We all need effective financial advice every now and then. In fact, we need it in practically every moment of our lives if we want to apply the right financial management skills at the right time. While it seems like a great advice is always needed, it seems like incoming college students may need it more than any stage in a person’s life.
You see, you learn a lot of things while you are getting a higher education – and it is not all academic. What you do while you are in college will literally and figuratively mold you to become the person who you will be in the future. It is the time when you really reinvent yourself or solidify who you want to be.
This is why you should not just rely on what you learn inside the classroom. You need to pay attention to what happens in your daily life too. Although most college students are still living under the authority of their parents, they are free to make their independent decisions while they go to school. From their daily schedules, meals, extracurricular activities, etc, you get to learn how to take care of yourself while you are in college. Among all these, probably the most important thing that you will learn is how to manage your finances so you can prepare to pay off your student loans.
According to reports, 2 out of 3 Millennials never learned how to handle debt. It is safe to assume that a lot of them started borrowing money while in college. Since they did not learn how to manage their debts in college, it is now haunting them and keeping them from building their personal net worth properly. They could have used some effective financial advice while they were in college.
Important financial advice for college students
Obviously, you do not want to make the same mistakes as the Millennials. You want to be sure that when you finally graduate, you have the skills that you need to help you manage your finances well. This is where effective financial advice will come in handy. If you want to be financially independent after college, it will serve you well to get your financial act together before you graduate.
So what are the financial tips that should be shared with incoming college students? Here are some of the most important.
Get to know your debt
Most college students have to rely on student loans to pay for their education. It is safe to assume that this is the primary debt that they will have to face while they get their degree and during the first few years after they graduate. This is why it is important for them to understand what this debt is all about. They need to educate themselves about how it should be managed so they will not accidentally make it worse.
Some students blindly keep on borrowing while they are in school – not thinking about how they will have to deal with this when they graduate. If you understand this debt, you can find ways to work on it while you are still studying. For instance, you can choose to start paying the interest while you are still in school. This will lower the overall debt amount that you have to pay for the loan.
Have a budget plan
A survey revealed that 36% of community college students struggle to pay for their food. It may be because they are prioritizing their educational expenses – but the fact remains that sacrificing something as basic as food means their financial situation might be really bad. If you know that your finances are limited, you might want to set up a budget to make sure that your priority expenses will not be forgotten. A budget plan is the best way for you to take control of your finances – especially if it is very tight. You need to get used to using a budget plan anyway so might as well start doing it now. Indicate how much money you get every month and what expenses you need to pay for. This budget plan will tell you if you need to get a part-time job just to make ends meet.
Take advantage of student perks
Another effective financial advice for college students is taking advantage of the perks associated with being a student. You are entitled to discounts so make sure you are aware of these. Usually, you can enjoy discounts on basic necessities. You can also avail of discounts whenever you travel. If you need school-related purchases, you might also be able to get a great deal out of it. You will never know unless you do your research. A lower expense means more savings for you.
Find ways to use less debt
If you are forced to borrow student loans, you need to be cautious of the other debts that you can use while in school. The most popular one is credit card debt. Some people frown upon the idea of having college students use a credit card. But it can be useful – especially as an emergency back up plan.
While you are allowed to use it, you need to make sure that you know how to control it. Given the number of student loans that you already owe, you need to learn how to regulate your use of credit. Do not use it unless you have to. In fact, stick to cash for most of your expenses. If you have to use a credit card, make sure it is planned in your budget. That way, you will know your limitations. Not only that, you are sure to have the cash to pay it in full when the billing statement arrives.
The final effective financial advice is to study hard. Do not waste your time in college. You are spending on your education so you can be good at the career or industry that you have chosen for yourself. Remember that your debt will have to be paid off once you graduate. You only have a couple of months to get your act together before the student loan bills start coming in.
It is important that you excel while in school – not just in academics but also in skills and experience. This will increase your ability to demand a higher pay. The higher the salary, the more finances you have to increase your net worth by paying off your debts and making investments.
How to improve your finances while in college
Hopefully, you can get something out of the effective financial advice provided in this article. Of course, being given an advice is not enough. You need to apply them in your life.
If you really want to increase your chances of success after college, you need to start improving your finances while you are still in school. Fortunately, there are several ways for you to do that – including ways to improve your credit history.
Live on a student’s budget
Start by being frugal with your finances. You have to remember that you are still a student and that means you need to make sure you live on a budget that is appropriate for your situation. As much as possible, live on less. You are here to study and not to travel all the time or party. Make sure you discipline yourself in every expense that you make. And do not forget to take advantage of the student discounts while you are at it.
Use credit cards wisely
Instead of shying away from the dangers of credit cards, why not face your fears and learn to overcome it instead? The truth is, you will benefit from using credit cards while in school – and there is a valid explanation for that. A credit card can serve as an emergency fall back – in case you run out of cash. You do not have to wait for their parents to send money. You can use it to get out of a tight spot. According to reports, 3 out of 10 undergraduates have a credit card. This purchasing tool is effective in helping students build a credit history – but only if you learn how to use it wisely. That means using it within your budget and paying the balance in full when the billing arrives.
Finally, you can also opt to work part-time while you are studying. Most of the time, undergraduates have a lot of time on their hands. Working a couple of hours a week will teach you the value of earning your own money. Not only that, it will give you the extra finances to help you through college. If you are able to earn enough, you might be able to start paying off your debts. Or it can help finance a lot of the entertainment activities that you want to pursue.
Without a doubt, getting an effective financial advice will help you make decisions – but the implementation is still very important. You need to be disciplined about it. You also have to control yourself to make sure you will not compromise your financial position by being reckless in school.