It is hard enough to pay your way through college, but when you start looking toward what comes after it can be quite daunting. Making that transition from college to career means major culture shock for many students. College is its own little universe and not much of the world can touch you – but when you venture out into adult life the responsibilities can be overwhelming. You have to pay for housing, a vehicle, insurance, a work appropriate wardrobe, the list goes on and on – and you have to pay back your student loans.
When you look at your college budget it may seem that there is nowhere you can cut. There are things you can do, though, to begin preparing for the financial responsibilities that you will have after graduation.
Manage and monitor your checking account.
Banks are notorious for nickel and diming you to death with their fees for everything – funds transfers, using checks, withdrawing from ATMs, you name it. Instead, look for a bank that offers a free checking account, especially if they target college students specifically. Read all the fine print to make sure that you will have free online banking and bill pay – and that you won’t have any fees attached to management of your account.
Once you have your account, monitor it to avoid any overdrafts. Those fees can be brutal. Check your account balance regularly and do all that you can to avoid overdrafts. One overdraft can spiral into several and before you know it you have several hundred dollars in overdraft fees. Also, don’t count on your debit card being declined if you don’t have enough money in your account to cover the purchase. That is how the overdraft avalanche begins.
Use credit cards wisely.
If you choose to use a credit card, get one with an interest rate that is as low as possible. Avoid any cards with annual fees and keep your limit low, enough to cover emergencies if you get in a pinch. Use it wisely, for true emergencies and don’t go over your limit. Also, when you get your bill, pay it on time. Paying your card late will pile on the late fees.
Consolidate your student loans.
Yes, you can consolidate student loans while you are still in college. Doing so will usually give you a lower payment and a lower interest rate. Refinancing your student loans will also help you get a jump on some of the financial responsibilities that you will be facing after graduation. By getting a handle on your student loans now you will be ahead of the game and can pay your loans off faster.
Analyze your spending habits.
If you really want to get a handle on your finances you need to know where you are spending your money. For a month, document every instance that you spend money, whether you are paying a bill, buying dinner, or getting a pack of gum. Save your receipts and make notes if you need to jog your memory. At the end of the month take a look at where your money is going. You will see distinct patterns in your spending habits and this will allow you to make necessary adjustments so that you can save.
Make a budget (and stick to it).
Once you know where your money is going you need to take control of it and create a budget. Write down what you bring in each month and what you have to pay out. Figure in everything, allotting a certain amount for savings. Keep it flexible but try to stick to it as closely as you can each month. You will be amazed at how much you can save when you hold yourself accountable with a budget.