8 Money Management Tips for College Students
One of the skills to acquire while at college is the ability to manage money during financially tough times. Even if you are receiving enough financial aid from your parents, school, government, or workplace, you still need to practise wise spending. Besides, college life is a good time to learn to avoid making terrible personal money mistakes. So, take this moment to read this article and get the tips you need for a financially successful study experience.
Tips for Managing Your Finances as a Student
As a college student, balancing your bank account can be stressful when you have a lot to pay for, places to visit, and loads of assignments to complete. Also, the fast pace at which everything around you operates might make you scared of losing control of your finances. But don’t worry; we are here for you.
Having consulted with some financial experts and successful students, we offer the following tips to guide you in managing your money at college.
1. Work with a budget
Every college student should plan out their finances before arriving at school. You should cover everything from tuition payments to savings in your plan. Hence, you need to prepare and work with a budget. If you do not know how to prepare one, take advantage of any of these best personal budgeting apps.
2. Eat at home
According to several research findings, students who eat healthier meals tend to do better academically, have stronger memories and attention spans, and process information more quickly. Therefore, you should take your meals seriously and ensure that you are not eating junk food. But this does not mean that you should always eat out at restaurants. We are recommending that you shop for ingredients and prepare your meals at home more often.
Home cooking can be a creative, entertaining, and pocket-friendly social activity. A lot of money can be saved by using goods from your local supermarket and by cooking with leftovers, although this may require some advance preparation. Cheap doesn't have to mean tasteless; therefore, check out some simple and inexpensive recipes and get good at them.
3. Open a fee-free checking account
Many banks charge a variety of fees, which include those for account maintenance and ATM withdrawals. If your financial institution is charging you too much in fees, you should switch banks and open a fee-free checking account. Try to find one that also offers a virtual and physical debit card for secure and convenient payments. Moreover, if you use the ATM frequently, signing up for an account with a bank that does not charge ATM fees will be a smart and financially rewarding move.
4. Register for a student savings account
Teenagers and college students can start saving money with the help of a student savings account. This will introduce them to investing. Some banks that offer this kind of account allow you to earn interest on your savings, no matter how small the balance may be. The reason is that such an account usually comes with more flexible conditions. For example, you can expect your student savings account to require little or no balance and be fully functional with minimal or no monthly fees. So, when preparing to open a student savings account, ensure to choose one that offers a high-interest rate and charges no fees.
5. Make wise use of credit cards
Credit is the fundamental cornerstone of a bright financial future, yet getting it can be challenging. Banks prefer lifelong clients, but they do not want to extend credit to those who cannot or will not pay it back.
Student credit cards with softer terms and more personalised offerings can act as a stepping stone to better credit with stricter conditions in the future. They typically have lower credit limits, offer cash back between 1% and 10%, and offer other interesting rewards.
So, if you want, you can get a credit card that offers cashback, points, and other incentives. The best examples of them include those provided by Chime (Chime Credit Builder Secure Credit Card), Varo (Varo Believe Secured Credit Card), Capital One (Journey Rewards, Quicksilver Rewards, and SavorOne Rewards), and Curve (Standard Credit Card). But ensure to avoid credit card mistakes, such as failing to pay off your balance each month and incurring interest fees.
6. Avoid or limit loan borrowing
For one reason or another, you might want to obtain a student loan. Even if you intend to get it from a student-friendly neobank, such as SoFi, or any other institutional lender, it is always better to limit this kind of seemingly "free" money. The reason is that you might end up running into debt if you do it often. Besides, you might hurt your credit score in the process. Therefore, if you can, avoid borrowing. But you must limit the frequency.
7. Use student discounts
Student discounts are available at several eateries, shops, museums, parks, and organisations, particularly in college cities. So, it does not hurt to ask about the availability of a student discount while making a purchase or subscribing to a service online. Provided that you have your proof of student status, which could be your ID card or enrollment letter, it should be easy for you to get such offers.
Furthermore, you should apply for a student social card from the government or from stores in your city. It will help you spend less on groceries, transportation, entertainment, and other essential goods and services offered by the state government and student-friendly stores.
8. Consider getting a part-time job
Having a regular source of extra money is a fantastic way to manage your finances. Maintaining cash inflows is helpful since they are required to balance cash outflows and avoid running into debt. Thus, consider obtaining part-time employment that will enable you to combine work and studies. But be cautious to make sure that your visa or study permit does not legally prohibit you from engaging in formal employment.
Bonus: Best Apps for You to Save Money!
Are you considering working part-time or using one of the best ideas for passive income to get extra cash on campus? That’s definitely a commendable thing to do! But you will also need to save about 20% of it, which is recommended for good investing practice. You should ensure you do not spend all your income; rather, put some money aside for your future needs.
Now one of the smartest ways to improve your finances as a college student is to get an app that can help you save money. Such mobile apps come with savings accounts that have special features for you to automatically put aside some of your income. Thus, they free you from the stress of thinking about when and how to save.
Let’s now take a look at the best apps for saving money; they offer accounts with very high-interest rewards and no fees to college students.
Revolut is a London-based neobank and financial super app for all kinds of individuals and businesses. The Savings vaults of Revolut allow a college student to grow their money through an annual interest rate of 2.76% paid daily. In addition, withdrawals can be made from the account at any time without fear of fees. What’s more, Revolut lets you stash up cash in more than 25 different currencies, which include cryptocurrencies and commodities.
Monzo is a London-based, award-winning neobank. College students can open a savings account with Monzo and earn up to 3.0% interest annually. There is also an option to earn up to 3.55% interest in 12 months with the Monzo Fixed Pot, but you will not be able to withdraw the money until after a year from the date of account registration.
SoFi is an American neobank and financial super app. It offers checking and savings accounts for college students. Also, SoFi does not charge monthly fees. To sign up for a student account with SoFi, you need to use the email address that your school provided for you. After that, deposit at least $10 and you will receive a welcome bonus of $10—terms and conditions apply. You can also earn 3.75% APY on your savings account balance when you set up direct deposit.
Migom Bank is an international neobank and crypto-friendly bank based in the Caribbean. It offers a savings account that yields a 5.5% reward in interest. Migom Bank is regulated by the Financial Services Unit of the Ministry of Finance of the Commonwealth of Dominica. You can open a Migom Bank savings account to earn more than €5,000 in interest on your deposit in six months.
College students can manage their personal money by creating and following budgets. They can use budgeting apps such as Mint, Monese, and Revolut to automatically manage their income and expenses daily. In addition, they need to avoid making personal money mistakes and ensure that they do not abuse credit cards to the detriment of their credit scores.
Although it depends more on your location and the situation with inflation, $1,000 should be enough for a college student’s needs for more or less three months.
A college student can be said to have a realistic budget when their planned income and expenses are a true reflection of their financial situation. Theoretically, your realistic budget is a cash flow plan for a period of time, which could be a few months or an academic year.
Being accepted into college is a huge milestone, but moving away from home for the first time may be anxiety-inducing. Managing your money while studying at college may at first feel daunting, but if you establish wise spending and budgeting practises early on, it will become simpler for you. In this post, we have provided you with the most important financial suggestions for getting started on campus. Above all, try to save money whenever possible and keep track of your spending.