Knowing how to budget and maintain your finances while away at college is an important skillset to succeed in being on your own. Here’s how to understand your finances as college students.
by Jennifer Collins
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When you’re young, money is probably the last thing on your mind. Especially while you’re off being college students. With so many new people to meet and experiences to engage in, it can be easy to push financial management to the back of your brain.
While you certainly don’t need to balance being a fully fledged accountant while tackling your degree, it’s definitely the case that having a strong grasp over your finances will help make life easier.
This is clearly something which those of us who’ve been through the trials and tribulations of in our younger years, feel strongly about. A recent report by Forbes highlighted that as many as 63% of respondents felt financial education should be taught at schools.
Today, we’ll run over four of the most important reasons why having at least a basic understanding of money management can make a big difference for a student – both now, and in the future.
1. Early financial mistakes can have long term impacts
Nobody likes to be lectured on the repercussions of their actions. Sadly, when it comes to money, the mistakes you make in your youth can have a long term impact on your overall financial health.
Missed payments, fines, and even more extreme things like bankruptcy will all show up on your credit score for up to six years after they first occur. While that might not be an issue in the here-and-now, it could prevent you from making important purchases down the line – such as a mortgage, a car, or even a mobile phone contract. Contacting a credit management company can help you repair your credit. This way, when a big purchase that requires running your credit comes up, you’ll be ready.
2. Understand how grants and scholarships can reduce your costs
If you haven’t already, make sure to educate yourself as best as possible on the power of grants and scholarships. There are plenty available to you, all of which will cater to different needs and requirements. What’s great about these, when compared to loans, is that you won’t ever have to pay them back.
These funding opportunities can significantly lower the overall cost of education, making it more accessible for students from various economic backgrounds. Speaking to or listening to the experiences of other students from various college campuses can offer valuable insights into the benefits and opportunities that scholarships and grants provide. By sharing their personal experiences, fellow students can shed light on the application process, eligibility criteria, and the impact of these financial aids on their college journeys.
3. It means you have more money day-to-day
Creating a budget which frees up extra funds in your account means you’ll be able to live more comfortably on a day-to-day basis. Having a strong understanding of where your money is coming from, and where it’s going, makes it easier to stay on top of bills, rent, food expenses, and social spending. The natural byproduct of that should be to have more cash in your pocket at the end of every week or month.
4. You’ll be better prepared for post-college life
We get that college students have very little on their mind beyond their next assignment (or party), but having a strong backing in financial management will
make transitioning to the working world significantly easier. You’ll find a lot of the same techniques carry over into post-educational life. You’ll still need to pay bills and rent, after all.
The Takeaway
Do you have more clarity on the importance of understanding your money as a student? Make sure to do everything you can to hone your financial management skills – even if there are other things you’d rather be doing.