No matter what your academic choices are, college is an excellent time to learn one of the most important lessons of your life – how to take control of your own finances.
As daunting as this sounds, there are simple, straightforward steps you can take to put yourself on the right footing and become a master at managing your money.
“College is a great time to master budgeting and saving,” says certified financial planner Shannah Compton Game, host of the Millennial Money podcast. “Create a simple budget where you track your money inflows and outflows and set guidelines for your spending.”
Learn to budget and make savings where you can
The new college year is fast approaching and a whole new generation of students will be beginning an exciting chapter of their lives.
While good grades in college may set you up for a prosperous and fulfilling career, learning about money as a young adult can make a big difference later in life. It can also help ease the next big transition down the line – from graduation to starting a career.
This can be quite a learning curve for many young people, notes Mark Wernig, CFP and principal at Dowling & Yahnke Wealth Advisors: “A lot of young adults are surprised when they actually take the time to think about what expenses they will potentially incur on their own.”
He adds: “It may or may not be the first time they’ve actually thought hard about what ancillary expenses may surface beyond just tuition – there’s everything surrounding living independently to consider.”
This offers an excellent opportunity to really look at where your money is going and you will quickly start to see trends. It’s also a great way to see where savings could be made. Make sure to explore offers and special rates for students where applicable, as these can lead to much-needed discounts.
Apps are your friend Tracking your expenditure needn’t be a chore, when there are reputable apps available for download to your phone or tablet that automatically track and classify what you spend.
Story continues Most of them allow you to set budgets or specify spending limits and will warn you when you approach any restrictions that you set yourself.
Become credit card savvy “One thing I would encourage new college students to do is get a credit card in your name,” advises Autumn Lax, a certified financial planner at Drucker Wealth. “Developing good credit and good spending habits is one of the most important lessons for young people to learn.”
The apps can automatically sync with all of your bank accounts and credit cards – once given permission – and can give you a dashboard view of all of your finances. You can also customise reports if you have specific areas on which you would like to focus. Beyond tracking spending, they can also help you set goals for paying off debt, saving a certain amount per month as a nest egg, or putting money aside for a specific purchase.