5 Things You Should Learn About Money in College
At college, you’ll have the chance to learn about much more than just academics. For instance, since this will likely be your first time living away from home, you’ll learn plenty about being independent. With this comes money-management skills. In particular, there are a few things you need to make sure you learn now — to survive your college years and beyond.
1. Setting a Budget
There will be many opportunities for spending money while you’re at college, but you need to choose carefully to avoid your money running out before the end of the month. The best way to do this is to set a budget that takes into account your income, your regular expenses, and how much you’re likely to need for other things. You should also make sure you have an emergency fund that you only touch for real emergencies.
2. Saving Money
If you’ll be working while you’re at college, it’s worth putting some money into savings. You should put this money into a separate account where you won’t be able to access it easily. Ideally, you should transfer a certain amount of your earnings into this account each month — automatic transfers make this particularly easy to do.
Dedicate time to researching possible options for your savings account. Knowing how to compare accounts is a useful skill for the future.
3. Building Credit
Whereas you may not need a credit score now, it will be essential for the future. For instance, a good score will enable you to take out loans and credit cards at low interest rates, whereas a bad score will lead to much higher interest rates or even refusals. Landlords may also want to see that you have a credit score before they accept your housing application.
One useful way to build your credit right now is to use a credit card. You’ll need to make your payments on time and in full each month. This means only making purchases with your credit card that you could afford if you paid in cash.
4. Using Student Loans Appropriately
Like all other types of loans, student loans don’t provide you with free money. Depending on the type of student loan you have, you may need to start paying it back immediately or you may have until after you graduate. In either case, you’ll be paying back the amount you borrowed plus interest and you should start creating a plan to pay off your loans while you’re still at college. Using student loans appropriately is another way to build credit, but, again, mistakes will hurt your credit score.
5. Shopping Smart
Temptations abound when you’re shopping, whether you’re browsing online or just going to the grocery store. Before you make any purchase, think about whether you need the item. If it’s something you want rather than need, consider if it’s something you can afford and if it’s a good investment. It may sometimes be better to wait and see if the price drops or to look elsewhere for a better deal.
You’ll learn more about money skills you can use for life if you’re living off campus — an extra bonus is your housing will likely be cheaper, especially when you consider you’ll have no meal plan. You can find affordable Carleton University apartments at the Revalie. Whether you want to live alone or with other students, we have the floor plan for you. All our apartments are fully furnished and rent includes internet, gym access, 24-hour emergency maintenance, and many other perks to simplify your life. Apply for a lease now.