Now that you are in college and presumably on your own for the first time, you will need to manage your money, despite how little you may have. This article provides you with some valuable tips to help you keep your finances in order. These tips will also serve as the foundation for good money management throughout your life
Start with a Simple Budget
Create a simple budget identifying how much money you have coming in and how much you plan to spend on monthly or semester bases. Your budget does not need to be super sophisticated or time-consuming, just quick and to the point. Having this simplified budget helps you to spend less time managing your money and more time focusing on your studies.
Monitor Your Spending
Now that you have your budget in place you have to monitor your spending on daily and weekly bases. It is not enough to monitor your spending on a monthly base, as you may not determine that you have exceeded your budget until after the fact. That is why it is better to track spending on daily and weekly bases as those small things can add up. For example, if your monthly Frappuccino budget is $50, then depending on the size cup you buy, your weekly allotment may be two or three cups.
Make Adjustments along the Way
Once you are well into using your budget and you have started to really monitor your spending trends, be sure to make adjustments along the way. For example, let’s assume that you discovered you can’t live with only three cups of Frappuccino a week, but you have to have a Monday through Friday. Then your budget should be adjusted. Increase your Frappuccino budget and then reduce your budget in some other area.
A word of caution here, making these adjustments assumes that you have the money, not credit, for all of your budgeted expenses. You never want to use credit as part of your budgeting strategy. The goal of the budget is to keep you from having to use a credit card for your normal living expenses.
Use Your Credit Card with a Purpose
Before you begin to use your credit card you should understand what credit is. Credit is a tool used primarily to purchase big ticket items today and allows you to pay the money back tomorrow. You don’t want to get in the habit of charging a hot dog and potato chips. Besides, who wants to pay interest on a bag of chips? Instead, use your credit to purchase big ticket items for which you will be able to payoff in less than a month or two. This allows you the benefit of having what you need now, even if you don’t have all of the cash to pay for it. This also helps you to establish your credit worthiness, something you will need when you leave college.
Look For Discounts and Ways to Curve Expenses
Do you have a roommate? Ask to split some expenses down the middle. Instead of buying new or used books from the bookstore, go directly to a student who is finishing up a class you plan to take. You can save 50% or more on the cost of the book. When going to retail stores, be sure that you take your student identification card with you as many stores offer student discounts. Always ask for discounts and wait for sales.
Remember the 24 Hour Rule
When you are considering a large unplanned purchase, always put the 24 hour rule into effect. This rule states that you wait a minimum of 24 hours after you have seen an item for the first time. Often once you have had some time to think about it, you discover that you don’t actually need what you were about to buy.
Don’t Forget to File Your Taxes
Do you have a job? Were you given money? Don’t forget to file your taxes. The last thing you want to be dealing with are IRS issues while you are in college. Besides, filing taxes can be fast and often free, when filed online.