If you’re heading off to college this fall with little experience earning or managing your own money, you aren’t alone. Now that you’re officially considered an adult, brush up on financial basics to make smart money decisions through your college years. It’s extremely important you know as much as possible about money when you are 18.
Don’t assume a pricier education is better
Is a top-name college better than a community college? Perhaps, but the heftier price tag for tuition is not always worth it. Before going into debt to go to college, think critically about what level of education you need to enjoy the career you want.
For instance, you can work in a kitchen and eventually become a chef without going to culinary school, so the added expense of culinary school may not be worth it.
Likewise, if you want to be a preschool teacher, a degree from a prestigious private school won’t be more advantageous than a degree from a state school. When you save money by attending a less expensive school, you set yourself up to be self-sustaining upon graduation.
If you’re applying for college and want help from the government paying those tuition bills, then you need to complete the FAFSA.
Understand how to live within your means
When you can figure out how to live within your means during college, you’ll set yourself up for success not only during school but after graduation.
Calculate how much money you will earn, then calculate your expenses. Spend less than you earn. While you may need to go without that spring break vacation, the financial wisdom you’ll accrue from developing strong money management skills is priceless. We’ve picked the top personal finance apps to help you with those skills from any smartphone.
If you’re struggling to balance school and work, you have options. You might take on a roommate to save on rent, move home and commute to school, apply for scholarships or grants to reduce your out-of-pocket costs, or borrow textbooks from the library rather than rent or buy books.
Know how credit cards work when you are 18
Lots of college students get their first credit cards freshman year, and many go on to abuse their credit because they aren’t sure how to use the cards responsibly. A general rule of thumb is to never charge more than you can pay back at the end of the month.
If you don’t pay off your card in full, you pay interest on the balance. To find out how much interest you’ll pay, look for the APR or annual percentage rate of your card. Divide your APR by 365 to figure out how much interest you earn per day. If you have $500 on a credit card with 17 percent APR, you earn approximately $0.24 in one day, for example.
Start saving – every little bit adds up!
Any time you have a little extra cash left over, stash it in a savings account (preferably, an online savings account that delivers high interest rates). The earlier you start saving, the more you’ll earn in interest and the faster your emergency fund will grow.
American young adults, simply aren’t doing a good job at savings. You can be one of those younger Americans that knows how to save and avoid debt. A survey by GoBankingRates in 2017 teaches us that 57 percent of Americans have less than $1000 in savings and 39% have no savings at all. If you between 18 and
According to a 2017 GoBankingRates survey, 57 percent of Americans have less than $1,000 in their savings accounts, and 39 percent have no savings at all.
Of those that responded to the survey aged 18 to 24 here are the results of the percentage who save and what amount they saved:
$0 saved: 46 %
Less than $1,000 saved: 21 %
$1,000 to $4,999 saved: 15 %
$5,000 to $9,999 saved: 5 %
$10,000 or more saved: 13 %
Know how your student loans work
If you’re taking out student loans to pay for college, understand how to loan shop plus how these types of loans work. While you are in school, you won’t be required to make payments on your loans — those kick in six months after you graduate. However, it’s a good idea to pay the interest on your student loans, if you can.
After graduation, interest is compounded and added to your total. If you keep up with interest while you are in school, you can shave thousands off what you owe. Your monthly payments after you graduate will be much more manageable as a result.
Master these tips to avoid costly money mistakes throughout your college years and graduate with the financial management skills to thrive as an adult.
Ethan founded Goalry, Inc in Dec 2016 with the mission to build the world’s first and only Financial Goal Mall. One place to reach financial goals and comparison shop for any money matter. Taub invents the IP for the finance stores within the mall, while overseeing various aspects of the company. He also has orchestrated the company’s earned media across the finance stores: Accury®, Billry®, Budgetry®, Debtry®, Cashry®, Creditry®, Loanry®, Taxry® and Wealthry®. This includes over 1200 blogs, 400 videos, thousands of social post and publications that have been featured across the web.