- Dr. Mena Birett
Could money derail your college goals?
Updated: Jul 14, 2020
Before your money situation becomes a problem, do some work that will help you to avoid the stress that low cash will cause in your life.
This week, you should consider the following:
Creating a budget will help you to achieve your goals.
Finding a bank or credit union will help you to manage your money with services like checking accounts, savings accounts, and access to cash through ATMs. It would be ideal to select an institution that offers free checking, accounts that do not require minimum balances and pay interest.
Applying for grants and scholarships, because they do not have to be repaid.
Applying for low-cost loans. Make sure you read the fine print. There is a difference in loans from subsidized (government pays interest while you are in school) and unsubsidized (you pay the interest while you are in school). You may be approved for more money than you need. Be careful of this as you will have to repay this money after you graduate.
Most college students have to work during their time in school. You should consider working on campus, if possible. As the people that would be your supervisors understand that you schedule will be flexible. You will also have little commute time to work and no expense.
If you haven’t already started, saving and investing as much as you can will make the college experience less stressful. The goal is to have about three months of living expenses saved, in the event of an emergency.
Decrease money flowing out by:
To lower transportation expenses, you may want to consider getting along without a car for now. That will cut gas, insurance, maintenance, registration, and car payment expenses.
Choose and use credit cards wisely. My experience has been that credit card companies prey on college students. I would always recommend not getting a credit card, but if you have decided that you have the discipline to use a credit card it is good to realize that not all credit cards are created equally. Look for one with the lowest interest rate, longest grace period (time you get to use the money before paying interest), lowest annual fee (preferably free). Some cards also offer rewards for using them.
Use debit cards wisely. If you are not the type of person who records every withdraw you may find yourself overdrawing your checking account and may incur penalties.
Use ATM cards wisely. If you find this withdrawal process easy, you will want to check your balance after every transaction so that you do not find yourself in a tight position when you need the money.
Paying off high-rate debt (credit card) can be more beneficial than having money in a savings account at a low percentage rate.
Avoiding credit blunders. Every time you create a debt you have agencies assessing if you are a good or bad risk. This may affect your ability to purchase a car or house in the future.
Using tax credits can also add to your bottom line. If you are paying for college yourself, you may be able to use these credits to reduce your federal income tax.
Avoid the “let’s go out” trap. You will be asked to go out and the cost will increase, sometimes with you not even realizing it. Some friends will tell you that they will cover you until you have the money. Sounds like a great idea until you realize you are already in the hole financially for next month and this month isn’t even finished!
Tracking your spending can be a real pain, but a huge help if you aren’t sure where your money is going. It could be as simple as the amount of money you are spending for lunch, because you can’t stand the dining hall food that you have already paid for!
Examining each expense line in your financial plan for possible reductions can help you immensely. From have BYO – bring your own movie and a dinner in your room with friends instead of going out to changing banks to one with no fees to buying snacks in bulk, any step toward reducing your money going out will help you succeed in meeting your college goals.
C.A.N. is here for you to ensure that you are up to the challenges that lay ahead. If you would like to discuss the transition to college and how C.A.N. can be of assistance, please fill out the contact us page on our website.