The following is a guest post from Jon Haver who writes about paying off student loans.
Managing money for anyone is hard, especially if you are a college freshman out on your own for the first time. It does not need to be so scary though. Here are 7 financial tips that will help you get on a good path to financial freedom while in your first year.
1. Don’t get caught up in credit cards. Credit card companies love college students. College is usually the first time most people get credit cards. It’s easy to overspend and what may not seem like a lot of debt can become crushing. High interest rates plus college students having a limited income make credit cards hard to pay off. With most student already having loans the last thing you’ll want is a lot of credit card debt too.
2. Build your credit. While it is very important not to get caught up in credit cards, this is also a great time in your life to build your credit. If you make the right choices now regarding your credit it can help you down the road when it’s time to buy a new car or a house. Good credit will also make it easy to consolidate those student loans you will have to start paying off in a few years.
3. Finding the right bank account is very important. First you want to find a bank where you can access their ATMs. With ATM fees at a new high the last thing you want is to pay $3.50 every time you need to take money out of the ATM. Second, you’ll want a bank account with no fees. Some banks’ fees can be up to $15 a month! Which equals $180 a year in fees! Third you’ll want a bank account with the tools to help you manage your money. You’d be shocked how much just being able to look up your balance with a convenient to use app will help you keep in check with your money. Lastly you’ll want a bank account that will be easy for your parents to deposit money into in case of an emergency.
4. Learn how to make a budget and stick to it. This is a perfect time in your life to learn to budget. You are the only person you need to worry about money wise so learning how to make a budget now will make it easy to make a budget when you have a family, and every penny counts. It will also help you say no to frivolous expenses. Sticking to a budget in College especially when dating can be a challenge but is very important!
5. Start saving. Since you really don’t have a lot of expenses now is a great time to get into the habit of saving. Taking $10, $20 or $50 out of each check now won’t really affect you financially. So it doesn’t hurt to start getting in the saving habit while your young! And you just may get a good head start on paying off those student loans.
6. Go used or rent textbooks. Textbooks are super expensive. There are services where you can rent your textbooks like www.chegg.com or www.bookrenter.com. Or instead of buying your books from school directly you can buy your books from amazon.com for a fraction of the cost. Some textbooks are also available on IPad or another e-reader for a lot less than the cost of the hard copy. If you do go for the hard copy when you’re done with your textbook you can always sell it on amazon or ebay and get yourself something nice!
7. Learn the difference between need and want. When you learn what you really need compared to what you want you’ll spend less and save more, and when you’re in college. Think before a purchase do I really need that super cool, but overpriced chair when you could buy something more functional and more reasonably priced.
Following these 7 tips will help you reduced your student loan burden when you graduate.