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8 Financial Planning Tips for College Students

Career & Money

Sat, March 30

College is a time to learn as much as you can, but students often leave without enough guidance on how to manage their financial futures. While you take classes necessary for your degree, educational institutions frequently neglect more practical aspects students will need to navigate adulthood effectively.

If you want to achieve financial independence at an early age, you’re in luck — strategies are available to help you control your finances. Here are some tips to help you become more self-sufficient.

Learn How to Budget

Budgeting helps you keep track of your money to manage your spending activity. Before creating a budget plan, look at your income, allowances and expenses. Ask yourself the following questions:

  • What are your basic living expenses?
  • How much do you have in your student checking account?
  • How much do you have in student loans?
  • Do your parents and guardians pitch in financially?

Next, create categories and assign budget amounts. A basic monthly budget includes food, transportation, rent, phone bills, and gas. Remember to set aside money for non-essential activities, such as entertainment. Carving out time for entertainment is essential to maintaining a healthy balance between school, responsibilities, and living life.

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Track Your Expenses

Ensure you’re sticking to your budget by monitoring your expenses. Use a spreadsheet or a money-tracking app to see where your money goes. For instance, you might notice you overspend on food because of take-outs and deliveries. Visualizing this might motivate you to cook your meals at home.

When you meticulously take note of each expenditure, you can gain valuable insights into your spending behavior, allowing you to make certain adjustments and increase your savings.

Start Building an Emergency Fund

Emergencies can quickly eat into your savings and might result in debt. Get ready for life’s unpredictable moments with an emergency fund, which can be used for unexpected car repairs, medical expenses, or dental emergencies.

Aside from financial stability, it helps keep your stress levels down. It’s no surprise that an emergency can threaten your mental well-being. A safety net gives you the confidence to tackle any emergency without compromising your savings and everyday expenses.

Get a high-yield savings account for your emergency fund to acquire better interest rates, helping you save more. Student accounts usually have exclusive features such as cashback potential and overdraft protection.

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Save Money Where You Can

You can reduce your spending in many ways without significantly changing your lifestyle. Consider these money-saving tips before purchasing your essentials:

  • Food storage: Not all plastics are created equal. Instead of purchasing and using generic plastic containers, invest in high-quality, food-grade alternatives that can last many years. Use Tupperware containers for snacks and storing food in the fridge. This iconic kitchen brand has been a household name for many years for its durability.
  • Toiletries: Buy cotton and toilet paper at a bargain price. Follow the 80-20 rule when buying dental-specific products, which suggests determining the 20% of items you use 80% of the time and only purchasing those items. For example, invest in must-have products like toothbrushes, floss, and mouthwash rather than splurging on luxury oral care products like teeth serums.
  • Clothing: Keep the hangers that come with newly purchased clothing and use them to hang your clothes in your wardrobe. You can also go shopping at thrift stores to score great finds without shelling out a fortune.

Take Advantage of Student Discounts

From electronics to school supplies, shopping for educational needs can be expensive. Fortunately, students can use student discounts and special offers to ease the financial burden of living and educational expenses significantly. You might enjoy special deals on food, gadgets, movies, and transportation.

For instance, Apple offers students a gift card for up to $150 and Microsoft provides up to 10% off on select products.

Learn About Investing

It’s essential to start learning about investments early to take advantage of compounding interest. Check out some worthwhile investment options:

  • 401(k): Your first employer might offer you an employer-sponsored retirement plan, like a 401(k). Whatever amount you contribute from your paycheck, your employer matches.
  • Stocks and bonds: When buying stocks, you essentially buy a piece of the company. You can purchase them through a broker or an app. Bonds refer to the money you lend to a company.
  • Cryptocurrency: This investment option provides higher returns in less time. However, students must be careful before investing because of cryptocurrency’s volatile nature.

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Build Your Credit Score

Your credit score will matter when making bigger purchases in life. Around 70% of students who receive a bachelor’s degree will acquire debt after graduation. If you have student loans, make small payments to develop a positive repayment history on record. Remember to always make your payments on time and only take out loans for necessities.

You can also open an account to save a small amount of money to pay for debt. Once you have enough funds, slowly settle your payments to build your credit score and slowly ease your way out of debt.

Plan for Retirement

Saving for your retirement early in life helps secure a brighter future. Having enough retirement funds can sustain your lifestyle and do enjoyable things after years of working.

You can explore setting up an individual retirement account (IRA), a long-term savings account allowing you to save money until you’re 59 and a half years old. You can ask your parents or guardian to guide you through the options so you feel more comfortable as you plan for your future.

It’s not too early to start saving up for your future. While you might not have much extra money now, you can make small steps to prepare yourself for a better financial situation after graduation.

Mia Barnes
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Writer since Aug, 2023 · 8 published articles

Mia is a freelance writer who is studying professional writing and communications. Mia has a passion for health and wellness and is the Founder of the online publication, Body+Mind magazine. When not writing, Mia enjoys hiking, playing with her dog, and trying new recipes.