Congratulations! You’ve finished high school and will soon be off on that wonderful adventure known as college. You may have heard that it can be four of the best years of your life and that’s true. However, there are also pitfalls that can cause you issues long after you’ve claimed that degree. Here are a few things to be aware of:
- Create a budget – This is the easiest way to start managing your money. Determine how much money you’ll have coming in each month and how much you’ll have going out. First start with your necessities such as rent, books, food, supplies. Then, be sure to include some money for fun. A budget that has no fun built in is a budget that is almost guaranteed to fail. Just be sure that you take care of the necessities first!
- Watch out for ATM fees – Sure, it’s great to be able to hit the ATM on campus as you’re walking to or from class but be careful! Some ATMs come with steep fees that are charged to everyone who uses that machine unless they’re a customer of the associated financial institution. PLUS, your home bank may add on a charge of their own for using an ATM that is not one of “theirs.” These charges can add up. If you withdraw $20 from an ATM that charges you a $3 fee and your bank adds on another fee of $2, that’s a total of $5 you’ll pay to withdraw $20, resulting in a 25% charge for that withdrawal. There are a couple of ways to avoid these charges. You can open an account at a local bank in your college town OR you can open an account at a bank in your home town that doesn’t charge you to use another bank’s ATM and will reimburse any charges that the other bank levies.
- Begin establishing good credit BUT watch out for “gotchas” – A good credit rating will make your life easier in many ways, not just during your college years but even more so once you graduate. A solid credit score may help you get a better interest rate when you buy a car or a house. It can help you have an easier time renting an apartment and finding a job. It may even help you find lower rates on your insurance. What are the “gotchas”? There are several!
- Don’t open a high interest credit card just to get the one of the free T-shirts that will likely be offered all over campus the first few weeks of a new school year.
- Don’t run up a balance that you can’t pay in full each month.
- Always pay your bill ON TIME!
- Watch out for fraud on your card. Make it a habit to regularly check your account online to catch anything that doesn’t belong to you.
- Save something, even if it’s just a small amount – Building a savings habit now will serve you well your entire life! Thanks to compound interest, starting small can have big rewards down the line. In addition, having a cushion of savings will be helpful when life’s little unexpected expenses come up. That flat tire that can’t be fixed? A small emergency account could mean you don’t have to put the new tire on your credit card and wonder where you’ll get the money to pay for it at the end of the month. A spring break trip to your favorite island? Well, it’s not an emergency but a savings account might mean that you’re IN the beach photos rather than just admiring them on Instagram.
Some of the most important things you learn in college won’t be taught in a classroom. Sometimes, the best lessons just come from life. Learning to manage your money is one of them.