Guest Post Author Bio: This is a blog swap post organized from LaTisha at Financial Success for Young Adults where she blogs about smart money management for college students and recent grads.
College freshman have a lot to worry about. You have to decide on a major, figure out what classes to take, make sure you choose the right professors and so on and so on. There is also the money concern. For the first time in your life you are away from your parents and for most college students, you are also beginning to support yourself. Some parents will still give their kid an allowance once they go to college but let’s be real, it’s never enough. There are plenty of money tips for college freshman but I just have three: watch your pennies, start a budget and don’t open a line of credit.
Credit Cards for College Students
Ok, maybe I should adjust that a little. It is really important to build your credit and a large part of your credit history is dependent on the average age of accounts. So how about open a line of credit, but don’t use it. Credit is pretty addictive. If you are just starting college and this is your first opportunity to be responsible with money, you may realize that the freedom goes to your head a little. In my case, it went to my head a lot.
Spend a Little, Spend a Lot
I opened my first credit card as a college freshman and I was rewarded with a free t-shirt. Then I decided to spend a little on the card and pay it off each month. Great plan, huh? Except for the fact that I didn’t have much in savings. My first emergency caused me to go over budget, even though I didn’t have one at the time, and spend my entire paycheck and spend some on my credit card. Now I had a balance and interest growing and paying the monthly payments wasn’t so bad. I realized that I could keep up with the payments.
Start a Budget
Even though my number one money tip for college students would be to build credit smartly, my next tip would be build a budget. A college student can budget pretty easily with free budgeting software such as what is available at Mint or even with just an Excel spreadsheet. The key point is just that you create a budget.
Watch Your Pennies
Be stingy. Don’t forget to get your change back from the vending machine. And make sure you count what the cashier gives you back. Those pennies, nickels and dimes add up, you should get into the habit of watching your dollars. You could be shortchanged for a small amount that you don’t really care about, but if you do not start paying more attention, you also will not realize when you are missing a large chunk of change or when there is an accounting error on your bill.
You will learn more about money as you begin to build a relationship with it and learn to manage it properly.
Do you have a money tip for college freshman?
Great Tips. It drives me crazy how so many credit card vendors pray on unsuspecting freshmen. It really should be outlawed. Just like giving away prizes in unhealthy happy meal boxes…..giving away prizes to freshman who sign up for credit cards is just wrong.
@StrongSide. Agreed on both counts. Happy meals full of harmful food that taunts kids with toys is wrong; and so is the preying on college kids with credit cards. I hate how they get so tricky with the advertising saying low interest, no interest, balance transfer fees waived etc. Kids really have to know their stuff to not get swayed by this. Unfortunately it is a free market so outlawing this probably won’t happen.
This might sound a bit mean but watch out if you start hanging around with people with a lot more money than you. I started hanging around with some seriously rich kids and started spending a lot to keep up with my friends’ spending habits (expensive taste in make-up, clothes, nights out, shoes- in a big way). I could kick myself now for being so stupid!
It’s quite hard staying true to yourself at university, but people will respect you for it if you do. I should have rejected my friends’ uber consumerism….but I didn’t.
@Harry. I have been there too. I too have some of the similar regrets. In fact, I still went through this after college. I started to try to keep up with those in the workforce that made more money than me. It is important to stay true to yourself but it is hard lesson to learn if you haven’t in the past.
Great advice for college students. Credit cards and budgeting are one of the most first things that everyone should learn to use well.
@20’s Finances. Agreed. Credit cards and how to use them is a really important skill to learn. Too many college students get themselves into large credit card debts simply because the facts have not been explained to them in detail.
I thought I read that recently they’ve changed credit card vending rules so that they can no longer be within so many feet of college campuses. I know that a few years ago, credit card “booths” were rampant on campuses. But I think that universities became greatly aware that this was causing serious financial havoc for students. Hopefully this will help a little in student credit card debt.
Excellent Tips, LaTisha!
@LH. Sounds like a good rule. I am not sure if that same rule exists in Canada. I would be interested to find out.
idea is to live below your means in college and in life.
@SB. Agreed but it is a lot easier said than done. So many fall into the trap of competing with others. I know; I have been there.
I think it might be better if they get a credit card AND get good training on how to use it before they leave home (provided the parents are good with credit cards in the first place).
@Suba. Yes that would be the ideal. A credit card can help build up their credit rating but if it is not used properly then problems arise. You are right about the parents too; if they don’t set a good example, a kid is not going to know how to handle their money in the future.
Thanks for the great advice. Another tip would be to not bring a car to college unless you absolutely need to. That way, you will not be spending money on gas and not as tempted to spend on entertainment, eating out, and shopping.
@Dave. I like your suggestion. Like you mention, not bringing a car will not only save you money but it is also greener. If you have to walk to get from one point to the next you lessen your carbon footprint and keep yourself in shape. Best of both worlds.
WORK… Bringing in even a small side income during college makes all the difference… provided you don’t drink it all of course.
@Pat S. Absolutely. Too many kids decide to not get jobs in college because they want to concentrate on their studies. While studying is good, a side income can help with expenses. It really is a learning opportunity to learn how to balance everything which will prepare them for life later on.