Tag Archives: Financial Advice for College Students

4 Financial Tips for College Students

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Many U.S. colleges and universities are already back in session, as we approach the Labor Day holiday. If you’re back in school or just beginning college as a freshman, you already know you have a lot more freedom – but there’s also more responsibility. The financial decisions you make now, can often determine whether you can live comfortably in your financial future. Having some guidelines at this stage in your life can help cut down on unnecessary spending, and can also help you save more for your future.

Here are some tips to consider as you are making your own financial decisions:

1. Save for an Emergency Fund – Always have extra finances set aside in case you encounter a sudden emergency. This will help you to avoid debt and can save you from a sudden financial restriction. A good rule of thumb is to save around 10% of the money you get. One easy way to do this is to have another bank account for your emergency funds. That way, your normal expenses will come from your main account and your emergency savings will be kept separate so as to not be tempted to use it.

2. Take Care of Your Credit – Being in college will likely be the first time you will encounter a credit card. Even if you manage to get a card with a high limit, you should never maximize your limit. A good rule here is to keep your credit usage at around 30%. If you end up owing too much, you could incur high-interest charges that can send you into a debt problem.

Another strategy you could follow is to only use the card if you have money to pay for the purchase right away. Save that money for when the payment is due. That way, you don’t overspend and can work toward building a good credit score. Having a high credit score can help you land better loan rates in the future.

3. Start Investing & Saving for Retirement – Starting to invest and save for your future retirement early can make a difference when it comes to your future income. You may consider working on an IRA (Individual Retirement Account), or investing in the stock market – especially once you start working. Whatever your decision, be sure that you are making your money work for you. It is also a good idea to meet with a financial advisor to help you manage any investment or retirement accounts you may have, once you do start your first full-time job.

4. Budget Your Food Expenses – Food can take up most of your budget if you’re not careful. From fast food to splurging on snacks, this can empty your wallet fast. By setting a budget for your food, you’ll think about ways to make the most out of it. You’ll begin looking for cheaper yet more filling options. Another way to approach this is to plan your groceries ahead of time. By knowing exactly what you’re going to buy, you can control the amount you spend on food. Even a bit of research online can give you access to inexpensive yet satisfying meals.

Don’t Fear Mistakes

Part of learning how to be better with money is making a few mistakes along the way. Don’t put yourself down if you made a mistake with the money you spent. Simply take note of the mistake, and try to prevent it from happening again. As long as you keep improving and developing good financial habits, you’ll be setting yourself up for your future financial success.

Article Sources:

https://www.debt.org/students/financial-tips-college-students/

https://www.meratas.com/blog/how-to-manage-money-as-a-college-student

https://www.moneyunder30.com/financial-tips-for-new-college-students

4 Crucial Money Tips for Your First Job

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Recently graduated college? Before you come face to face with the real world and your first job, be sure you review the following important money tips.

1. Keep your debt limited.

When you’re starting out in your first job, you will quickly find yourself probably making about five times what you were making from your part-time college gig. That account balance can look quite enticing. Try your best to not let debt grow. Tackling debt can take years, and you don’t want to add to it.

2. Start a savings account/emergency fund.

When you’re young, you tend to push things off because you think you’ll have plenty of time. When it comes to saving, the earlier you begin, the more you’ll appreciate it later. If you save $100 a month, during the first 5 years after college, you will have created a $6,000 fund that could come in handy when you need to make lemonade out of the lemons that life will inevitably throw at you from time to time.

3. Stick to a budget.

This may be one of the harder tips to stick with, especially when you have more money than you’ve ever had in your life. Buying every meal from your favorite restaurants is tempting, and the sooner you curb that habit the better. By budgeting, you can see how you’re really spending your money. Try not to look at it as restricting your spending, but rather a guide to help you spend confidently.

4. Don’t forget about retirement.

Retirement seems like it’s 40 years away (and maybe it is), but it’ll sneak up on you. Putting your money in an IRA early is one of the best decisions you can make. There’s a little thing called compound interest that wants to be your best friend. Read about it and you’ll be happier than a kid in a candy store.

Article Source: John Pettit for CUInsight.com

How to Survive Real World Budgeting for the First Time

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One of the most exciting times in life is entering the real word as a young adult. Finishing school, getting that first full-time job, and venturing out on your own is always an important milestone. However for many, the excitement wears off pretty quickly and you then get hit with one of the harshest realities of being an adult: managing your own finances.

Why is it so hard? Budgeting and learning how to spend your money wisely for the first time is a challenge for everyone. And you’re bound to make mistakes. To make your transition easier, here are four tips to help you survive budgeting in the real world for the first time:

1. Know Your Take Home Income

When you get your first job, you will get a salary offer. Let’s say you’ll be making $20 an hour or roughly $40,000 annually. Does that mean you’ll be taking home a little over $3,300 a month?

Wrong! When you get your first pay stub, you’ll see that many expenses are deducted from your paycheck, such as state and federal taxes, social security income, and health insurance (just to name a few). This can take up a very large percentage of your gross pay, on average 25%. It’s important to know what your true net or take home income will be so that you can properly budget.

2. Understand All Your Expenses

Living away from your parents for the first time can be a real eye opener. You start realizing how many things you actually need to pay for that you didn’t necessarily think about before. Make sure you really understand what all your expenses will be – from the big items like rent, all the way to the little things like paper towels. If you’re trying to figure out how much to spend on rent, a good rule of thumb is no more than 30% of your gross income.

Also think about your food costs, which will probably be your second biggest expense. If you’ve never had to do grocery shopping before, a good first step is to just hit the grocery store with a list of necessary items you need to buy weekly. Get a gage of how much everything costs so that you can better budget for this in the future. Remember, all the little things add up – so make your budget as detailed as possible.

3. Be Organized, Track Everything

One of the most important things about managing your finances successfully is organization. Once you have that down, you’ll have an accurate snapshot of how you’re spending and what you should cut back on. Many people forget the little things, like a daily cup of coffee, but even a small expense like that can actually add up in the long run.

Make sure you’re keeping track of everything. The easiest way to do so is by starting a spreadsheet where you input your expenses. Tools such as Mint.com are also great to use, because you can integrate it with your bank and credit card accounts to help you track your purchases.

4. Save, Save, Save

Being on your own for the first time is exciting, and you’ll want to do everything and spend on everything. But remember that it’s important to live within your means, because not doing so will get you in financial trouble down the road. Start good financial spending habits now. Have a small budget for discretionary spending, but for the most part: save, save, save.

Start an emergency fund as soon as possible—because you truly never know what can happen in life. It’s also never too early to start thinking about retirement. With the power of compound interest, the earlier you start saving for retirement, that more you’ll see later on when you need it.

Article Source: Connie Mei for Moneyning.com 

How to Get Your Child Financially Prepared for College

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college-students-awesomeAfter high school graduation, your teen will probably be spending the summer gathering dorm necessities, picking classes and hunting for the cheapest textbooks.

One major point of focus should also be signing up for the right student financial accounts, specifically checking accounts and credit cards. With so many choices, it can be confusing for parents and students, but there are simple approaches to getting college-bound kids financially prepared.

Pick the Right Checking Account

When looking for a checking account, parents may be quick to sign their children up to their own banks or to a major bank close to home. However, that approach may not be the best for the college student.

Since college students may need cash for spontaneous occasions, it is important to have an in-network ATM at or near the college campus. Constant cash withdrawals at out-of-network ATMs can amount to plenty of fees. At the 10 largest U.S. banks, the average out-of-network ATM fee is $2.45. Furthermore, the operator of the out-of-network ATM has the right to impose a surcharge, which typically ranges from $2 to $3.

Besides location convenience, parents also have to consider their ability to fund their kid’s accounts. Parents and students should research which financial institutions are around campus and near home to find the one with a student checking account that would allow them to stay financially connected. Parents, you should also make sure that the financial institution you choose has instant transfers during the times you have to transfer money into your child’s account electronically – you don’t want a 1-2 day delay period.

First Financial’s has a great Student Checking Account available for 14 to 23 year old students!*

Sign Up for the Right Credit Card

Credit cards are less attainable by college students since the Credit Card Act of 2009 took effect, requiring anyone under age 21 to provide proof of reliable income to qualify for a card. If a student can qualify for a credit card on his or her own, it is crucial to evaluate spending and repayment habits to maximize any rewards and minimize interest paid.

For instance, a student who will be driving around campus may prefer to get a credit card that offers rewards on gas purchases. Or if a student doesn’t expect to be able to pay off their balances every month, he or she may opt for a card that doesn’t have rewards but carries a lower interest rate.

The more likely situation would involve parents adding their children as authorized users on an existing credit card account. Parents can limit how much their children can spend on their authorized cards, and when the occasion calls for it, they can raise or reduce the limits accordingly. As authorized card users, students can also start building their credit profiles, which can increase their chances of qualifying for credit cards and loans in the future.

Keep an Open Line of Communication

Do your children know what to do in the case of a financial emergency? College students may encounter dilemmas that cannot be solved with the financial means available to them.

Parents should keep an open line of communication that would allow their children to contact them in the event of financial distress, regardless of how bad the situation may be. It’s important for parents to continue providing financial and emotional support, so their kids can focus on the most important aspect of college: their education.

Click here to view the article source courtesy of Simon Zhen of US News.

*A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. Accounts for children age 13 and under are excluded from this program.