For college students, the phrase โback to schoolโ can evoke excitement or significant stress. Navigating this journey into adulthood, especially with newfound financial responsibility, can be overwhelming. However, developing healthy financial habits now can set you up for future success. While we may not be able to show you around campus, we can provide you with essential tips to help you manage your finances this school year.
Budgeting & Spending
“Stick to a tight budget” โ you probably hear it all the time. But what does that really mean? Start by tracking your income, savings, and expenses in a way that works for you. Your expenses include rent, groceries, supplies, and entertainment. Begin by identifying your sources of income, categorizing needs versus wants, and monitoring your spending weekly. Use budgeting apps to simplify this process.
Keep receipts and track spending using a notebook or personal finance app. Pace your spending and increase savings by cutting unnecessary expenses like eating out or shopping. Your money should last throughout the semester, so prioritize essential expenses.
- Discounts and Perks: Take advantage of student discounts on textbooks, school supplies, technology, and even car insurance. Your student ID can unlock savings both on and off-campus.
Building & Managing Credit
Building credit may not seem urgent now, but itโs crucial for your future. If you have a student loan, each on-time payment helps build your credit. Consider getting a student credit card and using it for regular purchases like groceries or gas, but keep your credit utilization low. Always pay your monthly statement on time to establish a solid credit history.
- Using Credit Wisely: Understand the responsibilities and benefits of credit. Use it, but donโt abuse it. How you handle your credit in college could affect you well after graduation. Shop around for a card that best suits your needs and always pay your bills on time to avoid debt.
Banking & Financial Resources
Navigating your banking options as a student can be confusing, but understanding your resources can simplify financial management. The following are important considerations:
- Student Checking Account: What makes a checking account specifically for students? These accounts typically have no monthly fees, easy access, and perks like ATM fee reimbursements or no overdraft fees. They are designed to help you learn about money management without penalizing one-time mistakes. Look for features like mobile banking apps to manage your account on the go.
- Utilizing Your Bankโs Resources: Most banks offer online, mobile, and text banking tools. These resources can help you manage your account 24/7, check balances, pay bills, deposit checks, and monitor transactions. Utilize your bank’s financial education resources, such as seminars and one-on-one counseling.
- Emergency Fund: Start building an emergency fund, even if itโs just a small amount each month. Aim to save at least $500 to cover unplanned costs like car repairs or emergency travel. Having a financial cushion can provide peace of mind.
Employment & Income
Balancing work and study can be challenging, but doing so can greatly help with your finances. A part-time job is an excellent way to earn extra income and gain valuable work experience. Look for flexible jobs that prioritize academic commitments. Many colleges offer work-study programs that fit around your class schedule. Even note-taking or tutoring can be lucrative and academically beneficial options.
- Paying Off Student Loans: For many, student loans are a necessary part of funding education. Be mindful of how much you’re borrowing. According to 2023 data from Experian, the average balance among all student borrowers is $38,787.[1] Federal loans usually offer better repayment terms, so prioritize those. If possible, make interest payments while in school to reduce your debt burden post-graduation. Familiarize yourself with income-driven repayment plans to understand your options after college. After all, paying down debt is saving.
Financial Literacy & Technology
Understanding personal finance is essential for long-term success. Alongside your major, educate yourself on financial literacy. Many colleges offer classes, workshops, and online resources to help you make informed financial decisions. Don’t hesitate to ask parents, relatives, or financial advisors for advice on big financial decisions.
- Embracing Technology: Use technology to manage your finances. Online banking and mobile apps like Zelle allow you to transfer money, pay bills, and monitor your spending. Many banks offer tools to help you track your financial habits and set savings goals.
Partner with Penn Community Bank for Financial Success
Taking control of your finances as a college student can seem daunting, but Penn Community Bank is here to help every step of the way. Whether you need assistance with budgeting, building credit, or understanding your banking options, our team is dedicated to providing you with the support and resources you need to succeed. Reach out to us today to learn more about how we can assist you in making smart financial decisions and setting yourself up for a prosperous future. Let’s navigate this journey together!
[1] Experian. “Consumer Credit Review.” Accessed July 12, 2024. https://www.experian.com/blogs/ask-experian/consumer-credit-review/.
