which is key.”
So where do you even start with creating a budget? Check out these basic budgeting apps!
Purchase used school books & sell your old ones
Prices for certain textbooks have reached astronomical levels. It can also be difficult to get yourself over to the bookstore at the start of the semester when you know you’re about to spend way more than you’d like.
Search on Amazon for used textbooks, or shop places like Chegg or Valore, which hold loads of used textbooks for much less than if you bought them from your university bookstore. Another money-saving tactic would be to take advantage of any eBook offerings from your school.
Automate your savings
It might feel fruitless to put away a bit of your paycheck into savings each month, but that kind of perseverance pays off in the long run. If you’re one who struggles to save a portion of your earnings on pay day, make the decision once and for all and automate your savings. Most banks have a link on their website in order to help you set this up. If you run into questions, call your bank teller and inquire about your options.
Get creative & find fun for free
It’s tempting to go out to eat and plan social activities that revolve around spending money. After all, what else is there to do in life that doesn’t cost money? Well—a lot of things!
David Bakke, a finance expert at Money Crashers, suggests replacing a few nights of bar-hopping with some at-home entertainment. Host a game night or rent a movie and enjoy a little entertainment free of charge. There’s a good chance you can find a few friends who are on-board with saving some cash.
– via www.rasmussen.edu
What were the best money tips you heard when you were in college?