Debt Free: How to Keep Your College Years in the Clear

Your college years are a crucial point in your life. The decisions you make over these next few years will either set you up for success or failure in life. There is no middle ground, especially when it comes to finances, so choose wisely.

Below are three ways to stay out of debt during your college years and get off to a great financial start in life.

Do Not Sign Up For Credit Cards

You’re going to get a lot of offers in the mail for credit cards once you turn eighteen. You need to understand this: credit is not money. Credit cards bring debt into your life, and credit card debt is probably the very worst kind of debt there is, because it comes with huge interest rates, and because it is revolving credit, you can keep re-borrowing that money every month after making a small payment. It is a downward spiral, and it will keep you from accomplishing many of your major life goals. According to Menexis, a company that will process credit cards online, says that many of their worst clients are students.

Make the commitment right now to live within your means and only pay cash for what you need. This will be one of the most important decisions you ever make, and can help keep you out of debt.

Build up an Emergency Savings Cushion

What do you do when an unexpected expense comes up? What will you do if your car gets stolen or you have a medical emergency? If you are living from paycheck to paycheck, then you will only have two possible options: go into debt, or dip into your emergency savings.

And guess what? You can’t cover unexpected expenses with your savings if you have no savings, so you have to plan ahead. You have to expect the unexpected and put a little money into your savings account every pay day.

"Pay yourself first" is a fundamental strategy used by all financially successful people. A portion of every paycheck you earn needs to go right into your savings account. Don’t it all on your bills, food, and entertainment. Discipline yourself to put a small amount of every dollar you earn into savings, even if it’s just $10 a month.

You will need that money in the future. This is a fact. And if you don’t have anything saved up for unforeseen expenses, debt will be your only other option. And debt should never be an option for you, if you want to achieve any real financial freedom in your life.

Spend Your Money ASAP!

When you get your paycheck, what should you do? You should spend as much of it as you can within the first 48 hours!

Does that sound irresponsible? It’s not, and here’s why.

You’re not going to go out and blow that money on fast food, video games, and recreational activities. You’re going to pay as many bills as you can, fill up your gas tank, and buy some gift cards for the grocery store. You’ll also put at least ten bucks in your savings account.

Spend money on your needs first, then if there’s anything left over, that can be spent on your wants. Needs first, then wants. If you do it the other way around, you’ll run out of money before the end of the month, and you’ll end up not having enough money to pay your bills.

As a college student you have many places to spend money, and a lot of bills to cover. Hopefully with a little foresight and planning you’ll be able to plan for anything unexpected and keep yourself out of debt.