Six Tips to Help College Students Keep Track of Their Finances

Written by  //  2014/11/10  //  Money Management  //  No comments

College students have limited money and often, it may be the first time they are keeping track of their own money. This is a crucial time that will impact their financial future. Debt accumulated in college can last for years. When that is paired with student loan repayment, it can appear like a huge hole to dig themselves out of when they’re just starting their lives. These tips will help college students track their money and spending so they don’t get overwhelmed by debt.

Credit Cards

College students often get credit cards because they might have an emergency when away from home. It might even be the first card they’ve ever owned. Often times, however, it ends up causing debt. Students carry an average of $3,000 in credit card debt while in school and 40% of them charged things for which they knew they couldn’t pay. It’s better to steer clear of credit cards entirely and pay cash for items that are needed. There is less temptation to buy items that aren’t a necessity. When students pay cash for items, they can easily keep track of their purchases. Once they have a good record of paying bills on time, credit cards should be used to build credit, not to buy items that are out of the budget.

Budget Monthly

Students should budget money every month for expenses and necessities like food. When a student has a budget, they are more likely to understand where their money goes every month. They won’t incur debt or overspend when following a strict budget. It’s important to remain flexible as well, to allow for changes in income and different needs.

Schedule the Fun

College should be fun, but not result in high debt from overspending. If the budget allows, students can give themselves a certain amount of money each month for entertainment. Otherwise, they can participate in fun, free activities on campus. Students shouldn’t feel like they are depriving themselves of the experiences that college has to offer, but it shouldn’t haunt them the rest of their lives in the form of high debt repayment either.

Don’t Hang with the Big Spenders

When friends have money and party all the time, their group will do the same. If a student is in a group of friends that visit the clubs every week, shop every weekend and spend money eating out every day, that student will find that their money is gone very quickly.  This is when the budget comes in handy. The student who budgets will know exactly how many times he or she can visit a club in a month or how often she can eat out with friends.

Keep Receipts

When new to budgeting, it can be difficult to understand where each dollar is spent. It seems to disappear quicker than expected. The student who keeps receipts can track their spending and help inform the budget for next month. In some cases, a budget might be wrong at first. It will need to be changed monthly depending on circumstances and purchases that need to be made. In one month, a student might need books, but not the next month. When buying books, remember to buy used and keep the receipts. Receipts help students forecast monthly budgets and make changes.

Debt Counseling

If a student has a hard time budgeting, or gets into financial trouble due to debt, he or she might need debt counseling. It’s helpful to get debt counseling before the debt becomes overwhelming. Debt counselors can help students consolidate their bills and create a budget for the months ahead to pay down credit card debt.

College should be a time of learning and fun, and having debt will just become a burdensome distraction. It’s important to follow these tips to have a bright financial future.

Informational credit to Hudson & Company Insolvency Trustee Inc.

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