You are never too young to start learning to save money and invest it wisely. If more people learned these skills at an early age, there would not be the large amount of people in difficult financial situations as they grow older. Unfortunately, young people and college students are not always surrounded by adults who can effectively mentor them when it comes to financial matters. These young people are left to fend for themselves, learning as they go, and sometimes - learning the hard way.
This is the postcard we just received in the mail from CSU, Sacramento.
Yes, I snapped a picture of it!
California State University, Sacramento is one of the colleges on my daughter's list of possible schools to attend. She received her acceptance letter a few weeks ago. If she decides on this school, I will stress the importance that she and anyone else in the area should learn money management and the importance of buying insurance in Sacramento even more. Bills are going to be a fairly new thing for her, and it's important that she budgets and takes into account all of the necessities, like insurance, because it's not always something we think about right away - especially if it hasn't been an expense in the past, but now will be.
Being young and newly independent can be exciting, but young adults need to know that money matters are very important. Below are three more tips for college money management.
1. Student Loans: Remember that you have to pay them back!
Attending college is costly. Students should apply for as many scholarships as possible. People say it's "free money," but really, it is money earned by way of an application process and writing essays. However, scholarship money IS money that does not need to be paid back. Every little bit helps, and scholarships are a great way to help pay for college costs.
The Free Application for Federal Student Aid (FAFSA) due date is always March 2nd for the state of California. My daughter and I went to a Financial Aid Info Night at her school about a month ago, where we submitted the online application, and she was entered for a scholarship giveaway. (That's right, all we had to do was attend the event, and she was entered. We're still crossing our fingers!) This application counts for both state and federal funds, for grants (which do not have to be paid back) and student loans.
If planning to go to a four year institution, student loans are probably going to be needed. Students should have a goal to borrow as little as possible, because this money will have to be paid back. This is why scholarships, grants, and spending money wisely are so important.
Paying off student loans is the primary financial burden for many young people. It is critical to pay these off as quickly as possible in order to gain financial stability. If possible, pay more than the minimum payment allowed. If you only pay the minimum, you will end up paying an enormous amount in interest. Why give so much money to your lender? Make paying off your student loans your number one priority.
2. Do not use credit cards, unless in an emergency.
It is common on many college campuses for credit card companies to set up booths in an attempt to attract students to apply for their cards, many times offering incentives for signing up - a free t-shirt, or something else. This is usually as easy as taking candy from a baby. These students, on their own for the first time in their lives, can be very naive and impressionable when it comes to the world of finances. They have been supported by their parents all their lives. Therefore, they are not aware of the dangers of credit card abuse and the devastating effect it can have on the rest of your life.
One credit card is OK to use if you are caught in an emergency situation without any cash. You certainly do not need more than one! If you do buy something with a credit card, pay the entire balance immediately to avoid any interest being added to your total. If you must make monthly payments, pay the maximum amount that your budget can handle. Paying off the credit card needs to be a priority. Having good credit is important.
* The above is a collection from my favorites at my Polyvore.
3. Avoid frivolous purchases.
When you are young, it is OK to enjoy yourself every once in a while.
However, you should also be concerned about the future. It's so easy to live in the moment, but try to avoid spending money on foolish items that you might not want and are never going to use, or that you know you can't afford. Do you really need that new outfit? Probably not. Make smaller purchases over a period of time instead of splurging on a shopping spree all at once.
Budget your money wisely and focus on saving at least one-third of any money you earn. Developing this type of discipline when it comes to money will benefit you greatly in years to come. It becomes a habit, a good one, that you will be thankful for later.
Those are just a few quick tips for money matters in college.
What financial advice would you give to a college student on his/her own for the first time?
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