College is a time when you start to transition from a teenager to a fully developed adult. Part of becoming an adult is learning how to manage your finances when it seems like you never have enough money to get by. There are some tried and tested strategies that college students can employ to ensure they are properly managing their money.
Here are 6 ways students can stay out of financial trouble while in college.
Stay Away From Credit Cards
While it may seem tempting to put the cost of a plane ticket to spring break on a credit card, the interest and fees will linger for years if you have no money to pay off that charge when the bill comes in. Although credit cards are aggressively marketed as easy sources of money when you have nowhere else to turn, the truth is that they can do you more financial harm than good over the long run.
Therefore, the simple truth is that you should only make purchases in cash or only buy something with a credit card if you can repay the balance in full by the end of the month.
Your Student Loan Is Not a Stipend
It is possible that you will get your student loan in the form of a physical check that you can cash at the bank. While it may be tempting to use a student loan to pay for other expenses or simply to fund your entertainment budget, that is surely something you will regret in the future.
Many types of loans can be discharged in bankruptcy, but not student loans. This means that you are stuck paying back the student loan whether or not you use it to pay for your education.
Hone Your Comparison Shopping Skills
If you are willing to look, there are plenty of ways you can save money on the things you use each day. Use a coupon code site like RetailMeNot that will typically give you anywhere from 10 percent to 25 percent off the cost of shopping at your favorite stores.
For those who like to travel, you can save money one of two ways. You can book your trip months in advance or try booking through discount travel sites that offer custom hotel, rental car and airfare packages to get you the best deal on your next trip.
To save on car or renters insurance, think about bundling your policies with the same company to get a group discount.
Find a Work-Study Program on Campus
Work-study programs allow you to work on campus in exchange for free student housing or the ability to pay off a part of your tuition. If you work as an RA, you are generally given your room and board for free or at a significant discount. While this may not seem like a large perk, not having to pay for housing can save you hundreds or thousands of dollars per semester.
Taking this route can also provide you with skills and contacts that may lead to an internship or a job during or after your time in college.
Buy Used Whenever Possible
If you are a college student, your goal is to keep your expenses to a minimum. To accomplish that goal, you should buy a used car that you can afford to pay with cash up front. In addition to avoiding a car payment, you will generally pay less for auto coverage.
You can find used items like furniture on Craigslist. If you’re looking for something in particular, post an ad and be creative. A headline like “I’ll trade my xbox for your couch” is sure to grab someone’s attention.
Choose To Live At Home
Perhaps the single best method of saving money while going to college is to live at home with mom and dad. It’s not just the room and board you’re saving, but you also don’t have to pay for utilities or even food.
I know it sounds lame, but the money you save can go toward paying your student loans months or years ahead of schedule.