The good glory days. The best time of your life. The college experience has a pretty good reputation.
College is an exciting time full of learning, fun, new friends, and once-in-a-lifetime experiences that can help you build the foundation of the person you want to be and the life you want to live.
The downside? College is expensive. For many people, there are few periods where their spending far outweighs their income. Understandably, this can be intimidating!
Even if you stick to cheap, student-friendly meals (who doesn’t love a good bowl of ramen?) walk or bike to class, or rock the same pair of sneakers till they fall apart, the costs of tuition, housing, books, and more will always add up.
To help you stay financially healthy and prepare for a fantastic financial future, here are Extra’s five money tips for college students:
1. Create a Budget
Knowing how to budget as a college student can be the difference between graduating ahead of the game or behind the eight ball, financially speaking.
We all have that friend who wisely managed their money during school, balancing income, savings, spending, and even investments to enter the working world with stability.
We also all have that friend – or, more likely, friends – who spent money like it was going out of style to chase the “perfect” college experience, only to graduate broke.
Who do you want to be?
To build yourself a college student budget, the first step is creating an airtight spending and saving plan.
Review your monthly expenses across various categories – school costs, travel costs, groceries, household goods, phone/internet bills, streaming subscriptions, etc. – and forecast the amount it will take to cover each. Then compare these totals to your monthly net income from your part-time job, allowance, grants, loans, etc.
Throughout the month, track your spending to see if you’re following your budget.
If you fall short, review your expenses to identify “money sucks,” nonessential goods/services you can do without. If you come out ahead, put the leftover money into savings or possibly your investment portfolio.
To make things easier, check out the many college budget templates or budgeting apps available online that let you fully customize a spending and saving plan that fits your needs.
2. Start to Build Credit
Alongside good grades, valuable work experience, and memories to last a lifetime, a solid credit score makes graduation day much sweeter.
After all, your credit score plays a crucial role in getting an apartment, loan, and any new credit cards after school. We’re assuming you may want those things someday.
If you're ready to start building your credit score, Extra is the best way to begin this journey. Let’s be clear, Extra is not a credit card. Its a debit card that help you build credit. At the end of every month Extra totals up all of your purchases and payments and reports them to credit bureaus to build your credit.1
3. Monitor Your Student Loan Debt
Along with frat parties, group projects where one person does all the work, and questionable dorm bathrooms, few things are more synonymous with the college experience than student debt.
In a sobering statistic, more than 44 million Americans have student loans amounting to $1.75 trillion in debt.
For many students, loans are unavoidable. Often, the best thing you can do is work closely with your parent/guardian and possibly a financial advisor to find the best loan(s) for you with favorable interest rates that allow you to pay off your student debt at a reasonable pace.
Whether you agree to make interest-only payments or pay off some of your debt in school, always make your payments on time to keep your credit score as high as possible.
Extra Credit: Understanding how student loans affect your credit score is the first step to tackling them head-on!
4. Consider Investment
Our time at college teaches us many things – like math, science, history, and the lyrics to “Mr. Brightside” – but often, personal investment is not one of them.
Saving money keeps it safe but stagnant. Instead, investing your funds is often the best way to grow your financial assets.
While in college, you should avoid risky investments, study the market, and, if you have a job providing income, consider investing in a Roth IRA.
A Roth IRA is an individual retirement account in which you deposit after-tax dollars but enjoy tax-free withdrawals.
While retirement feels like a long way off – unless you’re a sixth-year senior on your second victory lap – a Roth IRA offers an excellent way to build your wealth by a factor of 4 to 9 by the time you retire.
5. Take Advantage of Student Discounts
Your student ID can do more than get you onto campus. It’s also a golden ticket that gives you access to DEALS DEALS DEALS on more things than you may even imagine.
From restaurants to clothes, groceries, and gas, that little piece of plastic – or your student email – can score you big savings at brick-and-mortar shops and online stores.
If there’s a company you often shop from, do your homework on any student discounts they may offer and sign up ASAP.
Even some of the biggest corporations in the world invest heavily in deals for students, particularly regarding valuable subscriptions. Popular examples include:
- Amazon Prime
- Apple Music and Spotify
- Adobe Acrobat
- Microsoft Office 365
College Budgeting in Summary
Saving money in college is about more than avoiding that overpriced $15 campus salad or your fifth hoodie from the campus bookstore. It involves taking a proactive approach to maintaining or improving your financial well-being for your bright future.
Here is a quick recap:
- Creating a Budget
- Building Credit
- Monitoring Your Student Loan Debt
- Investing Responsibly
- Taking Advantage of Student Discounts
You’ll be well on your way to financial peace of mind if you do all these.