August has arrived and many high school seniors are eager to head off to college to start the next phase of their life. Although college is an exciting time for students, it requires young people to assume a greater responsibility for managing their own money.
While college students might detest the idea of making a budget, knowing how to manage money is vital to the college experience. Students have the opportunity to learn personal finance tips on budgeting and smart spending strategies before they head off to school. Here are some tips to help students make sure that they are prepared for this transition.
Open a Checking or Savings Account
If an incoming college student does not already have a checking or savings account in their own name, they should consider establishing one before heading off to school. Most banks offer checking and savings solutions for students. The options cater to a student’s specific wants and needs.
Create a Budget
The trick to a budget is sticking to it. This is incredibly important for college students. Students should list monthly income sources—including savings, wages, and parental allowance—then write down estimated expenses for the month. Once all possible costs are accounted for then students will be able to easily create a personal budget.
Students should keep track of all personal purchases, no matter the size, to see where their money is going. Personal finances can easily surprise anyone, but once students understand how much they are spending then they can make positive adjustments on personal spending habits. Mobile banking allows its users to quickly access personal account information from any smartphone and track potential expenses.
Understand Credit Card Guidelines
Credit cards can be a convenient way for college students to make purchases. However, if credit cards are not carefully managed, then debt can pile up fast. College students should be educated on how credit cards work and the pros and cons before leaving for school. College is an exciting time but it can also be expensive for students. Learning the basics when it comes to money management can help students form a strong foundation for the rest of his or her life. Laying the groundwork for smart budgeting and spending habits in college enables college students to handle responsibility and learn the value of accountability.