You can navigate your college finances successfully with a few essential tips. Typically, college students aren’t that great at balancing their budgets with academia.
Fortunately for them, some student advocates are working to make college less costly. Meanwhile, however, a significant segment of students don’t have money for groceries regularly, and around half of all community college students struggle to pay rent and utilities.
How Much Do You Know About Those Student Loans?
Many students turn to loans to make ends meet. As a result, student debt accumulates to around one and a half-trillion dollars every year. Across the nation, nearly 45 million people hold current student loan debt.
College grows more expensive every year, and analysts forecast that the price of tuition will continue to rise. Also, most low-income students can’t afford to go to 90% of the colleges in America. Accordingly, members of this demographic will more than likely turn to student loans to pay for their education.
As a college student, there are a few different kinds of loans that you can use for your education. For example, you can take out a federal loan from the US government.
Federal loans offer flexible payment options, such as repayments that are based on your income. Furthermore, you don’t need a stellar credit score to secure a federal student loan.
Alternatively, you could opt for a loan from a private institution, such as a bank or credit union. Finally, you may secure a Perkins loan, which is also dispersed by the federal government based on students’ needs.
Oh, and Don’t Think Budgets Are Lame!
College students are typically tasked with figuring out how to pay for essential things, such as food, clothing, health insurance, renter’s insurance and loan payments. The first step toward covering these kinds of expenses is to create a budget.
As a rule of thumb, you should earmark about half of your income for things that you need. You can have 30% of your income for your wants.
You should also try to save the remaining 20% of your income for your nest egg and debt repayment. However you divide up your pay, you’ll have to find some way to provide for your needs as well as unforeseen emergencies.
Still Save Money Even Though You’re in College!
As you attend classes, you’ll find that textbooks are your most significant expense. At the campus bookstore, a single textbook can cost hundreds of dollars.
However, you can save money by looking for the textbooks that you need for your classes online. Some online bookstores even allow you to rent textbooks, rather than purchase them outright.
For example, BookFinder.com and Slugbooks.com are two great websites where you can find cheap textbooks. By renting instead of buying, you’ll have more money for the things that you need.
Know the Difference Between Credit Cards & Debit Cards
Nearly everyone has at least one debit or credit card. A debit card and a credit card look almost the same. However, they work very differently.
With a debit card, you can spend money that you deposited into your bank account. A credit card, however, is a sort of revolving loan that you can use to buy things or take cash advances at an ATM.
Just as you need to organize the place where you live to make it functional, you need to do the same with your finances. To begin with, you need to open a bank account.
By opening an account at a bank or credit union, you can write checks, cash checks and access cash at an ATM. You can also use your account to deposit cash in a checking or savings account.
However, don’t just sign up for an account at the nearest bank. Shop around and find out which institution offers the best deal. It helps to compare banking fees when you’re trying to figure out which financial institution can best serve your needs.
It’s important to note that banks continually change their promotions and services. If you wait too long between doing research and opening your account, circumstances may have changed, so check fees and rates twice just to be safe.
The biggest mistake made by most college students is that they don’t stick to their budget and this leads to anxiety in a lot of college students. However, you need to stick to your budget as much as possible during your college years.
A lot is riding on your ability to make ends meet. If you’re having trouble figuring out your budget, estimate your monthly bills and then how much it will cost you to cover that amount every week.
You may have to make some sacrifices. For instance, you may have to give up Starbucks and Dunkin’ Donuts for a while. With a fixed income, your options are somewhat limited. However, the sacrifices that you make now will pay off well into the future.
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