Dollars & Sense

Why Newly Minted College Students Should Prioritize Finances

Written by Peach State Federal Credit Union | May 21, 2024 6:45:37 PM

Congratulations! You've just embarked on an exciting journey into college life. While this chapter brings new experiences and opportunities, it's also a crucial time to establish good financial habits that’ll set you up for future success. Here's why prioritizing finances as a college student is important, along with some practical tips to help you manage your money wisely.

Why Prioritize Finances in College?

For many young adults, college is often the first taste of independence. Living ‘the college life’ means every dollar counts. It’s important to learn the ins and outs of wise money management now so you can build your footing for a sustainable financial future.

Building Financial Independence – Taking charge of your finances empowers you to make informed decisions and sets the stage for financial independence. This may mean occasionally declining that invite to go out with friends and spend money that could be put to better use elsewhere. 

Avoiding the Debt Trap - Getting swept into debt while in college can be detrimental to your financial future. Cutting back on non-essential spending such as impulse buys and prioritizing things that are important to you will help you develop budgeting skills that will stay with you beyond college life. 

Preparing for the Future - Cultivating savings habits early on will benefit you beyond your college days. Whether it's saving for a car, an apartment, or investments, starting early gives you a head start. 

Tips for College-Age Students

College life is all about getting the most out of your time and resources. But that doesn’t mean your finances have to be messy like sharing a room with five other people or as stressful as cramming the night before a big exam. Whether you’re an eager freshman or seasoned upperclassman, we have a few pointers to help you get your student finances in order.

#1. Create a Budget and Track Spending 

  • List any of your income sources (part-time job, scholarships, allowances).
  • Track your spending (tuition, rent, groceries, transportation, cellphone, streaming services, ride shares).
  • Try the 50/30/20 rule. Use 50% of your income for needs, 30% for wants, and 20% for saving.
  • Automate saving by setting up a automatic transfer with a set amount from your checking to your savings each month. This makes saving a breeze! Just keep tabs so you don’t overdraw your account.
  • Use Bill Pay to reduce environmental waste and make paying bills each month quick and easy.  

#2. Define Financial Goals

  • Short-term goals: Saving for a new laptop, a spring break trip, or building an emergency fund.
  • Medium-term goals: Planning for next semester's expenses, saving for study abroad, or starting to invest.
  • Long-term goals: Paying back student loans, or saving for a car or an apartment.

 

 

#3.  Open a Savings Account in Addition to Getting a Debit Card

#4. Use Savvy Savings and Earning Strategies

  • Take advantage of student discounts wherever possible (on food, transportation, entertainment, etc.).
  • Consider buying or renting used textbooks and selling them back at the end of the semester.
  • Use public transportation, rideshare, bike, or walk instead of owning a car (if feasible).
  • Work part-time, take advantage of work-study programs, or start a side hustle like a dorm room cleaning service or pet sitting to earn extra dough.

#5. Seek Financial Education 

  • Utilize resources on campus or at your local credit union. As a member of Peach State, you have access to FREE financial education and resources.
  • Understand basic financial concepts like budgeting, saving, investing, and managing debt. Try our ‘3 Practical Budget Templates That Actually Work’ to get you started.
  • Save for retirement. While this may sound far-fetched, it’s important to start learning, planning, and understanding how to create a comfortable future for yourself. 

#6. Plan for Student Loan Repayment

  • If you have student loans, be sure you understand the terms and if you’re able to, consider making interest payments while in school to reduce your overall debt.
  • You can prepare for repayment by finding out what options are available for you when your loans go into repayment. This will ensure you’re not going to be stuck with a monthly payment you can’t afford. 



Ready to Become a Financial Savvy College Student

Prioritizing your money and creating responsible financial habits makes navigating college life easier. Remember, the choices you make today will shape your financial well-being of tomorrow. Start building your financial toolkit now—it's an investment that pays dividends for life. And if you need some help and guidance along the way, contact us – we’re happy to help you find ways to get you started. Good luck on your financial journey and enjoy your college experience to the fullest!